Vanuatu Joins the Permanent Court of Arbitration

By Jennfier La'au and Isabelle Jurukovski

In a move towards strengthening its commitment to international law and facilitating justice and the friendly settlement of international disputes, Vanuatu has recently acceded to the 1907 Hague Convention for the Pacific Settlement of International Disputes (Convention). It will therefore become the 123rd contracting party of the Permanent Court of Arbitration (PCA) on 11 August 2024, joining other Pacific nations Fiji, Australia and New Zealand.

The Convention sets out the methods and procedures for international arbitration and the maintenance of general peace.

What is the PCA?

The PCA is an intergovernmental organisation established under the Convention. The PCA is dedicated to resolving international disputes and assists with arbitration, conciliation, fact-finding and other dispute resolution proceedings between states, state entities, intergovernmental organisations and private parties.

Benefits to Vanuatu

Becoming a contracting party will provide Vanuatu with access to a respected, efficient and reliable forum for arbitration. The PCA handles a variety of disputes, including those related to commercial, contractual, investment, environmental and human rights issues. This broad jurisdiction makes it a versatile tool for resolving complex international disputes. The PCA also has a pool of highly qualified arbitrators and experts in various fields of international law that Vanuatu will be able to call on for specialised knowledge and experience.

The PCA offers administrative and logistic support to arbitrations through case management. It deploys its own legal counsel to supervise cases, can appoint an authority or designate another appointing authority and also offers hearing rooms free of cost for matters administered by it.[1] The PCA has shown to be highly flexible in its approach to resolving disputes. There are examples of it administering proceedings other than arbitration such as conciliations, expert determinations and fact-finding commissions. This gives Vanuatu as a contracting party the ability to tailor dispute resolution procedures to suit their specific needs, preferences and timelines.

The PCA has a Financial Assistance Fund which helps developing countries meet some of the costs involved in international arbitration or other dispute procedures offered by the PCA. The use of the Fund is open to all contracting parties if they are listed on the “DAC List of Aid Recipients”,[2] and have also concluded an agreement to submit a dispute for settlement to be administered by the PCA. This is particularly beneficial for smaller states such as Vanuatu, with limited resources.

One of the more valuable benefits to becoming a contracting party, is that it will demonstrate Vanuatu’s commitment to upholding international law and fostering a stable environment for international cooperation and the peaceful resolution of any disputes. Historically offshore finance centres (aka “tax havens” back in the day) were reluctant to accede to conventions of this type (just as most remain decisively reluctant to pass judgment reciprocity legislation), but this most recent step from Vanuatu is an indication of its willingness and eagerness to participate in international commerce and trade beyond the shadow previously cast over it when identified as an offshore finance centre. This also demonstrates that for jurisdictions like Vanuatu it is possible to play on both fields.