Common use of Settlement of Disputes between Contracting Parties Clause in Contracts

Settlement of Disputes between Contracting Parties. (1) Disputes between Contracting Parties regarding the interpretation or application of the provisions of this Agreement shall be settled through official channels. (2) If the Contracting Parties cannot reach an agreement within twelve months, the dispute shall, upon request of either Contracting Party, be submitted to an arbitral tribunal of three members. Each Contracting Party shall appoint one arbitrator, and these two arbitrators shall nominate a Chairman who shall be a citizen of a third State. (3) If one of the Contracting Parties has not appointed its arbitrator and followed the invitation of the other Contracting Party to make that appointment within two months, the arbitrator shall be appointed upon the request of the latter Contracting Party by the President of the International Court of Justice. (4) If both arbitrators cannot reach an agreement about the choice of the Chairman within two months after their appointment, the latter shall be appointed upon the request of either Contracting Party by the President of the International Court of Justice. (5) If, in the cases specified under paragraphs (3) and (4) of this Article, the President of the International Court of Justice is a citizen of either Contracting Party or is otherwise prevented from carrying out the said function, the appointment shall be made by the Vice-President. If the Vice-President is a citizen of either Contracting Party or is otherwise prevented from discharging the said function, the appointment shall be made by the most senior Judge of the Court who is not a citizen of either Contracting Party. (6) The tribunal shall determine its procedure. (7) Each Contracting Party shall hear the cost of the arbitrator it has appointed and of its representation in the arbitral proceedings. The cost of the Chairman and the remaining costs shall be borne in equal parts by the Contracting Parties. (8) The decisions of the tribunal are final and binding on the Contracting Parties.