Balancing Private Equity Rights and Public Order in Investor-State Arbitration: The PCA Experience – Vol. 30 No. 1

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Author: Brooks W. Daly*

Published: December, 2019

Investment Disputes


The Permanent Court of Arbitration (“PCA”) is the world’s oldest arbitral institution. It is an intergovernmental organization founded at the First Hague Peace Conference held in 1899 at the initiative of Czar Nicholas II of Russia.

States participating in the Peace Conference sought to reduce the risk of war in an increasingly militarized world. The lasting result of their work is the 1899 Convention for the Pacific Settlement of International Disputes, which establishes the PCA as a means to facilitate the submission of disputes between states to arbitration and other peaceful means of dispute settlement. The PCA was equipped with a standard arbitration procedure, an optional roster of arbitrators, and a permanent secretariat, available at all times to support the work of any arbitral tribunal that might be formed for a particular dispute.

Throughout its history, the PCA has served to meet the evolving needs of international dispute resolution, including modern-day investor-state arbitration. In the 1930s, the PCA administered for the first time an arbitration opposing a private entity and a state—Radio Corporation of America v. China, which set a precedent for the PCA’s involvement in such “mixed arbitrations.” Further, the procedures codified in 1899 influenced the work of the UN Commission on International Trade Law (“UNCITRAL”) in composing the 1976 UNCITRAL Arbitration Rules, which have come to govern the procedure in a significant proportion of investor-state disputes today.

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*Deputy Secretary-General and Principal Legal Counsel of the Permanent Court of Arbitration. This paper was prepared by Brooks W. Daly with the assistance of the staff of the PCA International Bureau, including Ms. Evgeniya Rubinina, Mr. Michael Modesto Gale, and Ms. Juana Martinez Quintero. Opinions expressed in this chapter are the personal view of the author.