The Beauty of International Arbitration

Author : Anes Alic | Monday, November 16, 2009
Comments Off on The Beauty of International Arbitration

Now that Croatia and Slovenia have signed a deal for international arbitration to resolve a long-running border dispute, assuming the deal makes it past public reluctance and opposition accusations of treason, it’s a win-win situation for local politics, Anes Alic writes for ISN Security Watch.

Neighbors Slovenia and Croatia have resorted to international arbitration to resolve their nearly two-decade-long border dispute in what is one of the greatest diplomatic achievements in the Balkans since the breakup of Yugoslavia; though the window of opportunity for obstructionism is still open.

On 4 November, Slovenian Prime Minister Borut Pahor and Croatian Prime Minister Jadranka Kosor signed the long-awaited deal in an attempt, by Croatia, to remove a key obstacle to its EU membership bid, and by Slovenia, to secure access to international waters.

The agreement, signed in Sweden, which holds the current EU presidency, means that Slovenia will no longer block Croatia’s membership bid. The deal still requires the approval of the two countries’ parliaments, hoped for by the end of the year. Croatia hopes to become the 28th EU member state by 2011 – a goal that ultimately depends on Slovenian support.

The deal was made possible after in late September the Slovenian parliament unblocked negotiations with a vote in its committee on EU affairs, while on 2 November, the Croatian parliament backed an arbitration deal with Slovenia.

Under the agreement, an international arbitration team will settle a dispute over the sea and land border dating from the disintegration of Yugoslavia in 1991, and its ruling will be legally binding for both countries.

Since gaining independence from Yugoslavia in 1991, the two countries have failed to complete the drawing of their land and sea borders.

Particularly at stake is jurisdiction over the Piran Bay, over which both countries claim ownership. The small bay does not represent much economically or geopolitically for Croatia. But for Slovenia, the border dispute is of a financial nature since the settlement will mean gaining or losing direct access to international waters and will have consequences for the country’s shipping industry.

Slovenian uncertainty

Some opposition parties and hardliners from both countries have labeled the action a betrayal of national interests and are calling for a referendum on the issue.

Furthermore, the Slovenian ruling coalition has joined appeals coming from the opposition to hold a referendum on the new arbitration agreement with Croatia to settle the bilateral border dispute.

The four Slovenian ruling parties said they would ratify the agreement only if it won majority support in a referendum, which is expected in early 2010. The move could once again complicate Croatia’s bid to join the EU.

It is expected that the Slovenian parliament will call for a referendum in the second half of December, before its ratification would reach the parliamentary agenda. If the Slovenian public votes against the arbitration deal in a referendum, the ruling parties said they would not push the issue. Slovenian opponents of the deal claim that arbitration is too risky as international arbitrators could end up dismissing Slovenia’s claim altogether.

A new survey published in the Slovenian daily Delo suggests that 48.5 percent of Slovenians support the agreement, 37 percent oppose it and 14.6 percent are undecided. However, in some earlier polls, a majority opposed the border accord.

Since Slovenia joined the EU in 2004 it has exercised its right to veto Croatia from joining the bloc. Slovenia thwarted Croatia’s EU talks last December due to the border dispute, preventing nine negotiating chapters between Croatia and EU from being opened and five from being closed.

Croatia: Treason or treaty?

In Croatia, opposition parties, particularly of the nationalist variety, accuse the government of failing to debate the deal publicly or to disclose the details. These forces claim that the agreement in essence relinquishes part of Croatian territory to Slovenia, labeling the deal as national treason.

Croatia’s biggest opposition party, the Social Democrats (SDP), said the agreement was fraught with risks because it involved political instead of purely legal elements, stressing that Croatia would have to pay for its EU entry with territorial concessions.

However, party spokeswoman Gordana Grbic told ISN Security Watch that after initially abstaining from voting in the parliament, the SDP has not decided to support the arbitration process for the sake of the country’s EU bid, as long as the Croatian public is satisfied with the tribunal members.

“If the public is to be denied the right to know who will be deciding on this dispute, we don’t want to talk about this […] we have to know if the [international] arbitrators are people with international judicial experience or [simply] some clerks,” she said.

Grbic said that the SDP still blamed the government for holding months of secret negotiations with Slovenia without informing the public or the opposition and then coming out with a take-it-or-leave-it deal.

International arbitration or bust

According to the agreement, the tribunal will be comprised of five members, two appointed by each country and three others who will be chosen by both sides together from a list of experts presented by the European Commission. In the case of a disagreement, the president of the International Court of Justice (ICJ) will name these three.

The two countries will have a year to present their arguments to the tribunal, which also could prolong Croatia’s EU talks.

Indeed, international intervention has been necessary to resolve disputes in the Balkans since the early 1990s.

It is impossible to predict the outcome at this point, but regardless, there will be opposition on both sides, accusing their respective of governments of treason and betrayal of national interests. The governments can take credit for any positive results of the arbitration and blame the tribunal for anything lost or conceded, thus losing no political points.

Had this political strategy been used across the Balkans in the course of the past 15 years, surely more of the region nations, especially those of the former Yugoslavia, would have by now been welcomed into the EU.

Immediately following the Kosor-Pahor agreement, the Macedonian government indicated to the EU that it would be best placed to resolve the dispute over its name with neigbhoring Greece, hinting at the Croatia-Slovenia model.

The Macedonian government told EU officials that due to the failure to resolve the 18-year dispute with its neighbor, international arbitration would at this point be the best, and perhaps only, solution. Greece has not yet responded to this suggestion.


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