Encyclopaedia Britannica, 11th Edition, "Aram, Eugene" to "Arcueil"

Chapter III: Act 1889: have in substance been adopted by the Indian Legislature (see (1)

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Act ix. of 1899), and by many of the colonies (see, e.g., Act No. 13
of 1895, Western Australia; No. 24 of 1898, Natal; c. 20 of 1899,
Bahamas; No. 10 of 1895, Gibraltar; No. 29 of 1898, Cape of Good Hope:
s. 7 of this last statute excludes from submission to arbitration
criminal cases, so far as prosecution and punishment are concerned,
and, without the special leave of the court, matters relating to
status, matrimonial causes, and matters affecting minors or other
perons under legal disability; Trinidad and Tobago, No. 35 of 1898).

_United States._--The common law and statute law of the United States as to arbitration bear a general resemblance to the law of England.

Voluntary submissions.

All controversies of a civil nature, and any question of personal injury on which a suit for damages will lie, although it may also be indictable, may be referred to arbitration; but crimes, and perhaps actions on penal statutes by common informers may not. The submission may be effected sometimes by parol, sometimes by written instrument, sometimes by deed or deed poll. Capacity to refer depends on the general law of contractual capacity. The law of England as to the capacity to act as an arbitrator and as to objections to an arbitrator on the ground of interest has been closely followed by the American courts. The same observation applies as to the requisites of an award, the mode of its enforcement and the grounds on which it will be set aside. The arbitrator has a lien on the award for his fees; and--a point of difference from the English law--he may sue for them without an express promise to pay (cf. _Goodall_ v. _Cooley_, 1854, 29 New Hamp. 48). At common law, a submission is generally revocable at any time before award; and it is also, in the absence of stipulation to the contrary, revoked by the death of one of the parties. Provision has been made in Pennsylvania for compulsory arbitration by an act of the 16th of June 1836 (see Pepper and Lewis, _Pennsylvania Digest, tit._ "arbitration").

References by rule of court.

The rules of court also of many of the states of the United States provide for reference through the intervention of the court at any stage in the progress of a litigation. Such submissions are usually declared irrevocable by the rules providing for them.

Statutory arbitrations.

In addition to voluntary submissions and references by rules of court there are in America, as in the United Kingdom, various statutes which provide for arbitration in particular cases. Most of these statutes are founded on the 9 and 10 Will. III., c. 15, and 3 and 4 Will. IV. c. 42, s. 49, "by which it is allowed to refer a matter in dispute (not then in court) to arbitrators, and agree that the submission be made a rule of court. This agreement, being proved on the oath of one of the witnesses thereto, is enforced as if it had been made at first a rule of court" (Bouvier, _Law Dict_. s.v. "Arbitration").

Ample provision is made in America for the arbitration of labour disputes.

_Law of France._--Voluntary arbitration has always been recognized in
France. In cases of mercantile partnerships, arbitration was formerly
compulsory; but in 1856 (law of the 17th of July 1856) jurisdiction in
disputes between parties was conferred on the Tribunals of Commerce
(as to which see _Code de Commerce_, arts. 615 et seq.), and
arbitration at the present time is purely voluntary. The subject is
very fully dealt with in the _Code de Procedure Civile_ (arts.
1003-1028). The submission to arbitration (_compromis_) must, on pain
of nullity, be acted upon within three months from its date (art.
1007). The submission terminates (i.) by the death, refusal,
resignation or inability to act of one of the arbitrators; (ii.) by
the expiration of the period agreed upon, or of three months if no
time had been fixed; (iii.) by the disagreement of two arbitrators,
unless power be reserved to them to appoint an umpire (art. 1012). An
arbitrator cannot resign if he has once commenced to act, and can only
be relieved on some ground arising subsequently to the submission
(art. 1014). Each party to the arbitration is required to produce his
evidence at least fifteen days before the expiration of the period
fixed by the submission (art. 1016). If the arbitrators, differing in
opinion, cannot agree upon an umpire (_tiers arbitre_), the president
of the Tribunal of Commerce will appoint one, on the application of
either party (art. 1017). The umpire is required to give his decision
within one month of his acceptance of the appointment; before making
his award, he must confer with the previous arbitrators who disagreed
(art. 1018). Arbitrators and umpire must proceed according to the
ordinary rules of law, unless they are specially empowered by the
submission to proceed as _amiables compositeurs_ (art. 1019). The
award is rendered executory by an order of the president of the Civil
Tribunal of First Instance (art. 1020). Awards cannot be set up
against third parties (art. 1022), or attacked by way of opposition.
An appeal against an award lies to the Civil Tribunal of First
Instance, or to the court of appeal, according as the subject-matter,
in the absence of arbitration, would have been within the jurisdiction
of the justice of the peace, or of the Civil Tribunal of First
Instance (art. 1023). In the manufacturing towns of France, there are
also boards of umpires (_Conseils de Prud'hommes_) to deal with trade
disputes between masters and workmen belonging to certain specified
trades.

_Other Foreign Laws._--The provisions of French law as to arbitration
are in force in Belgium (_Code de Proc. Civ._, arts. 1003 et seq.);
and a convention (8th of July 1899) between France and Belgium
regulates, _inter alia_, the mutual enforcement of awards. The law of
France has also been reproduced in substance in the Netherlands (Code
of Civil Procedure, arts. 620 et seq.). The German Imperial Code of
Procedure did not create any system of arbitration in civil cases. But
this omission was supplied in Prussia by a law of the 29th of March
1879, which provided for the appointment, in each commune, of an
arbitrator (_Schiedsmann_) before whom conciliation proceedings in
contentious matters might be conducted. The procedure was gratuitous
and voluntary; and the functions of the arbitrator were not judicial;
he merely recorded the arrangement arrived at, or the refusal of
conciliation. This law was followed in Brunswick by a law of the 2nd
of July 1896, and in Baden by a law of the 16th of April 1886. In
Luxemburg, compulsory arbitration in matters affecting commercial
partnerships was abolished in 1879 (law of the 16th of April 1879). A
system of conciliation, similar to the Prussian, exists in Italy (laws
of the 16th of June 1892, and the 26th of December 1892) and in some
of the Swiss cantons (law of the 29th of April 1883). Spain (Code of
Civil Proc., arts. 1003-1028; Civil Code, arts. 1820-1821) and Sweden
and Norway (law of the 28th of October 1887) have followed the French
law. In Portugal, provision has been made for the creation in
important industrial centres, on the application of the administrative
corporations, of boards of conciliation (decrees of the 14th of August
1889, and the 18th of May 1893).

AUTHORITIES.--Russell, _Arbitration_ (London, 1906); _Annual Practice_
(London, yearly); Redman, _Arbitration_ (London, 1897); Crewe,
_Arbitration Act of 1889_ (London, 1898); Pollock, _On Arbitrators_
(London, 1906). As to Scots law: Bell, _On Arbitration_ (2nd ed.,
Edinburgh, 1877); Erskine, _Principles_ (20th ed., Edinburgh, 1903).
As to American law: Morse, _Law of Arbitration_ (Boston, 1872). As to
foreign law generally: the texts of the laws cited, and the _Annuaire
de legislation etrangere_. (A. W. R.)

ARBITRATION, INTERNATIONAL. International arbitration is a proceeding in which two nations refer their differences to one or more selected persons, who, after affording to each party an opportunity of being heard, pronounce judgment on the matters at issue. It is understood, unless otherwise expressed, that the judgment shall be in accordance with the law by which civilized nations have agreed to be bound, whenever such law is applicable. Some authorities, notably the eminent Swiss jurist, J.K. Bluntschli, consider that unless this tacit condition is complied with, the award may be set aside. This would, however, be highly inconvenient since international law has never been codified. A fresh arbitration might have to be entered on to decide (1) what the law was, (2) whether it applied to the matter in hand. Arbitration differs from Mediation (q.v.) in so far as it is a judicial act, whereas Mediation involves no decision, but merely advice and suggestions to those who invoke its aid.

_Arbitral Tribunals._--An international arbitrator may be the chief of a friendly power, or he may be a private individual. When he is an emperor, a king, or a president of a republic, it is not expected that he will act personally; he may appoint a delegate or delegates to act on his behalf, and avail himself of their labours and views, the ultimate decision being his only in name. In this respect international arbitration differs from civil arbitration, since a private arbitrator cannot delegate his office without express authority. The analogy between the two fails to hold good in another respect also. In civil arbitration, the decision or award may be made a rule of court, after which it becomes enforceable by writ of execution against person or property. An international award cannot be enforced directly; in other words it has no legal sanction behind it. Its obligation rests on the good faith of the parties to the reference, and on the fact that, with the help of a world-wide press, public opinion can always be brought to bear on any state that seeks to evade its moral duty. The obligation of an ordinary treaty rests on precisely the same foundations. Where there are two or any other even number of arbitrators, provision is usually made for an umpire (French _sur-arbitre_). The umpire may be chosen by the arbitrators themselves or nominated by a neutral power. In the "Alabama" arbitration five arbitrators were nominated by the president of the United States, the queen of England, the king of Italy, the president of the Swiss Confederation, and the emperor of Brazil respectively. In the Bering Sea arbitration there were seven arbitrators, two nominated by Great Britain, two by the United States, and the remaining three by the president of the French Republic, the king of Italy, and the king of Sweden and Norway respectively. In neither of these cases was there an umpire; nor was any necessary, since the decision, if not unanimous, lay with the majority. (See separate articles on BERING SEA ARBITRATION and "ALABAMA" ARBITRATION.)

Arbitral tribunals may have to deal with questions either of law or fact, or of both combined. When they have to deal with law only, that is to say, to lay down a principle or decide a question of liability, their functions are judicial or quasi-judicial, and the result is arbitration proper. Where they have to deal with facts only, e.g. the evaluation of pecuniary claims, their functions are administrative rather than judicial, and the term commission is applied to them. "Mixed commissions," so called because they are composed of representatives of the parties in difference, have been frequently resorted to for delimitation of frontiers, and for settling the indemnities to be paid to the subjects of neutral powers in respect of losses sustained by non-combatants in times of war or civil insurrection. The two earliest of these were nominated in 1794 under the treaty negotiated by Lord Grenville with Mr John Jay, commonly called the "Jay Treaty," their tasks being (1) to define the boundary between Canada and the United States which had been agreed to by the treaty signed at Paris in 1783; (2) to estimate the amount to be paid by Great Britain and the United States to each other in respect of illegal captures or condemnation of vessels during the war of the American Revolution.

Although arbitrations proper may be thus distinguished from "mixed commissions," it must not be supposed that any hard or fast theoretical line can be drawn between them. Arbitrators strictly so called may (as in the "Alabama" case) proceed to award damages after they have decided the question of liability; whilst "mixed commissions," before awarding damages, usually have to decide whether the pecuniary claims made are or are not well founded.

_Awards._--International awards, as already pointed out, differ from civil awards in having no legal sanction by which they can be enforced. On the other hand, they resemble civil awards in that they may be set aside, i.e. ignored, for sufficient reason, as, for example, if the tribunal has not acted in good faith, or has not given to each party an opportunity of being heard, or has exceeded its jurisdiction. An instance under the last head occurred in 1831, when it was referred to the king of the Netherlands as sole arbitrator to fix the north-eastern boundary of the state of Maine. The king's representatives were unable to draw the frontier line by reason of the imperfection of the maps then in existence, and he therefore directed a further survey. This direction was beyond the terms of the reference, and the award, when made, was repudiated by the United States as void for excess. The point in dispute was only finally disposed of by the Webster-Ashburton treaty of 1842.

_Subject-matter._--The history of international arbitration is dealt with in the article PEACE, where treaties of general arbitration are discussed, both those which embrace all future differences thereafter to arise between the contracting parties, and also those more limited conventions which aim at the settlement of all future differences in regard to particular subjects, e.g. commerce or navigation. The rapid growth of international arbitration in recent times may be gathered from the following figures. Between 1820 and 1840, there were eight such instances; between 1840 and 1860, there were thirty; between 1860 and 1880, forty-four; between 1880 and 1900, ninety. Of the governments which were parties in these several cases Great Britain heads the list in point of numbers, the United States of America being a good second. France, Portugal, Spain and the Netherlands are the European states next in order. The present article is concerned exclusively with arbitration in regard to such existing differences as are capable of precise statement and of prompt adjustment. These differences may be arranged in two main groups:--

(a) Those which have arisen between state and state in their sovereign
capacities;

(b) Those in which one state has made a demand upon another state,
ostensibly in its sovereign capacity, but really on behalf of some
individual, or set of individuals, whose interests it was bound to
protect.

To group (a) belong territorial differences in regard to ownership of land and rights of fishing at sea; to group (b) belong pecuniary claims in respect of acts wrongfully done to one or more subjects of one state by, or with the authority of, another state. To enumerate even a tenth part of the successful arbitrations in recent times would occupy too much space. Some prominent examples (dealt with elsewhere under their appropriate titles) are the dispute between the United States and Great Britain respecting the "Alabama" and other vessels employed by the Confederate government during the American Civil War (award in 1872); that between the same powers respecting the fur-seal fishery in Bering Sea (award in 1893); that between Great Britain and Venezuela respecting the boundary of British Guiana (award in 1899); that between Great Britain, the United States and Portugal respecting the Delagoa railway (award in 1900); that between Great Britain and the United States respecting the boundary of Alaska (award in 1903). The long-standing Newfoundland fishery dispute with France (finally settled in 1904) is dealt with under Newfoundland. Other examples are shortly noticed in the tables on p. 329, which although by no means exhaustive, sufficiently indicate the scope and trend of arbitration during the years covered. The cases decided by the permanent tribunal at the Hague established in 1900 are not included in these tables. They are separately discussed later.

_The Hague Tribunal._--The establishment of a permanent tribunal at the Hague, pursuant to the Peace convention of 1899, marks a momentous epoch in the history of international arbitration. This tribunal realized an idea put forward by Jeremy Bentham towards the close of the 18th century, advocated by James Mill in the middle of the 19th century, and worked out later by Mr Dudley Field in America, by Dr Goldschmidt in Germany, and by Sir Edmund Hornby and Mr Leone Levi in England. The credit of the realization is due, in the first place, to the tsar of Russia, who initiated the Hague Conference of 1899, and, in the second place to Lord Pauncefote (then Sir Julian Pauncefote, British ambassador at Washington), who urged before a committee of the conference the importance of organizing a permanent international court, the service of which should be called into requisition at will, and who also submitted an outline of the mode in which such a court might be formed. The result was embodied in the following articles of the Convention, signed on behalf of sixteen of the assembled powers on the 29th of July 1899.

(Art. 23). Each of the signatory powers is to designate within three
months from the ratification of the convention four persons at the
most, of recognized competence in international law, enjoying the
highest moral consideration, and willing to accept the duties of
arbitrators. Two or more powers may agree to nominate one or more
members in common, or the same person may be nominated by different
powers. Members of the court are to be appointed for six years and may
be re-nominated. (Art. 25). The signatory powers desiring to apply to
the tribunal for the settlement of a difference between them are to
notify the same to the arbitrators. The arbitrators who are to
determine this difference are, unless otherwise specially agreed, to
be chosen from the general list of members in the following
manner:--each party is to name two arbitrators, and these are to
choose a chief arbitrator or umpire (_sur-arbitre_). If the votes are
equally divided the selection of the chief arbitrator is to be
entrusted to a third power to be named by the parties. (Art. 26). The
tribunal is to sit at the Hague when practicable, unless the parties
otherwise agree. (Art. 27). "The signatory powers consider it a duty
in the event of an acute conflict threatening to break out between two
or more of them to remind these latter that the permanent court is
open to them. This action is only to be considered as an exercise of
good offices." Several of the powers nominated members of the
permanent court pursuant to Art. 25, quoted above, those nominated on
behalf of Great Britain being Lord Pauncefote, Sir Edward Malet, Sir
Edward Fry and Professor Westlake. On the death of Lord Pauncefote,
Major-General Sir John C. Ardagh was appointed in his place.

The pious fund of the Californias.

_Hague Cases._--(1) The first case decided by the Hague court was
concerned with the "Pious Fund of the Californias." A fund bearing
this name was formed in the 18th century for the purpose of converting
to the Catholic faith the native Indians of Upper and Lower
California, both of which then belonged to Mexico, and of maintaining
a Catholic priesthood there. By a decree of 1842 this fund was
transferred to the public treasury of Mexico, the Mexican government
undertaking to pay interest thereon in perpetuity in furtherance of
the design of the original donors. After the sale of Upper California
to the United States, effected by the treaty of Guadalupe Hidalgo
(1848), the Mexican government refused to pay the proportion of the
interest to which Upper California was entitled. The question of
liability was then referred to commissioners appointed by each state,
and, on their failing to agree, to Sir Edward Thornton, British
minister at Washington, who by his award, in 1875, found there was due
from Mexico to Upper California, or rather to the bishops there as
administrators of the fund, an arrear of interest amounting to nearly
$100,000, which was directed to be paid in gold. This award was
carried out, but payment of the current interest was again withheld as
from the 24th of October 1868. Claim was thereupon made on Mexico by
the United States on behalf of the bishops, but without success.
Ultimately, in May 1902, an agreement was come to between the two
governments which provided for the settlement of the dispute by the
Hague tribunal. The points to be determined were (1) whether the
matter was _res judicata_ by reason of Sir E. Thornton's award; (2)
whether, if not, the claim for the interest was just. The arbitrators
selected by the United States were Sir E. Fry and Professor F. de
Martens, and by Mexico, Professor Asser and Professor de Savornin
Lohman, both of Amsterdam. These four (none of whom, it will be
observed, was of the nationality of either party in difference) chose
for their umpire Professor Matzen, of Copenhagen, president of the
Landsthing there. In October 1902, the court decided both questions in
the affirmative, awarding the payment by Mexico of the annual sum
claimed, not in gold, but _en monnaie ayant cours legal au Mexique_.
The direction to pay in gold made by Sir E. Thornton was held to be
referable only to the mode of the execution of the award, and
therefore not to be _chose jugee_.

Great Britain, Germany and Italy versus Venezuela.

(2) The second arbitration before the Hague court was more important
than the first, not only because so many of the great powers were
concerned in it, but also because it brought about the discontinuance
of acts of war. The facts may be stated shortly thus. By three several
protocols signed at Washington in February 1903, it was agreed that
certain claims by Great Britain, Germany and Italy, on behalf of their
respective subjects against the Venezuelan government should be
referred to three mixed commissions, and that for the purpose of
securing the payment of these claims 30 percent of the customs
revenues at the ports of La Guayra and Puerto Caballo should be
remitted in monthly instalments to the representative of the Bank of
England at Caracas. Prior to the date of these protocols, an attempt
had been made by Great Britain, Germany and Italy to enforce their
claims by blockade, and a further question arose as between these
three powers on the one hand, and the United States of America,
France, Spain, Belgium, the Netherlands, Sweden and Norway, and Mexico
(all of whom had claims against Venezuela, but had abstained from
hostile action) on the other hand, as to whether the blockading powers
were entitled to preferential treatment. By three several protocols
signed in May 1903 this question was agreed to be submitted to the
Hague court, three members of which were to be named as arbitrators by
the tsar of Russia, but no arbitrator was to be a subject or citizen
of any of the signatory or creditor powers. The arbitrators named by
the tsar were M. Muraviev, minister of justice and attorney-general of
the Russian empire; Professor Lammasch, member of the Upper House of
the Austrian parliament; and M. de Martens, then member of the council
of the ministry of foreign affairs at St Petersburg. The arbitrators
by their award in February 1904 decided unanimously in favour of the
blockading powers and ordered payment of their claims out of the 30%
of the receipts at the two Venezuelan ports which had been set apart
to meet them.

Great Britain, France and Germany versus Japan.

(3) The third case before the Hague court was heard in 1904-1905. A
controversy not amenable to ordinary diplomatic methods arose between
Great Britain, France and Germany on the one hand and Japan on the
other hand as to the legality of a house-tax imposed by Japan on
certain subjects of those powers who held leases in perpetuity. The
question upon the true construction of certain treaties between the
European powers and Japan which had been made a few years previously.
By three protocols signed at Tokyo in August 1902 this question was
agreed to be submitted to arbitrators, members of the court at the
Hague, one to be chosen by each party with power to name an umpire.
The arbitrators chosen were M. Renault, professor of the law faculty
in Paris, and M. Montono, the Japanese envoy to the French capital.
They named as their umpire and president M. Gram, ex-minister of the
state of Norway. In May 1905, an award was pronounced by the majority
(M. Gram and M. Renault) in favour of the European contention, M.
Montono dissenting both from the conclusion of his colleagues and from
the reasons on which it was based.

Great Britain and the French flag at Muscat.

(4) Barely two months had elapsed since the date of the last award
when the Hague court was again called into requisition. The scene of
dispute this time was on the S.E. coast of Arabia. Muscat, the capital
of the kingdom of Oman on that coast, is ruled by a sultan, whose
independence both Great Britain and France had, in March 1862,
"reciprocally engaged to respect." Notwithstanding this, the French
republic had issued to certain native dhows, owned by subjects of the
sultan, papers authorizing them to fly the French flag, not only on
the Oman littoral but in the Red Sea. A question thereupon arose as to
the manner in which the privileges thereby purported to be conferred
affected the jurisdiction of the sultan over such dhows, the masters
of which, as was alleged, used their immunity from search for the
purpose of carrying on contraband trade in slaves, arms and
ammunition. In October 1904 the two governments agreed to refer this
question to the Hague court. Chief Justice Melville W. Fuller, of the
Supreme Court of the United States, was named as arbitrator on the
part of Great Britain, M. de Savornin Lohrnan, who had acted in the
case of the Californias (No. 1), as arbitrator on the part of France.
The choice of an umpire was entrusted to the king of Italy. He named
Professor Lammasch, who, as we have seen, had acted in the arbitration
with Venezuela in 1903.

A unanimous award was made in August 1905. It was held that although
generally speaking every sovereign may decide to whom he will accord
the right to fly his flag, yet in this case such right was limited by
the general act of the Brussels conference of July 1890 relative to
the African slave trade, an act which was ratified by France on the
2nd of June 1892; that accordingly the owners and master of dhows who
had been authorized by France to fly the French flag before the
last-named date retained this authorization so long as France chose
to renew it, but that after that date such authorization was improper
unless the guarantees could establish that they had been treated by
France as her proteges within the meaning of that term as explained in
a treaty of 1863 between France and Morocco. A further point decided
was that the owners or master of dhows duly authorized to fly the
French flag within the ruling of the first point, did not enjoy, in
consequence of that fact, any such right of extra-territoriality as
would exempt them from the sovereignty and jurisdiction of the sultan.
Such exemption would be contrary to the engagement to respect the
independence of the sultan solemnly made in 1862.

_Arbitral Procedure._--Not the least of the benefits of the Hague convention of 1899 (strengthened by that of 1907) is that it contains rules of procedure which furnish a guide for all arbitrations whether conducted before the Hague court or not. These may be summarized as follows:--The initial step is the making by the parties of a special agreement clearly defining the subject of the dispute. The next is the choice of the arbitrators and of an umpire if the number of arbitrators is even. Each party then by its agents prepares and presents its case in a narrative or argumentative form, annexing thereto all relevant documents. The cases so presented are interchanged by transmission to the opposite party. The hearing consists in the discussion of the matters contained in the several cases, and is conducted under the direction of the president who is either the umpire, or, if there is no umpire, one of the arbitrators. The members of the tribunal have the right of putting questions to the counsel and agents of the parties and to demand from them explanation of doubtful points. The arbitral judgment is read out at a public sitting of the tribunal, the counsel and agents having been duly summoned to hear it. Any application for a revision of the award must be based on the discovery of new evidence of such a nature as to exercise a decisive influence on the judgment and unknown up to the time when the hearing was closed, both to the tribunal itself and to the party asking for the revision. These general rules are universally applicable, but each case may require that special rules should be added to them. These each tribunal must make for itself.

One special and necessary rule is in regard to the language to be employed. This rule must vary according to convenience and is therefore made _ad hoc_. In case No. 1 noted above, the court allowed English or French to be spoken according to the nationality of the counsel engaged. The judgment was delivered in French only. In case No. 2 it was agreed that the written and printed memoranda should be in English but might be accompanied by a translation into the language of the power on whose behalf they were put in. The oral discussion was either in English or French as happened to be convenient. The judgment was drawn up in both languages. In case No. 3 French was the official language throughout, but the parties were allowed to make any communication to the tribunal, in French, English, German or Japanese. In case No. 4 French was again the official language, but the counsel and agents of both parties were allowed to address the tribunal in English. The protocols and the judgment were drawn up in French accompanied by an official English translation.

_Limits of International Arbitration._--Of the numerous treaties for general arbitration which have been made during the 20th century that between Great Britain and France (1903) is a type. This treaty contains reservations of all questions involving the vital interests, the independence or the honour of the contracting parties. The language of the reservation is open to more interpretations than one. What, for instance, is meant by the phrase "national independence" in this connexion? If it be taken in its strict acceptation of autonomous state sovereignty, the exception is somewhat of a truism. No self-respecting power would, of course, consent to submit to arbitration a question of life or death. This would be as if two men were to agree to draw lots as to which should commit suicide in order to avoid fighting a duel. On the other hand, if the exception be taken to exclude all questions which, when decided adversely to a state, impose a restraint on its freedom of action, then the exception would seem to exclude such a question as the true interpretation of an ambiguous treaty, a subject with which experience shows international arbitration is well fitted to deal. Again, we may ask, what is meant by the phrase "national honour"? It was thought at one time that the honour of a nation could only be vindicated by war, though all that had happened was the slighting of its flag, or of its accredited representative, during some sudden ebullition of local feeling. France once nearly broke off peaceful relations with Spain because her ambassador at London was assigned a place below the Spanish ambassador, and on another occasion she despatched troops into Italy because her ambassador at Rome had been insulted by the friends and partisans of the pope. The truth is that the extent to which national honour is involved depends on factors which have nothing to do with the immediate subject of complaint. So long as general good feeling subsists between two nations, neither will easily take offence at any discourteous act of the other. But when a deep-seated antagonism is concealed beneath an unruffled surface, the most trivial incident will bring it to the light of day. "Outraged national honour" is a highly elastic phrase. It may serve as a pretext for a serious quarrel whether the alleged "outrage" be great or small.

The prospects of the expansion of international arbitration will be more clearly perceived if we classify afresh all state differences under two heads:--(1) those which have a legal character, (2) those which have a political character. Under "legal differences" may be ranged such as are capable of being decided, when once the facts are ascertained, by settled, recognized rules, or by rules not settled nor recognized, but (as in the "Alabama" case) taken so to be for the purpose in hand. Boundary cases and cases of indemnity for losses sustained by non-combatants in time of war, of which several instances have already been mentioned, belong to this class. To the same class belong those cases in which the arbitrators have to adapt the provisions of an old treaty to new and altered circumstances, somewhat in the way in which English courts of justice apply the doctrine of "cy-pres." "Political differences" on the other hand, are such as affect states in their external relations, or in relation to their subjects or dependants who may be in revolt against them. Some of these differences may be slight, while others may be vital, or (which amounts to the same thing) may seem to the parties to be so. All differences falling under the first of these two general heads appear to be suitable for international arbitration. Differences falling under the second general head are, for the most part, unsuitable, and may only be adjusted (if at all) through the mediation of a friendly power.

The interesting problem of the future is--are we to regard this classification as fixed or as merely transitory? The answer depends on several considerations which can only be glanced at here. It may be that, just as the usages of civilized nations have slowly crystallized into international law, so there may come a time when the political principles that govern states in relation to each other will be so clearly defined and so generally accepted as to acquire something of a legal or quasi-legal character. If they do, they will pass the line which at present separates arbitrable from non-arbitrable matter. This is the juridical aspect of the problem. But there is also an economic side to it by reason of the conditions of modern warfare. Already the nations are groaning under the burdens of militarism, and are for ever diverting energies that might be employed in the furtherance of useful productive work to purposes of an opposite character. The interruption of maritime intercourse, the stagnation of industry and trade, the rise in the price of the necessaries of life, the impossibility of adequately providing for the families of those--call them reservists, "landwehr," or what you will--who are torn away from their daily toil to serve in the tented field,--these are considerations that may well make us pause before we abandon a peaceful solution and appeal to brute force. Lastly, there is the moral aspect of the problem. In order that international arbitration may do its perfect work, it is not enough to set up a standing tribunal, whether at the Hague or elsewhere, and to equip it with elaborate rules of procedure. Tribunals and rules are, after all, only machinery. If this machinery is to act smoothly we must improve our motive power, the source of which is human passion and sentiment. Although religious animosities between Christian nations have died out, although dynasties may now rise and fall without raising half Europe to arms, the springs of warlike enterprise are still to be found in commercial jealousies, in imperialistic ambitions and in the doctrine of the survival of the fittest which lends scientific support to both. These must one and all be cleared away before we can enter on that era of universal peace towards the attainment of which the tsar of Russia declared, in his famous circular of 1898, the efforts of all governments should be directed. Meanwhile it is legitimate to share the hope expressed by President Roosevelt in his message to Congress of December 1905 that some future Hague conference may succeed in making arbitration the customary method of settling international disputes in all save the few classes of cases indicated above, and that--to quote Mr Roosevelt's words--"these classes may themselves be as sharply defined and rigidly limited as the governmental and social development of the world will for the time being permit."

AUTHORITIES.--Among special treatises are: Kamarowsky, _Le Tribunal
international_ (traduit par Serge de Westman) (Paris, 1887); Rouard de
Card, _Les Destinees de l'arbitrage international, depuis la sentence
rendue par le tribunal de Geneve_ (Paris, 1892); Michel Revon,
_L'Arbitrage international_ (Paris, 1892); Ferdinand Dreyfus,
_L'Arbitrage international_ (Paris, 1894) (where the earlier
authorities are collected); A. Merignhac, _Traite de l'arbitrage
international_ (Paris, 1895); Le Chevalier Descamps, _Essai sur
l'organisation de l'arbitrage international_ (Bruxelles, 1896);
Feraud-Giraud, _Des Traites d'arbitrage international general et
permanent, Revue de droit international_ (Bruxelles. 1897);
_Pasicrisie International_, by Senator H. Lafontaine (Berne, 1902);
_Recueils d'actes et protocols de la cour permanente d'Arbitrage_,
Langenhuysen Freres, the Hague.

Of works in English there is a singular dearth. The most important is
by an American, J.B. Moore, _History of the International Arbitrations
to which the United States has been a Party_ (Washington, 1898). The
appendices to this work (which is in six volumes) contain, with much
other matter of great value, full historical notes of arbitrations
between other powers. Arbitration and mediation will be found briefly
noticed in Phillimore's _International Law_; in Sir Henry Maine's
_Lectures_, delivered in Cambridge in 1887; in W.E. Hall's
_International Law_, and more at length in an interesting paper
contributed by John Westlake to the _International Journal of Ethics_,
October 1896, which its author has reprinted privately. A London
journal, _The Herald of Peace and International Arbitration_, issued
some years ago a list of instances in which arbitration or mediation
had been successfully resorted to during the 19th century. David
Dudley Field, of New York, subsequently enlarged this list, which has
been continued under the title _International Tribunals_, by Dr W.
Evans Darby, and is published, along with the texts of several
projects for general arbitration, at the offices of the Peace Society,
47 New Broad Street, London. (M. H. C.)

ARBITRATION AND CONCILIATION. The terms "arbitration and conciliation" as employed in this article, are used to describe a group of methods of settling disputes between employers and work-people or among two or more sets of work-people, of which the common feature is the intervention of some outside party not directly affected by the dispute. If the parties agree beforehand to abide by the award of the third party, the mode of settlement is described as "arbitration." If there be no such agreement, but the offices of the mediator are used to promote an amicable arrangement between the parties themselves, the process is described as "conciliation." The third party may be one or more disinterested individuals, or a joint-board representative of the parties or of other bodies or persons.

The process here termed "arbitration" is rarely an arbitration in the strict legal sense of the term (at least in the United Kingdom), because of the defective legal personality of the associations or groups of individuals who are usually parties to labour disputes, and the consequent absence in the great majority of cases of a valid legal "submission" of the difference to arbitration. Whether or not trade unions of employers or workmen in the United Kingdom are capable of entering through their agents into contracts which are legally binding on their members it is fairly certain that the great majority of the agreements actually made by the representatives of employers and workmen to submit a dispute to the decision of a third party are of no legal force except as regards the actual signatories. Broadly speaking, therefore, the provisions of the Arbitration Act 1889, which consolidated the law relating to arbitration in general, would as a rule have no application to the settlement of collective disputes between employers and workmen, even if the act had not been expressly excluded by section 3 of the Conciliation Act of 1896 in the case of disputes to which that act applies. Besides the absence of a legal "submission," labour arbitrations differ from ordinary arbitrations in the fact that the questions referred often (though by no means always) relate to the terms on which future contracts shall be made, whereas the vast majority of ordinary arbitrations relate to questions arising out of existing contracts. The defective "personality" of the parties to labour disputes also prevents the enforcement of an award by legal penalties. Since, however, difficulties of enforcement affect not only settlements arrived at by arbitration, but all agreements between bodies of employers and work-people with regard to the terms of employment, they are most appropriately considered at a later stage of this article.

The term "conciliation" is ordinarily used to cover a large number of methods of settlement, shading off in the one direction into "arbitration" and in the other into ordinary direct negotiation between the parties. In some cases conciliation only differs from arbitration in the absence of a previous agreement to accept the award. The German "_Gewerbegerichten_," when dealing with labour disputes, communicate a decision to both parties, who must notify their acceptance or otherwise (see below). Some of the state boards in America take similar action. The conciliation boards established under the New Zealand Arbitration Act of 1894 (see below) make recommendations, though either side may decline to accept them and may appeal to the court of arbitration, which in that colony has compulsory powers. Most frequently, however, in Great Britain, the mediating party abstains from pronouncing a definite judgment of his own, but confines himself to friendly suggestions with a view of removing obstacles to an agreement between the parties. On the other hand, it is not easy to define how far the "outside party" must be independent of the parties to the dispute, in order that the method of settlement may be properly described as "conciliation." There is a sense in which a friendly conversation between an employer or his manager and a deputation of aggrieved workmen is rightly described as "conciliation," but such an interview would certainly not be covered by the term as ordinarily used at the present day. Again, when the parties are represented by agents (e.g. the officials of an employers' association and of a trade union) the actual negotiators or some of them may not personally be affected by the particular dispute, and may often exercise some of the functions of the mediator or conciliator in a manner not clearly to be distinguished from the action of an outside party. It seems best, however, to exclude such negotiations from our purview so long as those between whom they are carried on merely act as the authorized agents for the parties affected. In the same way, a meeting arranged _ad hoc_ between delegates of an employers' association and a trade union, for the purpose of arranging differences as to the terms on which the members of the association shall employ members of the union is not usually classed as "conciliation," unless the meeting is held in the presence of an independent chairman or conciliator, or in pursuance of a permanent agreement between the associations laying down the procedure for the settlement of disputes. If, however, the dispute is considered and arranged not by a casual meeting between two committees and deputations appointed _ad hoc_, but by a permanently organized "joint committee" or board with a constitution, rules of procedure and officers of its own, the process of settlement is by ordinary usage described as "conciliation," even though the board be entirely representative of the persons engaged in the industry. Such joint boards, as will be seen, play a most important part in conciliation at the present day, and they almost always have attached to them some machinery for the ultimate decision by arbitration of questions on which they fail to agree. Another form of conciliation is that in which the mediating board represents a wider group of industries than those affected by the dispute (e.g. the London and other "district" boards referred to below). Moreover, in some of the most important cases of settlement of disputes by conciliation, the mediating party has not been a permanent board but a disinterested individual, e.g. the mayor, county court judge, government official or member of parliament. As will be seen below, the Conciliation Act now provides for the appointment of "conciliators" by the Board of Trade.

Voluntary trade boards, however (i.e. permanent joint boards representing employers and work-people in particular trades), are at once the most firmly established and the most important agencies in Great Britain for the prevention and settlement of labour disputes. Among the earliest of such bodies was the board of arbitration in the Macclesfield silk trade, formed in 1849, in imitation of the French "_Conseils de Prud'hommes_," but which only lasted four years. The first board, however, which attained any degree of permanent success was that established for the hosiery and glove trade in Nottingham in 1860, through the efforts of A.J. Mundella. In 1864 a board was established in the Wolverhampton building trades, with Rupert Kettle as chairman, and in 1868 boards were formed for the pottery trade, the Leicester hosiery trade and the Nottingham lace trade. In 1869 there was formed one of the most important of the still existing boards, viz. the board of arbitration and conciliation in the manufactured iron and steel trades of the north of England, with which the names of Rupert Kettle, David Dale and others are associated. In 1872 and 1873 joint committees were formed in the Durham and Northumberland coal trades to deal with local questions. The Leicester boot and shoe trade board, the first of an elaborate system of local boards in this trade, was founded in 1875. From about 1870 onwards there was a great movement for the establishment of "sliding scales" in the coal and iron and steel trades, which by regulating wages automatically rendered unnecessary the settlement of general wages by conciliation or arbitration. These sliding scales, however, usually had attached to them joint committees for dealing with disputed questions. A sliding scale arranged by David Dale was attached to the manufactured iron trade board in 1871. A sliding scale for the Cleveland blast furnacemen came into force in 1879. Sliding scales were also adopted in the coal trade in many districts, e.g. South Wales (1875), Durham (1877) and Northumberland (1879). The movement was, however, followed by a reaction, and several of the sliding scales in the coal trade were terminated between 1887 and 1889. In 1902 the last surviving sliding scale in the coal trade, viz. in South Wales, ceased to exist and was replaced by a conciliation board.

The formation on a large scale of conciliation boards in the coal trade to fix the rate of wages dates from the great miners' dispute of 1893, one of the terms of settlement agreed to at the conference held at the foreign office under Lord Rosebery being the formation of a conciliation board covering the districts affected. Northumberland followed in 1894, Durham in 1895, Scotland in 1900 and South Wales in 1903.

In 1907 an important scheme for the formation of conciliation boards for railway companies and their employees was adopted as the result of the action taken by the president of the Board of Trade to prevent a general strike of railway servants in that year. Under this scheme separate boards (sectional and general) were to be formed for the employees of each railway company which adhered to the scheme, with provision for reference in case of a deadlock to an umpire.

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Encyclopaedia Britannica, 11th Edition, "Aram, Eugene" to "Arcueil"Chapter III: Act 1889: have in substance been adopted by the Indian Legislature (see (1)

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