Who Settles Disputes Between Political Communities?

Arbitration, Shared Rules, and the Limits of Political Autonomy

Imagine that two neighboring political communities have agreed to separate peacefully.

They have negotiated their boundary, public assets, and the continuation of essential services.

But a disagreement remains.

One community believes that a shared pension obligation has been calculated incorrectly. The other refuses to pay more.

Both have elected governments. Both insist that their interpretation of the agreement is correct.

Who decides?

In the previous essays, I examined how established rights, public security, and financial obligations might survive political change.

Agreements help protect those rights and obligations. But governments can disagree about what an agreement means, whether it has been violated, or whether it remains valid.

Political autonomy cannot mean that each community is always the final judge of its own obligations to others.

The opposite solution is also troubling. If a common institution can decide every question and override every community, limited cooperation may become general political supremacy.

How can political communities settle disputes without losing their freedom to govern themselves?

Croatia and Slovenia — An Agreement to Arbitrate

Croatia and Slovenia became independent from Yugoslavia in 1991.

Their common boundary remained disputed in several areas, including maritime areas in the northern Adriatic.

Years of negotiations had not resolved the disagreement.

On November 4, 2009, the two governments signed an arbitration agreement following efforts involving the European Commission.

Rather than allowing either government to determine the boundary alone, they agreed to refer specific questions to an arbitral tribunal—a group of arbitrators appointed to decide a dispute under agreed rules.

Under Article 3 of the agreement, the tribunal would determine the land and maritime boundary, Slovenia’s connection to the high seas, and arrangements for the use of relevant maritime areas.

Its authority was defined. The agreement did not give the arbitrators general power over the two countries.

The parties also agreed that the award—the tribunal’s formal decision—would be binding, and that they would take the necessary steps to implement it within six months.

Here was the attraction of arbitration.

Two independent states could accept a legal procedure without creating a government above them with unlimited political authority.

The Permanent Court of Arbitration provided administrative support. The particular dispute was decided by the appointed tribunal, not by a standing government with authority over the two states.

But a written agreement was not enough.

The parties also needed to trust the process.

When the Arbitrators’ Independence Was Questioned

In 2015, unofficial communications came to light between an arbitrator originally appointed by Slovenia and a member of Slovenia’s team in the proceedings.

The communications concerned the arbitration and matters connected with the tribunal’s deliberations.

The problem was straightforward.

An arbitrator must not secretly discuss the tribunal’s deliberations with one of the parties. Doing so calls into question whether both sides are being treated fairly.

Croatia concluded that the proceedings had been compromised. In July 2015, it announced that it was terminating the arbitration agreement.

Slovenia rejected that position.

The tribunal now faced a question about its own authority.

Could the proceedings continue after misconduct that had called their fairness into doubt?

The individuals involved left their positions, and the tribunal was reconstituted.

On June 30, 2016, it issued a partial award. This was a decision about the procedural dispute, not the final determination of the boundary.

The tribunal concluded that Slovenia had violated provisions of the arbitration agreement.

But it also concluded that those violations did not give Croatia the right to terminate the agreement. In the tribunal’s assessment, the corrective measures allowed the reconstituted tribunal to reach a final decision independently and impartially.

Croatia maintained that it was no longer bound by the proceedings.

The dispute had changed.

It was no longer only about the boundary. It was also about whether the institution established to resolve that dispute could still exercise legitimate authority.

An arbitral tribunal needs more than authority written in an agreement. It must preserve the integrity of the process through which it exercises that authority.

The breach was real. The parties disagreed about whether its consequences had been adequately remedied.

A Binding Award That One Party Rejected

On June 29, 2017, the tribunal issued its final award.

It determined the land and maritime boundary and addressed Slovenia’s connection to the high seas and the use of relevant maritime areas.

Slovenia regarded the award as final and binding.

Croatia rejected it, maintaining that the arbitration agreement had been validly terminated.

A legal decision had been delivered. The disagreement over its authority remained.

This reveals a second difficulty.

An agreement may declare an award binding. A tribunal may issue that award.

Neither guarantees that the parties will implement it.

Governments may need to change legislation, instruct public agencies, and cooperate over boundaries and services.

But what happens when one government refuses because it disputes the authority of the tribunal itself?

Enforcement has its own limits.

A boundary dispute does not justify unlimited control over another community’s government.

The challenge is to make a specific legal obligation effective without turning the power to enforce it into general political supremacy.

The EU Court Could Not Decide Everything

Croatia and Slovenia are members of the European Union.

The EU has common legal rules and a Court of Justice. Could that Court settle their disagreement?

In 2018, Slovenia brought proceedings against Croatia, arguing that Croatia’s conduct also breached EU law.

On January 31, 2020, the Court of Justice held that it lacked jurisdiction to hear the action under Article 259 of the Treaty on the Functioning of the European Union.

Jurisdiction means the legal authority of a court to decide a particular kind of case.

The Court found that the underlying boundary disagreement concerned an international arbitration agreement and award that did not form part of EU law in the way required for that action.

It could not determine the boundary through those proceedings.

That did not mean Croatia had won the argument over whether the arbitration agreement had been validly terminated.

Nor did the judgment free the two countries from the need to seek a settlement.

The Court emphasized their duty of sincere cooperation and the need for a definitive legal solution consistent with international law. It also mentioned the possibility of an agreed referral under another treaty provision, Article 273.

A common court can have authority over some matters without having authority over every disagreement among the communities it serves.

The distinction matters for the World Citizen Society. The division of political power presents similar questions.

A common institution must possess enough authority to carry out the functions assigned to it. But its jurisdiction should not expand automatically whenever political communities disagree.

The Fishermen Who Could Not Settle the Border

For the two governments, the dispute concerned territory, legal authority, and the status of an arbitral award.

For fishermen, it could determine whether their ordinary work exposed them to penalties.

Croatia and Slovenia continued to apply different understandings of the boundary in contested waters.

Some Slovenian fishermen were penalized under Croatian law for activities in those waters.

In Chelleri and Others v. Croatia, the European Court of Human Rights examined complaints arising from such penalties.

In a decision adopted on April 16, 2024, and notified on May 16, the Court declared the applications inadmissible.

It considered, among other things, that the applicants could reasonably have foreseen that their activities would constitute offenses under the applicable Croatian legislation.

The Court also explained that it was not responsible for deciding the validity or legal effects of the 2017 arbitration award.

Its decision did not settle the boundary dispute.

For the fishermen, however, the consequences were already real.

They were affected by a dispute they could not resolve themselves.

Residents should not become bargaining instruments in disagreements between governments.

Nor should a government use an unresolved dispute as an unlimited excuse for disregarding established individual rights.

An intergovernmental agreement may determine which state exercises authority. It does not automatically decide every claim belonging to the people affected.

Government Obligations and Individual Rights

Consider another example.

Two communities disagree about which government must reimburse the other for pension payments.

An arbitration may determine their respective financial obligations.

But a pensioner has a different concern: whether the benefit already due under the applicable law will actually be paid.

Must that person wait until the governments finish arguing?

Not necessarily. The individual claim and the governments’ obligations are connected, but they are not identical.

In The World Citizen Society, I distinguish two paths for enforcing rights and obligations.

One concerns individuals who need decisions, corrections to records, or remedies when their rights are denied.

The other concerns political communities that fail to honor shared commitments.

The book calls this Dual-Track Enforcement.

The Individual Rights Firewall serves a related purpose: political disagreements should not automatically destroy rights already acquired by residents.

These concepts do not mean that every individual dispute must be decided by an international tribunal.

Often, domestic agencies and courts will remain essential.

The point is to prevent people from losing protection merely because governments cannot settle their own disagreement.

When Arbitration Works — Bangladesh and India

Arbitration does not always end in continued disagreement.

In July 2014, an arbitral tribunal established under the United Nations Convention on the Law of the Sea issued an award concerning the maritime boundary between Bangladesh and India in the Bay of Bengal.

The Permanent Court of Arbitration served as registry for the proceedings.

The award determined the maritime boundary in the territorial sea, the exclusive economic zone, and the continental shelf, including areas beyond 200 nautical miles.

One arbitrator disagreed with parts of the majority’s reasoning and conclusions. The award was nevertheless issued.

Both governments welcomed the outcome as a resolution of their longstanding dispute.

Their response went beyond statements of approval. Bangladesh subsequently published an official maritime-boundary notification reflecting the award.

This was a different outcome from the Croatia–Slovenia arbitration.

Here, the legal procedure produced a decision that both governments accepted as a basis for settlement.

That does not mean every practical issue disappeared immediately.

But it demonstrates that arbitration can contribute to peaceful resolution when its authority is accepted and governments act on the result.

A binding award can settle a dispute. It cannot make acceptance and implementation automatic.

The contrast matters.

The lesson is not that arbitration always succeeds or that it inevitably fails.

A legal procedure and the political willingness to respect its outcome must support each other.

Consent, Integrity, and Compliance

Arbitration begins with consent, but consent alone is not enough.

The procedure must remain independent and fair. The parties also need reliable ways to carry out the decision.

These conditions are connected, but they are not identical.

Binding does not mean self-enforcing.

Even domestic judgments depend on institutions capable of giving them effect.

Between political communities, compliance may require monitoring, administrative cooperation, further legal proceedings, or political negotiation.

But enforcement must remain limited to the obligation involved.

A failure to transfer pension records should not give another institution control over unrelated domestic policies. A dispute about public debt should not become a justification for general political subordination.

Credible enforcement and limited authority must be designed together. The Four-Gap Audit considers why agreed reforms can fail in practice.

Arbitration Without a World Government

Does this require a World Government?

I do not think so.

Political communities can create institutions with authority limited to particular functions.

Arbitration is one example. Specialized courts, independent review bodies, and administrative cooperation provide others.

Some institutions can issue binding decisions. Others establish facts or assist negotiation.

They do not all need the same powers.

Croatia–Slovenia and Bangladesh–India show different outcomes within such arrangements.

In one case, the legitimacy of the procedure became disputed, and the final award did not bring agreement between the governments.

In the other, the parties accepted the award and treated it as a basis for settlement.

Neither case justifies creating an institution with unlimited authority over every political community.

But neither supports allowing each community to decide unilaterally what it owes others.

Political autonomy requires limits on shared authority, but peaceful cooperation also requires institutions capable of resolving disputes that no single community can settle alone.

A tribunal’s powers must be defined. Its procedures must be protected. Its decisions need lawful means of implementation.

Residents also need ways to defend their rights while governments disagree.

Rights and Institutions Must Be Defended

A treaty can create an arbitration procedure.

It cannot guarantee that the parties will continue to trust that procedure.

A tribunal can issue an award.

It cannot, by that act alone, ensure implementation.

And an agreement between governments may still leave individuals needing protection.

This is not a reason to abandon arbitration.

It is a reason to treat arbitration as part of a wider political and legal order.

Institutions must be established, supervised, defended against misuse, and improved when their weaknesses become clear.

The World Citizen Revolution is not completed by a declaration of rights or the creation of a court.

Rights must continue to be won, institutionalized, defended against retreat, and expanded. This concern is explored in Once Entry Is Won, How Is It Protected?

Legal institutions are among the means of doing that work. They do not replace the political responsibility of the people who depend on them.

The Purpose of Dispute Resolution

Political communities will disagree.

Some conflicts will concern money. Others will concern boundaries, movement, public services, or common rights.

The World Citizen Society should not pretend these disagreements will disappear.

Its task is to make them manageable without allowing the stronger community to impose its will—or creating a new general supremacy in the name of preventing conflict.

Arbitration can help.

It has contributed to peaceful settlements. It has also faced failures of confidence and implementation.

Its authority must be limited, its independence protected, and its decisions connected to lawful means of compliance.

Residents’ rights must remain protected throughout.

A community should not be the sole judge of an obligation it owes another.

A shared tribunal should not become the ruler of every community.

The purpose of dispute resolution is not to abolish political disagreement. It is to keep disagreement from becoming domination.

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Further Reading

Books

• The World Citizen Revolution
• The World Citizen Society — Especially the discussion of the Polycentric Rights Network, Dual-Track Enforcement, limited common powers, and the protection of acquired rights.

Related Essays

• How Can Rights Survive Political Breakup?
• How Can Security Be Maintained During Political Transition?
• Who Pays When Political Communities Change?
• Can Political Power Be Divided Without Creating a World Government?
• The Four-Gap Audit: Why Reform Can Fail Even When the Goal Is Right
• Once Entry Is Won, How Is It Protected?

References

1. Permanent Court of Arbitration. Arbitration Between the Republic of Croatia and the Republic of Slovenia, PCA Case No. 2012-04, official case record. https://pca-cpa.org/en/cases/3/
2. Republic of Croatia and Republic of Slovenia. Arbitration Agreement, signed November 4, 2009. Officially published text: https://narodne-novine.nn.hr/clanci/medunarodni/2009_11_12_140.html
3. Arbitral Tribunal. Partial Award, June 30, 2016, PCA Case No. 2012-04. Available through the PCA case record: https://pca-cpa.org/en/cases/3/
4. Arbitral Tribunal. Final Award, June 29, 2017, PCA Case No. 2012-04. Available through the PCA case record: https://pca-cpa.org/en/cases/3/
5. Permanent Court of Arbitration. Tribunal Issues Partial Award: Arbitration Between Croatia and Slovenia to Continue, June 30, 2016. https://docs.pca-cpa.org/2016/07/PCA-Press-Release-30062016.pdf
6. Court of Justice of the European Union. Republic of Slovenia v Republic of Croatia, Case C-457/18, Grand Chamber Judgment, January 31, 2020, ECLI:EU:C:2020:65. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:62018CJ0457
7. Court of Justice of the European Union. Press Release No. 9/20, January 31, 2020. https://curia.europa.eu/site/upload/docs/application/pdf/2020-01/cp200009en.pdf
8. Ministry of Foreign and European Affairs of the Republic of Croatia. Termination of the Arbitration Process Between Croatia and Slovenia: Causes and Consequences. https://mvep.gov.hr/services-consular-portal/access-to-information/croatia-and-the-european-union-245129/termination-of-the-arbitration-process-between-croatia-and-slovenia-causes-and-consequences/245130
9. Government of the Republic of Slovenia. Arbitration, official explanatory record. https://www.gov.si/en/registries/projects/arbitraza/
10. European Court of Human Rights. Chelleri and Others v. Croatia, Applications Nos. 49358/22, 49562/22 and 54489/22, decision adopted April 16, 2024, notified May 16, 2024. Official press release: https://hudoc.echr.coe.int/app/conversion/pdf/?filename=Decision+Chelleri+and+Others+v.+Croatia++-+Fishermen%E2%80%99s+applications+connected+to+Piran+Bay+dispute+found+inadmissible.pdf&id=003-7946744-11074583&library=ECHR
11. Permanent Court of Arbitration. Bay of Bengal Maritime Boundary Arbitration between Bangladesh and India, PCA Case No. 2010-16, Award of July 7, 2014. https://legal.un.org/riaa/cases/vol_XXXII/1-182.pdf
12. Permanent Court of Arbitration. Bay of Bengal Maritime Boundary Arbitration between Bangladesh and India, press release, July 8, 2014. https://pca-cpa.org/en/news/bay-of-bengal-maritime-boundary-arbitration-between-bangladesh-and-india-bangladesh-v-india/
13. Ministry of External Affairs, Government of India. Annual Report 2014–2015, discussion of the Bangladesh–India maritime boundary settlement. https://www.mea.gov.in/Uploads/PublicationDocs/25009_External_Affairs_2014-2015__English_.pdf
14. Ministry of Foreign Affairs, Government of Bangladesh. Maritime boundary notification dated December 24, 2014, published in the Bangladesh Gazette, January 14, 2015. https://www.dpp.gov.bd/upload_file/gazettes/12537_86009.pdf