Welcome to this third video on the Principles of International Arbitration. The main principles of international arbitration are so important that we will spend two videos on this. In this video, you will learn what the main features of international arbitration are. We will also distinguish international arbitration from other forms of dispute settlement, in particular, judicial settlement. Judicial settlement is settlement through recourse to international courts and tribunals. What are the main principles of international arbitration, and how does international arbitration differ from international courts and tribunals? These are the two main questions that we'll be addressing together in this video. Arbitration, together with judicial settlement, are the two main methods in international law to settle disputes in a binding manner. Both are what we call legal dispute settlement mechanisms. They contrast with diplomatic dispute settlement methods such as mediation or conciliation, and that these methods do not result in a decision binding on the parties. The first and main principle of international arbitration, thus is that the outcome of the arbitration, the arbitral award, is binding on the parties. The binding character flows from the fact that the parties to the dispute by choosing arbitration to settle their disputes accept in advance that they will be bound by the outcome. You will find provisions of the binding character of an arbitral awards, for instance, in Article 34 paragraph two of the UNCITRAL arbitration rules, I'll come back to these rules in a couple of minutes. The second and probably the most fundamental principle of international arbitration is that arbitration is designed by the parties to the dispute themselves. This is called the principle of party autonomy. This implies that it is the parties to the dispute who choose the arbitrators, the procedural law, that is the law that applies to how the procedure will be conducted, and finally, also the law applicable to the settlement of the dispute the so-called applicable law. This principle also implies that the parties themselves define the issue or subject matter to be decided by the arbitral tribunal. In other words, the tribunal has the authority or competence to decide only those issues that the parties have submitted to decision by the tribunal. The fundamental principle that the parties choose their arbitrators is the main feature distinguishing arbitration from settlement by international courts and tribunals. In the latter case, the court or tribunal is composed of judges that are appointed or elected for a fixed term and not by the parties. Also, the procedure is entirely pre-determined and the statutes of the courts and tribunals. The parties cannot, in principle, change these rules. I will now spend more time on some of these elements. As far as the composition and structure of arbitral tribunals is concerned, parties can choose freely how many arbitrators will compose the tribunal. Typically, tribunals are composed of three or five arbitrators. Sometimes, the dispute is referred to a sole arbitrator, or tribunal composed of seven arbitrators. For interstate arbitration, the recent practice is to appoint a five-member tribunal, and for investor state arbitrations, the practice is a three-member tribunal. Usually, the parties themselves each appoint an equal number of arbitrators. That is, each one or two arbitrators in the case of a three or five-member tribunal. The remaining arbitrator who will act as president of the tribunal is appointed jointly by the party appointed arbitrators or the parties. In case of disagreement, an appointing authority usually is identified who will appoint the arbitrator if the parties disagree, or if one of the parties fails to appoint its own arbitrator. The appointing authority usually is the Secretary-General of the Permanent Court of Arbitration, or the president of the International Court of Justice, but it can, in fact, be anyone. It is important to point out in this respect that all arbitrators, including those appointed by the parties, need to be fully independent and impartial. This stands in stark contrast to the historical examples mentioned in the previous videos, such as the Jay Treaty Arbitration, where the appointed arbitrators often saw their roles as an extension of diplomacy. Independent and impartiality implies that the arbitrators should not have any ties, family, financial, or otherwise, to the parties, and that they have not prejudged the case. In case of doubt as to the independence and/or impartiality of an appointed arbitrator, procedures exist to challenge these arbitrators. The Procedural Law, as said, is freely chosen by the parties. Here, I need to reiterate the fundamental element I explained in the first video, that is, the distinction between ad hoc arbitration and institutional arbitration. In institutional arbitration, the institution to which the dispute is submitted will function with its own rules of procedure. This means that this choice implies the use of the specific procedural rules of that institution. There are, however, exceptions to this principle. A notable example is the Permanent Court of Arbitration, which allows the parties to use other procedural rules than those of the PCA itself. For ad hoc arbitration, the choice of the parties as to which rules they will use is entirely open. Parties are free to draft their own rules, which is the case, for example, for arbitration under the law of the Sea Convention, which has specific procedural rules in its Annex seven. Alternatively, the parties can use existing sets or models of procedural rules. The most important set of rules are the arbitration rules of the United Nations Commission on International Trade Law, UNCITRAL. These rules can be used for interstate arbitration, investor state arbitration, and international commercial arbitration. The rules contain provisions on, for example, the Constitution of tribunals, the conduct of the procedure, the powers of tribunals in relation to evidence gathering, and the effect and form of the awards. I invite you to have a close look at the UNCITRAL arbitration rules which you can find on the course page. In this video, you have learned a first set of fundamental Principles of International Arbitration. You have also learned how arbitration is different from settlement by judicial means, international courts and tribunals. In the next video, we will continue the overview of the fundamental principles, and notably, how arbitration can be agreed upon.