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The United States-Italy Air Transport Arbitration: Problems of Treaty Interpretation and Enforcement

Published online by Cambridge University Press:  28 March 2017

Paul B. Larsen
Paul B. Larsen*
Affiliation:
Southern Methodist University
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Extract

The 1946 Bermuda Agreement is the major model for the United States bilateral air transport agreements. The Chicago Convention of 1944 had failed to provide traffic rights for scheduled air carriers because the United States and the United Kingdom disagreed over economic regulation of international air transport. The agreement which these competitors made two years later at Bermuda rivaled the Chicago Convention in importance because its compromise formula became the key to the later bilateral air transport agreements upon which is based the existence of all international scheduled air transport.

Type
Research Article
Information
American Journal of International Law , Volume 61 , Issue 2 , April 1967 , pp. 496 - 520
Copyright
Copyright © American Society of International Law 1967

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References

1 Agreement with the United Kingdom on Air Services, Feb. 11, 1946, 60 Stat. 1499, T.I.A.S., No. 1507 [hereinafter called the Bermuda Agreement].

2 The 1966 edition of Treaties in Force lists sixty-two United States bilaterals. A few of these antedate the Bermuda Agreement and have not been changed, but the Administration's over-all adherence to Bermuda principles was finally restated in President Kennedy's Statement on International Air Transport Policy, released April 24, 1963.

3 The Convention on International Civil Aviation, Dec. 7, 1944, 61 Stat. 1180, T.I.A.S., No. 1591 [hereinafter called the Chicago Convention] created the International Civil Aviation Organization (ICAO). 110 states, including the United States and Italy, are ICAO members.

4 Cooper, “The Bermuda Plan—World Pattern for Air Transport,” 25 Foreign Affairs 59 (1946). The attempt to make the Bermuda Agreement into a multilateral convention failed in 1947. See Records of the Commission on Multilateral Agreement on Commercial Bights in International Civil Air Transport, Geneva (ICAO Doc. No. 5230, A2—EC/10) (1948). The Soviet bilaterals and several others are not based on Bermuda capacity principles.

5 Air Transport Agreement with Italy, Feb. 6, 1948, 62 Stat. 3729, T.I.A.S., No. 1902 [hereinafter called the 1948 Agreement].

6 21 ICAO Bulletin No. 1 at 7 (1966); ICAO statistics exclude People's Republic of China, the U.S.S.B. and all states which are not ICAO members.

7 Transatlantic Route Renewal Case (C.A.B. Docket No. 13577), Av. L. Rep. 21,609.04 (March 7, 1966). The C.A.B. concluded that trade between Italy and the United States is growing at such a “steady and substantial” rate, that the Board could certify Seaboard World Airlines, a cargo carrier, to operate into Italy in addition to TWA and PAA.

8 Internally there is wide use of arbitration in the U.S.S.R. (see Ramzaitsev, “The Law of International Trade in the New Soviet Legislation,” [1963] Journal of Business Law 229), and arbitration clauses are usually found in commercial contracts with foreign parties, although the U.S.S.R. has insisted on the use of a Moscow arbitration tribunal, as illustrated in Amtorg v. Camden Fibre Mills, 304 N.T. 519, 109 N.E. 2d 606 (1952). The Soviet Union has viewed international arbitration with suspicion, alleging that international tribunals are dominated by non-Communist states. See Corbett, Law in Diplomacy 169 (1959). One writer goes so far as to say that Communist states “consider it an ideological error to agree to arbitration or judicial settlement with a capitalist state.'’ Ouchi, Arbitration of International Commercial Disputes Involving Private Claims 200-201 (1964) (unpublished J.S.D. thesis, Yale Law School Library). But some Communist states, for example, Poland and Czechoslovakia, are parties to the Chicago Convention, which provides for arbitration of disputes arising under the Convention at the demand of one party (Arts. 84-88). Lately, a slight thaw in the Soviet attitude has been noticed. In commercial agreements, the Soviet trade agency may now arbitrate before a Swedish arbitral tribunal in Stockholm or even resort to the American Arbitration Association. See Domke, Commercial Arbitration 102-103 (1965). Hazard says that the Soviet Government favors arbitration over settlement by court of commercial contracts with foreign parties, and that the Soviet Government as a matter of policy favors arbitration before a Moscow tribunal, but that this is a matter which can be bargained about. Arbitral standards acceptable to Western states are generally maintained. John N. Hazard, Comments, in 1965 Proceedings, American Society of International Law 69, 71, 74. The Israeli-Soviet Oil Arbitration of 1958 is seen as an exception to this Soviet policy. The Foreign Trade Arbitration Commission of the U.S.S.R. Chamber of Commerce in Moscow in that case became subject to criticism for refusal to admit essential evidence which the Israeli companies wished to submit. See Domke, ‘ ‘ The Israeli-Soviet Oil Arbitration,” 53 A.J.I.L. 787 and 800 (1959).

9 Agreement with France on Air Transport Services, March 27, 1946, 61 Stat. 3445, T.I.A.S., No. 1678; Air Traffic Rights Dispute (United States v. France) (1963), 3 Int. Legal Materials 668, digested in 58 A.J.I.L. 1016 (1964) [hereinafter cited as United States v. France]; Compromis with France, Jan. 22, 1963, 14 U.S. Treaties 120, T.I.A.S., No. 5280; see Larsen, “Arbitration of the United States-France Air Traffic Rights Dispute,” 30 Journal of Air Law and Commerce 231 (1964).

10 Compromis with the Italian Republic, June 30, 1964, T.I.A.S., No. 5624 [hereinafter cited as Compromis with the Italian Republic], Air Traffic Rights Dispute (United States v. Italy) (1964), 4 Int. Legal Materials 974 (1965), digested in 60 A.J.I.L. 413 (1966) [hereinafter cited as United States v. Italy]. The Bermuda Agreement provides for arbitration in two places: a general arbitral clause in Art. 9 and a special clause for settlement of disputes over fares only in Annex, Sec. 11(g). A similar dual arbitration provision exists in the 1948 Agreement, Art. 12 and Annex, Sec. X(H).

11 1948 Agreement, Annex, Sec. VII; Bermuda Agreement, Final Act, at par. 6.

12 1948 Agreement, Art. 13, Annex, Sec. IX. The same pattern is followed by all U. S. bilateral air transport agreements, except the Agreements with India, Feb. 3, 1956, 7 TJ. S. Treaties 275, T.I.A.S., No. 1595, and recently with Greece, 61 Stat. 2937, T.I.A.S., No. 1626, as amended Feb. 7, 1966, 54 Dept. of State Bulletin 386 (1966), which provide for predetermination and regulation of scheduled air traffic.

13 1948 Agreement, Annex, Secs. I and II.

14 There are five Freedoms of the Air: First Freedom grants to contracting states the right to fly over any contracting state; Second Freedom grants them the right to make refueling stops in any contracting state; Third Freedom grants to contracting states the right of air transport to any contracting state; Fourth Freedom grants them the right of air transport from any contracting state back to the carrier's national state; Fifth Freedom grants the contracting states the right of air transport between any contracting state and a third contracting state. The first two are known as the technical Freedoms, the last as the commercial Freedoms. The 1948 Agreement exchanges all five for the air routes drawn in the Agreement.

15 This is the disputed phrase. Sec. III in its entirety reads: “One or more air carriers designated by each of the contracting parties under the conditions provided in the present Agreement and the Annex thereto will enjoy, in the territory of the other contracting party, rights of transit and of stops for non-traffic purposes, as well as the right of commercial entry and departure for international traffic in passengers, cargo and mail at the points enumerated on each of the routes specified in the schedules attached.” The English and Italian versions of Sec. III are equally authentic, as provided by Art. 15, but the parties to the dispute do not base any of their contentions on a difference in language.

16 As result of the North Atlantic Route Case, 6 C.A.B. 319 (1945), TWA was allocated the Southern Europe route and this airline, therefore, initially was given the air traffic rights obtained by the United States from Italy.

17 TWA operated an all-cargo service from the United States via Canada, Ireland, France, Switzerland, Italy, Greece, Egypt to Palestine, ABC World Air Ways Guide, Table No. 84 (June, 1947). For contemporary expectations relating to air cargo at this time, see Drew and Parser, “ A i r Cargo: a New Phase in Marketing,” 14 Journal of Air Law and Commerce 11, 13 (1947), forecasting great future use of air cargo because of the widely organized cargo service, availability of large planes, reduced rates caused by competition, and all-cargo operations, advertising, dependable service, expansion of routes and increased activity in business.

18 North Atlantic Route Transfer Case, 11 C.A.B. 676 (1950). The Civil Aeronautics Act of 1938, par. 2, 52 Stat. 973, committed the United States to a policy of sound competition among its airlines. The policy of “chosen carriers” was never adopted. ABC World Air Ways Guide, Tables 51 and 83 (December, 1950).

19 United States v. Italy, at 976; ABC World Air Ways Guide, Table 287 (March, 1959).

20 United States v. Italy, at 976; ABC World Air Ways Guide, Table 199 (March, 1961).

21 United States v. Italy, at 976; ABC World Air Ways Guide, op. cit. note 20 above, Table 40.

22 Notice of new service or change in existing service is necessary so that airport terminals and air traffic control can be kept informed.

23 Doty, “Atlantic Case Awards to Spur Opposition,” Aviation Week, Feb. 21, 1966, p. 34. Alitalia has ordered two DC-8 all-cargo jets which will be delivered in the spring of 1967; until that time the airline will be inferior to TWA and PAA in equipment strength, Aeroplane, Feb. 10, 1966, p. 21; consequently, while ICAO members reported a 28% average increase in air cargo carriage (ICAO Bulletin, note 6 above), Alitalia's average increase was only half of that, during 1964-65, Aeroplane, Feb. 10, 1966, p. 21. These statistics should be seen against the background of the rather lucrative Italian air cargo market.

24 1948 Agreement, Annex, Sees. VII and IX.

25 United States v. Italy, at 977.

26 Ibid.

27 1948 Agreement, Art. 10.

28 1948 Agreement, Art. 12.

29 Each party was permitted four flights a week. Alitalia put into service a cargo jet which it had just leased from the TJ. S. operator, Airlift International. The United States allocated two weekly nights to TWA and PAA each, see United States v. Italy, at 977.

30 Compromis with the Italian Republic, Art. I.

31 Ibid

32 Carlston, The Process of International Arbitration 64 (1946), and Anand, International Courts and Contemporary Conflicts 400 (1964; unpublished J.S.D. thesis, Yale Law School Library), consider a compromis a prerequisite for international arbitration. In this writer's opinion one contractual obligation is sufficient; arbitration can be effectuated by the arbitral clause alone as it is done in commercial arbitration (Domke, op. tit. note 8 above at 32), and in the interest of avoiding delay, this is preferable. The 1958 Model Rules on Arbitral Procedure adopted by the International Law Commission (U.N. Doc. A/3859 (1958), 53 A.J.I.L. 239 (1959)), Art. II, state that a compromis is necessary only when there is insufficient provision for arbitration in the agreement. The I.L.C. Model Rules provide a guide to effective international arbitration, although they do not necessarily codify present international law. They have been the object of some criticism. De Visscher, “Reflections on the Present Prospect of International Adjudication,” 50 A.J.I.L. 467 (1956) ; and Simpson and Fox, International Arbitration 86 (1959).

33 Carlston, op. cit. note 32 above, at 259; Kellor and Domke, Arbitration in International Controversy 37, name negotiation, inquiry, mediation and settlement as bargaining processes, arbitration and judicial settlement as judicial processes.

34 Domke, op. tit. note 8 above, at 71.

35 Mankiewicz, “Pouvoir Judiciaire du Conseil et Réglement Pour la Solution de Différends,” 3 Annuaire Français de Droit International 383 (1957); Cooper, “New Problems in Civil Aviation Arbitral Procedure,” 2 Arbitration Journal 119 (1947); and specifically Larsen, “Arbitration in Bilateral Air Transport Agreements,” 2 Arkiv for Luftrett 159 (1964).

36 1948 Agreement, Art. 12, has a two-month time limit which is changed to sixty days in the Compromis with the Italian Republic, Art. II.

37 1948 Agreement, Art. 12, has a one-month limit compared with the thirty-day limit in the Compromis with the Italian Republic, Art. II.

38 1948 Agreement, Art. 12, lacks such a time limit.

39 Agreement with France, Art. X, note 9 above, provides that if the two partyappointed arbitrators cannot agree on appointment of the third arbitrator, the President of the International Court of Justice shall make the appointment; since a consensus could not be established, the President made the appointment.

40 Larsen, loc. cit. note 35 above, at 149-150, loo. cit. note 9 above, at 237. Since the outside appointing authority does not stand to gain or lose by delay, it might agree to act within a reasonable time limit and probably would obey, but it would be difficult to force the appointing authority to act within such a limit.

41 The Chicago Convention, Art. 85, provides that the ICAO Council shall maintain a panel of “qualified and available” arbitrators for settlement of disputes arising under the Convention. The ICAO Council decided in 1963 to ask the contracting states to submit names of qualified persons which, the Council agreed, should constitute the panel. Annual Report of the Council to the Assembly for 1963, ICAO Doc. No. 8402, A15-P/2 (1964).

42 Rules for the Settlement of Differences. ICAO Doc. No. 7782 (1959). The ICAO Committee which drafted these rules expressed the view that no obligation rested on the ICAO Council to assume any duties which bilateral agreements between the states gave to the ICAO Council, ICAO Doc. No. 7456, A8-P/2 6(1954). And Cheng states that ICAO is opposed to performing these functions “which it seems to regard as having been thrust upon it. “ Cheng, The Law of International Air Transport 460 (1962).

43 In this connection it is important to note that all arbitral clauses which give any arbitration function to the now defunct PICAO (Provisional International Civil Aviation Organization) Council, are unenforceable. In the Anglo-Iranian Oil Co. Case (United Kingdom v. Iran), [1952] I.C.J. Rep. 93, the Vice President of the International Court of Justice, acting for the President, who was of the same nationality as one of the parties, refused to act in appointive capacity because the arbitral clause in the agreement between the parties gave appointive authority to the President of the Permanent Court of International Justice; the Vice President decided that he was not the appointive authority intended by the parties to the agreement. Consequently ambiguous description of the tribunal is a serious danger to the proper functioning of arbitration. See also the Ambatielos Case (Greece v. United Kingdom) [1953] I.C.J. Rep. 10; Interpretation of Peace Treaties with Bulgaria, Hungary and Romania (Second Phase), [1950] I.C.J. Rep. 65, 221, 229; Johnson, “The Constitution of an Arbitral Tribunal,” 30 Brit. Yr. Bk. Int. Law 152, 163-165 (1953); Larsen, loc. cit. note 35 above, at 149; loo cit. note 9 above, at 237.

44 In Interpretation of Peace Treaties, note 43 above, the United Nations General Assembly asked the International Court of Justice for an advisory opinion on whether the U.N. Secretary General could appoint the arbitrators which Bulgaria, Hungary and Romania had refused to nominate in order to avoid arbitration. These World War II Peace Treaties provided for a tripartite arbitral commission, but they did not provide for the situation where parties failed to make their norminations to the commission. The I.C.J, held that the Secretary General could not make these appointments, and thus establishment of the tribunal was frustrated.

45 I.L.C. Model Rules, Art. III, cited note 32 above.

46 1948 Agreement, Art. 12, provides that the third arbitrator may not be a national of either party; but to avoid conflicts of interest concerning nationality, it is desirable also to adopt the provision of the agreement between United Kingdom and Yugoslavia, Cmd. No. 972, 359 U.N.T.S. 340 (1959), to the effect that if the President of the International Court of Justice is of the same nationality as one of the parties, the President's next non-national deputy shall make the appointment. See also Anglo- Iranian Oil Co. case, note 43 above; I.L.C. Model Rules, Art. III , cited note 32 above.

47 By choosing as Registrar Professor Philippe Cahier of the Graduate Institute of International Studies in Geneva, who had also served the U. S.-France Tribunal, the U. S.-Italy Tribunal acquired some continuity.

48 Compromis with the Italian Republic, Art. II.

49 These two arbitrators wrote the majority opinion. If this Tribunal is compared with the U. S.-France Tribunal, it is found that the latter was composed of international law experts without specialized knowledge of air transport problems.

50 United States v. France, at 672.

51 The issue of traffic rights to Beirut and Damascus was not a specific question presented for arbitration, but it appeared to the Tribunal to be a necessary contingent matter which could be considered under its liberal authorization to examine ‘ ‘ all formal and informal understandings” between the parties, Larsen, loc. cit. note 9 above at 242-243.

52 United States v. Italy, at 974.

53 Cheng, General Principles of Law as Applied by International Courts and Tribunals 276-277 (1953); I.I/.C. Model Rules, Art. IX, loc. cit. note 32 above.

54 Domke, “International Civil Aviation Sets New Pattern,” 1 Int. Arb. J. 14, 20 (1945).

55 Carlston, op. cit. note 32 above, at 7, 31.

56 I.L.C. Model Rules, Art. II (iv), loc. cit. note 32 above.

57 Ralston, International Arbitration from Athens to Locarno 76 (1929).

58 The I.C.J. Statute, Art. 30 (1), provides that the Court shall lay down its own procedural rules.

59 Convention for the Pacific Settlement of International Disputes, Oct. 18, 1907, 35 Stat. 2228, Treaty Series No. 536. The Hague Peace Conferences of 1899 and 1907 culminated in this Hague Convention of 1907. The parties failed to agree on compulsory submission to arbitration, but the Convention is a good source for arbitration rules as indicated by use in the Compromis with Prance, Art. IX.

60 1907 Hague Convention, Art. 59, note 59 above.

61 Ibid., Art. 60 (3).

62 Ibid., Arts. 64-84.

63 Compromis with the Italian Republic, Art. III.

64 Chicago Convention, Art. 85.

65 Greater confidence in the tribunal's ability to arrange its own procedure reduces the importance of a compromis.

66 Cheng, op. cit. note 42 above, at 463; Larsen, note 35 above at 156; the Compromis with the Italian Republic (Arts. Ill , V) repeats this rule.

67 Compromis with the Italian Republic, Art. IV.

68 The Tribunal extended this time limit more than one month. Oral hearings were stipulated to be held between the sixtieth and the ninetieth day after submission of Replies. See Compromis with the Italian Republic, Art. IV; oral hearings were held at Geneva Jan. 26-29, 1965, see U. S. v. Italy, at 975.

69 Compromis with the Italian Republic, Art. V.

70 Ibid.

71 Ibid., Art. IV.

72 Ibid., Art. VII.

73 The parties did not make use of this provision. France asked for clarification of the decision in United States v. France. Larsen, note 9 above, at 243.

74 Larsen, note 35 above, at 149.

75 1948 Agreement, Art. 12.

76 Compromis with the Italian Republic, Art. VIII.

77 I t took the President of the International Court of Justice more than five months to find a third arbitrator for the IT. S.-France arbitration. Larsen, note 9 above, at 237.

78 Carlson, op. cit. note 32 above, at 140; Simpson and Fox, op. cit. note 32 above, at 130; Larsen, note 9 above, at 236.

79 United States v. Italy, at 979-984.

80 Frontier between Turkey and Iraq, P.C.I.J., Ser. B, No. 12, p. 19 (1925) (Advisory Opinion); Polish Postal Service at Danzig, P.C.I.J., Ser. B, No. 11, p. 39 (1925); Competence of the General Assembly for the Admission of a State to the United Nations, [1950] I.C.J. Rep. 8 (Advisory Opinion); Constitution of the Maritime Safety Committee of the Intergovernmental Maritime Consultative Organization, [1960] I.C.J. Rep. 159-160 (Advisory Opinion) ; Restatement, The Foreign Relations Law of the United States, Pars. 149, 150 (Prop. Off. Draft, 1962).

81 United States v. Italy, at 980: “Accordingly, even on a bare textual analysis using the word ‘and’ in Section I I I in its normal cumulative sense, all-cargo services are included in, not excluded from the right of commercial entry and departure for international traffic on the part of designated carriers.” Ibid. The Tribunal continues that, since “the meaning of the Agreement is clear and not ambiguous,” ibid., it need not consider the theory of contra proferentem, and the principle that that interpretation which least restricts state sovereignty is preferable. The Tribunal discredits the latter rule of interpretation, citing the case of Territorial Jurisdiction of the International Commission of the River Oder, P.C.I.J., Ser. A, No. 23, p. 26 (1929), which states that this rule “though sound in itself, must be employed with greatest caution,” ibid.; it also cites for the same reason the Lake Lanoux Case (France v. Spain), 62 Revue Générate de Droit International 99 (1958), saying that “The Tribunal cannot admit of such an absolute formula.“

82 certain German Interests in Upper Silesia, P.C.I.J., Ser. A, No. 6, p. 14 (1925).

83 United States v. Italy, at 981.

84 South-West Africa Cases, [1962] I.C.J. Rep. 336; Resolution of the Institute of International Law adopted April 11-20, 1956, Annuaire, 338 et seq. (1956); 1 Guggenheim, Traité de Droit International Public 133 (1953); de Visscher, Problemes d'Interprétation Judiciaire en Droit International Public 17 et seq. (1963).

85 Chicago Convention, Art. 5 (2), uses “or “ but Art. 7 uses “ and “ to express the same thought.

86 I.e., in Sec. Ill of the Annex.

87 Bermuda Agreement, Annex I.

88 Bermuda Agreement, Final Act (6), states that Agreement's objective to provide “capacity adequate to the traffic demands,” which the Tribunal finds to include allcargo service.

89 United States v. Italy, at 981.

90 Ibid. at 982.

91 Records of the Commission, op. cit. note 4 above, at 97 (Italian Proposal). ‘

92 Although even if it had been, the parties would have wanted to include it, because of their awareness of the fast-moving technical developments in air transport; see U. S. v. Italy, at 982.

93 1948 Agreement, Annex, Sec. VII.

94 Ibid., Art. 13; Annex, See. IX.

95 The Tribunal finds its support in the Competence of the International Labor Organization with Respect to Agricultural Labor, P.C.I.J., Ser. B, pp. 39-41 (1922) (Advisory Opinion).

96 United States v. Italy, at 983.

97 The International Status of South-West Africa, [1950] I.C.J. Rep. 135-136, cited by the Tribunal to the effect that the interpretation which a party itself gives to an agreement is of particular importance when involving “recognition by a party of its own obligations” under the agreement, obviously pointing to Italy's subsequent conduct; the Tribunal also cited de Visscher, op. cit. note 84 above, at 125, stating that “prolonged behavior” is not necessary to indicate attitude of a party.

98 United States v. France, at 719; Larsen, note 9 above, at 241.

99 Under Italy's Air Transport Agreement with the United Kingdom, Cmd. No. 8258, 94 U.N.T.S. 239 (1948), and the United States’ Air Transport Agreement with India, note 12 above.

100 United States v. Italy, at 984.

101 l907 Hague Convention, Art. 81, note 59 above; I.L.C. Model Eules, Art. XXXII, loc. cit. note 32 above; Simpson and Fox, op. cit. note 32 above, at 228; Larsen, note 35 above, at 243.

102 Alabama Claims (United States v. Great Britain), 1 Moore, International Arbitration 495, 659 (1872); Hague Convention, Art. 37, note 59 above; I.L.C. Model Rules, Preamble, loo. cit. note 32 above; Simpson and Fox, op. cit. note 32 above, at 260; Carlston, op. cit. note 32 above,, at 205; Larsen, note 25 above, at 154.

103 United States t>. Italy, at 984-987.

104 U.N. Doc. A/5809, Art. 69 (1964).

105 Lotus ease (France v. Turkey), P.C.I.J., Ser. A, No. 10, p. 16 (1927), in which the Court held that it was bound to observe textuality but nevertheless proceeded to look to travaux préparatoires relating to the Lausanne Convention of July 24, 1923 (28 L.N. Treaties Series 11), on which France based its argument. Lauterpacht adds that this rule established by the Lotus case has been widened. The trend is to permit access to extratextual matters regardless of the state of clarity of the text. Lauterpacht, “Some Observations on Preparatory Work in the Interpretation of Treaties,” 48 Harvard Law Rev. 549, 571 (1934-35); McDougal, Lasswell, Miller, Interpretation of Agreements and World Public Order: Principles of Content and Procedure, Introduction 10 (this is an unpublished manuscript for which this writer is deeply grateful to the authors for having made available to him. The manuscript is expected to be published in book form during 1967. References are to pagination of the manuscript) [hereinafter cited as McDougal].

106 United States v. France, at 700, states the Tribunal's approach: “ In the opinion of the Tribunal, it would not be possible to arrive at a satisfactory interpretation of those clauses of the United States-France Agreement involved in the dispute submitted to the present Arbitration, nor at a proper definition of the rights and obligations deriving therefrom, if a given expression such as “Near East,” which appears in the description of route 1 of Schedule II of the Annex to the Agreement, were to be isolated. The sense in which this expression was employed at the place referred to cannot be determined without reference to the context.“

107 In the sense of what McDougal would call “shared expectations,” McDougal, Ch. Ill , p. 6.

108 Ibid.

109 Ibid., Ch. II, p. 6.

110 Ibid., at Introduction, p. 12. As of which time should the shared expectations of the parties be determined? McDougal believes that the interpreter must look for the continuing consensus of the parties; he therefore rejects the view that shared expectations should be determined exclusively as of the time of the making of an agreement, ibid., Ch. III , pp. 29-30.

111 The United States gave France a copy of the decision in the North Atlantic Route Case, note 16 above; V. S. v. France, at 705-706; Larsen, note 9 above, at 240.

112 Peace Treaties case, note 43 above, at 229; McDougal, Ch. IV, pp. 61-62.

113 The Chicago Convention had not accomplished that.

114 1948 Agreement, Art. 13, and Annex, Sees. VII, IX.

115 McDougal, Ch. II, p. 41, for use of subsequent conduct for treaty interpretation purposes: “Take into account the whole sequence of acts of communication and collaboration that have occurred since the outcome phase. Action by the parties in reliance upon asserted or implicit interpretations during the course of performing an agreement is appropriately regarded as reliable evidence of shared subjectivities and may be given priority over contradictory evidence even from the outcome phase.“

116 United States v. Italy, at 983.

117 Ibid.

118 Ibid, at 987.

119 McDougal finds that there is a tendency to permit consideration of prior conduct (pre-outcome events) in treaty interpretation, see McDougal, Ch. IV, p. 5; this view must be seen as part of the author's concern that the entire period of the parties’ interaction be included in the examination, see Introduction, p. 11

120 McDougal, Ch. II, p. 44.

121 Ibid., p. 34.

122 Italy-United Kingdom Agreement, note 99 above; United States v. Italy, note 10 above, at 984.

123 McDougal, Ch. IV, p. 12. Lauterpacht, J., in the Asylum case (Colombia v. Peru), [1950] I.C.J. Rep. 266, 306, also rejects this theory because its acceptance would involve preference of one state's sovereignty over that of another.

124 McDougal, Ch. II, p. 35.

125 Dennis, “Compromise—The Great Defect of Arbitration,” 11 Columbia Law Rev. 493 (1911). Arguing to the contrary is Carlston, op. cit. note 32 above, at 258.

126 Cheng, note 42 above, at 458, finding authority in British Claims in the Spanish Zone of Morocco, 1924-25, 2 Int. Arb. Awards 615 (1925), and in The I'm Alone, 2 Int. Arb. Awards 1609 (1935); see also Larsen, note 35 above, at 155, and note 9 above, at 236.

127 United States arbitration practice may be illustrated by Delma Engineering Corp. v. Johnson Contracting Corp., 293 N.T. 653, 56 N.B. 2d 253 (1944). TX.S.S.B. practice is well described by Ramzaitsev, note 8 above.

128 Carlston, note 32 above, at 228; Simpson and Pox, note 32 above, a t 264.

129 The Compromis with the Italian Republic, Art. VII, prolonged the lifetime of the tribunal to the extent of giving the parties four weeks after the decision to ask for its clarification; neither of the parties made use of this privilege.

130 Reisman, ‘ ‘ The Role of the Economic Agencies in the Enforcement of International Judgments and Awards,” 19 Int. Organization 929, 930 (1965).

131 Larsen, note 9 above, at 243-244.

132 The Italian denunciation of June 1, 1966, takes effect June 1, 1967. See 5 II Diritto Aereo 173 (1966).

133 Aeroplane, May 19, p. 14, and June 16, 1966, p. 12; Aviation Week, June 6, 1966, p. 42. The parties have twelve months from June 1, 1966, in -which to agree on new terms, since the denunciation does not take place for one year.

134 In the following discussion institutional arbitration is arbitration arranged by an association to which both parties belong; in private arbitration the parties select an arbitration tribunal agreeable to both.

135 Kellor and Domke, op. cit. note 33 above, at 41.

136 1907 Hague Convention, note 59 above, Arts. 41, 45.

137 Kellor and Domke, note 33 above, at 5.

138 U.N. Charter, Art. 92.

139 1907 Hague Convention, note 59 above, Arts. 51-90.

140 Compromis with France, Art. IX.

141 Interim Agreement on International Civil Aviation, Dec. 7, 1944 (59 Stat. 1516, 171 U.N. Treaty Series 345, 40 A.J.I.L. Supp. 63 (1946)), created the Provisional International Civil Aviation Organization (PICAO).

142 United Kingdom-Greece Air Services Agreement, Cmd. No. 7348, 35 U. N. Treaty Series 163 (1945); United Kingdom-Portugal Air Services Agreement, Cmd. No. 6727, 5 U.N. Treaty Series 37 (1945) ; United Kingdom-Netherlands Air Services Agreement, Cmd. 6893, 4 U.N. Treaty Series 367 (1946), and the Bermuda Agreement, Art. 9, and Annex 11(g).

143 The Bermuda Agreement, Annex 11(g), provides for arbitration by the PICAO Council or its successor, by which is meant the ICAO Council. ICAO superseded PICAO on April 4, 1947, when the Chicago Convention had obtained sufficient ratifications.

144 See note 42 above.

145 United States v. France, at 670.

146 Goedhuis, “Questions of Public International Law,” 81 Hague Academy Recueil des Cours 205, 267 (1952); Cheng, op. cit. note 42 above, at 460; Hingorani, “Dispute Settlement in International Civil Aviation,” 14 Arbitration Journal 14, 15 (1959); Larsen, note 35 above, at 159.

147 Chicago Convention, Art. 51.

148 Cheng, op. cit. note 42 above, at 100-105; Larsen, note 35 above, at 159.

149 [1963-1964] I.O.J. Yearbook 255-321 lists 692 instruments giving the I.C.J. President a part in appointing arbitrators. The President has always been willing to perform these functions, ibid, at 49. See also Larsen, note 35 above, at 161.

150 See note 8 above. The I.C.J. President is not the only possibility. Other nonpolitical appointive authorities could be the International Chamber of Commerce or the World Bank.

151 Anglo-Iranian Oil Co. case, note 43 above.

152 Members of the I.C.J, may not serve as arbitrators, take part in conciliation or inquiry or similar duties if the possibility exists that their decisions may later be considered by the I.C.J, itself; see [1953-1954] I.C.J. Yearbook 96; see also Anand, op. cit. note 32 above, at 322-327.

153 Simpson and Fox, op. cit. note 32 above, at 88-89, but particularly Anand, op. cit. note 32 above, at 274, 284-285.

154 Simpson and Pox, op. cit. note 32 above, at 88; Larsen, note 35 above, at 152-153.

155 The importance of the third arbitrator varies; naturally his r61e may not be so crucial when the decision is unanimous, as was the United States-France decision. See also Domke, op. cit. note 8 above, at 71.

156 Arbitral clauses in bilateral air transport agreements usually provide that each party shall pay directly the expenses of its chosen arbitrator. In this respect the arbitral clause in the 1948 Agreement is typical.

157 Gross, “Some Observations on the International Court of Justice,” 56 A.J.I.L. 33, 39 (1962).

158 But lengthy arbitrations are not unknown, as observed by Johnson, note 43 above, at 175.

159 The Compromis with the Italian Republic, Art. VI, provides that ‘ ‘ All proceedings in connection with this arbitration shall be private, and the record of the proceedings shall not be made public except by agreement of the parties.''

160 Carlston, Law and Organization in World Society 163-164 (1962), and Anand, op. cit. note 32 above, at 606-612, describe post-World-War-II practice. But in view of the many values of international arbitration, this writer believes that a numbered calculation gives little indication of its over-all value.

161 Larsen, loc. cit. note 35 above, at 161-162.

162 The American Arbitration Association reports a record number of arbitrations in 1965, when the A.A.A. recorded a total of 11,789 cases. Administration of commercial arbitrations rose from 800 cases in 1961 to 1276 cases in 1965. See Arbitration News, No. 3, 1966, p. 2; see also Contini, “International Commercial Arbitration,” 8 Am. J. Comp. Law 183 (1958).

163 The Jay Treaty of 1794 between the United States and the United Kingdom, 8 Stat. 116, provided the first real lesson in international arbitration.

164 Peace Treaties and Anglo-Iranian Oil Co. cases, note 43 above.