## Facts

- The United Nations and the United States are parties to the United Nations Headquarters Agreement of 26 June 1947, under which the United States serves as host State.
- U.S. legislation (Title X of the Foreign Relations Authorization Act for Fiscal Years 1988–1989) restricted the Palestine Liberation Organization (PLO) from maintaining an office within U.S. jurisdiction.
- The PLO maintained a Permanent Observer Mission to the United Nations in New York, whose continued functioning the Secretary-General viewed as connected to the Headquarters Agreement framework.
- The Secretary-General concluded that the U.S. legislation created a dispute with the United States concerning the interpretation or application of the Headquarters Agreement.
- Section 21 of the Headquarters Agreement provides for arbitration of disputes concerning interpretation or application of the Agreement that are not settled by negotiation or other agreed means.
- After efforts at amicable settlement failed, the Secretary-General invoked Section 21 by nominating an arbitrator and requesting the United States to nominate its arbitrator.
- The United States indicated it was not willing, at that time, to enter formally into the Section 21 procedure and was still evaluating the situation.
- The General Assembly requested an advisory opinion on whether the United States was under an obligation to enter into arbitration under Section 21 in the circumstances.
- The International Court of Justice used an accelerated procedure and issued a unanimous advisory opinion.

## Issues

1. Whether a dispute existed between the United Nations and the United States of the kind contemplated by Section 21 of the Headquarters Agreement.
2. Whether the dispute concerned the interpretation or application of the Headquarters Agreement, bringing it within Section 21.
3. Whether the condition for arbitration—failure to settle by negotiation or another agreed mode—had been satisfied.
4. Whether the United States was obligated to enter into arbitration under Section 21 notwithstanding reliance on domestic legislation.

## Decision

- The Court advised unanimously that the United States was under an obligation, in accordance with Section 21 of the Headquarters Agreement, to enter into arbitration to settle the dispute with the United Nations.
- The Court confined its opinion to the applicability of the arbitration obligation and did not decide whether the U.S. legislation was compatible with the Headquarters Agreement.
- The Court found that the parties’ opposing positions and conduct demonstrated an objective disagreement on legal rights and obligations under the Agreement.
- The Court concluded the dispute fell within “interpretation or application” of the Agreement because it concerned whether the host State could apply its measures in a manner affecting the functioning of the Observer Mission under the Headquarters framework.
- The Court determined that negotiations had reached a deadlock, satisfying Section 21’s precondition to arbitration.
- The Court rejected the notion that domestic law could excuse non-performance of the treaty-based duty to participate in the agreed arbitral process.

## Legal Principles

- A treaty-based arbitration clause binds the parties when its conditions are met; a party may not avoid the agreed procedure by declining to participate.
- A “dispute” exists where there is an objectively demonstrable disagreement on a point of law or fact, reflected in the parties’ statements and conduct.
- Disputes about the host State’s obligations affecting the functioning of missions connected to the headquarters arrangement may constitute disputes concerning the “interpretation or application” of a headquarters agreement.
- Where negotiations have failed or become deadlocked, an arbitration clause conditioned on unsuccessful negotiations becomes operative.
- In the performance of treaty obligations, a State may not invoke domestic law to justify failure to comply with its international commitments.

## Conclusion

The Court advised that the United States was required to enter arbitration under Section 21 of the Headquarters Agreement because a qualifying dispute existed, negotiations had reached deadlock, and domestic legislation could not relieve the host State of its treaty obligation to use the agreed dispute-settlement mechanism.


Applicability of the Obligation to Arbitrate Under Section 21 of the U.N. Headquarters Agreement of 26 June 1947, Advisory Opinion, 1988 I.C.J. 12 (Apr. 26)