The Foreign Service Journal, May 1923 (American Consular Bulletin)

AMERICAN 7*715 IwaJL js 1 Photo. Boissonnas Seat of the Permanent International Secretariat of the League of Nations, Geneva, Switzerland $1.00 A YEAR 35 CENTS A COPY 111111111111 11111111111 111 1111 1 1 11 n in n i n 1 n u u n 11 ii 1111 ii 1 n i n 11111 ii 1 1 1 1 1 1 1 1 1 n 1 1 $1,200,000.00 $14,000,000.00 1 1 1 1 1 CAPITAL 1 RESOURCES 1 n j 1 1 M 11 1 1 1 1 1 1 1 1 1 1 1 A World-Wide Bank 1 1 1 1 n f 11 n 11111 Account n n 111111 The Federal-American at Washington can m serve you anywhere in the world—in bank¬ 11 n [ ing matters. Banking by mail is made 1111111111 convenient for those who travel and are iiiiiiiiiiiiimimiininiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiimmiiiillllllllllllllilllllliilil^ away from home. Our monthly statement system keeps you promptly and accurately informed every month. EVERYTHING FINANCIAL Foreign Exchange Letters of Credit Travelers Cheques Checking Account Savings Account Investments Loans Federal-American National Bank WASHINGTON, D. C. W. T. GALLIHER, Chairman of the Board JOHN POOLE, President rmiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiHiiiiiiiiiiiiiiiiiiiiiiiMiiiiiiiiiiiiiiiiiiiiiiiiiiMiimmiiiiiiiiiniiiMiiiiiiiiiiiiiiiiim / LLETIN PUBLISHED MONTHLY BY THE AMERICAN CONSULAR ASSOCIATION VOL. V, No. 5 WASHINGTON, D. C. MAY, 1923 Ironing Out Difficulties Basel Miles, Formerly of Our Diplomatic Service, Now American Administrative Commissioner With International Chamber of Commerce, Tells of the Activities of That Organization, Especially in the Pro¬ motion of Arbitration and Conciliation THERE has always been more than one way ington safeguarded the terms of what was no of settling a dispute. Enemies did so by doubt the biggest business move he ever made, battle. Even when law courts intervened, namely, the disposal of his large estate and great there soon grew up a practice of settling disputes wealth. “out of court.” But even so, the delays of the BEGINNINGS IN ENGLAND law have proved long and the expense of the Arbitration of commercial disputes has been game often not worth the candle. growing in a friendly atmosphere for at least This has proved to be especially true in com¬ forty or fifty years, particularly in England, mercial disputes and disagreements about con¬ France and America. The extent of British for¬ tracts. Consequently, the idea of arbitration, as eign trade led to a perfectly normal development an alternative, took root in a natural and friendly of the system of commercial arbitration in that soil. That this should be the case in America country. British merchants provided in contracts as much as elsewhere was naturally to be ex¬ that any disputes which they might have with for¬ pected. George Washington’s will has recently eign merchants might be referred to British arbi¬ been quoted on more than one occasion to illus¬ tration tribunals, such as that established by the trate the early appeal which arbitration made to Manchester Chamber of Commerce. Here was Americans. Washington died a rich man, and probably the first expression of the idea of inter¬ bequeathed a large landed property to his heirs. national commercial arbitration. Lacking children of his own, he was probably It was consequently a further natural develop¬ anxious that there should be no legal entangle¬ ment that the question of international commercial ments in regard to his bequests. His will was arbitration should be one of the earliest questions accordingly distinguished by an arbitration clause to attract the attention and activities of the Inter¬ stipulating that in case of dispute between any national Chamber of Commerce. The establish¬ two of his heirs, they were to choose two men ment of this relatively new organization is one of “known for probity and good understanding,” the results of the war which it is safe to say can and these two were to select an “umpire,” “which be set down upon the credit side of the balance three men thus chosen shall declare their sense sheet. of the testator’s intention; and such decision is, The International Chamber of Commerce to all intents and purposes, to be as binding on turned its attention almost at once to the crea¬ the parties as if it had been given in the Supreme tion of an international tribunal for the arbitra¬ Court of the United States.” In this way Wash¬ tion of commercial disputes. In 1922, the corn- 1131] AMERICAN CONSULAR,j^ULLETIN mittee charged with preparing the plan presented national Chamber are located. Today this is a completed project, embodying a code of rules Paris. The Executive Committee examines the covering not only arbitration but also conciliation. decision and two of its members sign it. It is The project was approved by the Council—the then countersigned by the Secretary of the Court governing body of the International Chamber of and communicated to the parties in the dispute. Commerce—in July, 1922, and has been in effect since that time. The Court itself was publicly How DECISIONS ARE ENFORCED constituted at a formal ceremony January 19, The means of enforcing arbitration decisions 1923, which was held in the hall of the Tribunal vary in different countries and are not yet uni¬ de Commerce de la Seine, at Paris. form. In some countries an arbitration decision can be so arranged as to have the effect of law. THE PROCEDURE IS EXTREMELY SIMPLE Where this is not the case, pressure can be If a merchant or manufacturer in, let us say, brought to bear through the National Committee Poland has a commercial dispute or an unsettled of the recalcitrant party and through his own contract with a client in France, he brings it to local chamber of commerce or commercial orga¬ the attention of the International Chamber of nization. In any case, the moral pressure avail¬ Commerce through his own National Committee. able is very great indeed. By gradual develop¬ As the Court has been thrown open to business ment it is expected that the law will uphold prop¬ men of all the world by a recent decision, the erly conducted arbitration decisions in all coun¬ merchant or manufacturer can bring the matter tries. to the attention of the International Chamber of Not the least important feature of the rules Commerce through his local chamber of com¬ governing the Arbitration Court is the world¬ merce or local organization if his country has wide encouragement which they have already no National Committee. The point is merely that given to the general insertion of an arbitration he must be able to bring the matter to attention clause in international contracts. For example, through some recognized commercial or business when an American and an Italian enter into a body. contract, the International Chamber of Commerce This having been done, the Secretary of the urges both parties to put in a provisory clause to Court, who for the present is also the Secretary the effect that, in the event of dispute, they agree General of the International Chamber, communi¬ to refer the case to the Court of Arbitration. The cates with the National Committee of the other practical advantages of the adoption of such a party to the dispute, or where no National Com¬ clause are obvious, but perhaps even greater in mittee exists, then to the best available local importance are the moral effects. Where two chamber of commerce, asking them to take it up parties have agreed in advance to arbitrate, it is with the merchant in question and ascertain the general experience that they are much less whether he is willing to arbitrate the case. The hasty in precipitating a dispute than would be the willingness of the second party being obtained, case if their contract had no such clause. It is the parties have the choice of two or three methods obvious that where a business man has agreed in of securing arbitrators. There can be three arbi¬ advance to arbitrate he will be very chary of trators, or two arbitrators and an umpire, or a forcing the issue unless he has a sound case. It single arbitrator. The choice lies with the parties is almost certain that he will not fly off at a to the dispute. The arbitrators, when selected tangent over some trifle, if he is certain he has and confirmed by the Court, meet at a place con¬ the resources of an impartial and quick-acting venient to the two parties and hear the dispute. Court of Arbitration to which ultimately he can Under the rules of the Court, they are obliged have recourse. to render a decision within sixty days. The ex¬ penses involved are limited strictly to those of PRACTICAL SUCCESS WITH CONCILIATION the actual cost, including travel, and the occasional Another interesting feature parallel with the very moderate fees to which arbitrators are en¬ Court of Arbitration of the International Cham¬ titled by the practice of certain countries. ber of Commerce is the facilities afforded for The decision of the arbitrators is referred to conciliation. Without reference to the Arbitra¬ the Arbitration Court, which in routine and ad¬ tion Court, the International Chamber of Com¬ ministrative matters acts through an Executive merce has a board, composed of the Secretary Committee composed of one individual from each General of the International Chamber and the country associated with the Chamber, and who, Administrative Commissioners of the member at the same time, is required to be a resident of countries, who are at all times prepared to extend the city in which the headquarters of the Inter¬ their good offices towards conciliation. Recently [132] two merchants of different countries made an tional Committees form a natural and easy chan¬ appeal for conciliation.

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