Case concerning the Arbitral Award Made by the King of Spain on 23 December 1906 (Honduras v. Nicaragua)

In 1894 Honduras (plaintiff) and Nicaragua (defendant) entered into the Gamez-Bonilla Treaty (the treaty), which set forth a procedure for friendly demarcation of the boundary line between the two countries. The treaty required the governments to appoint members to a Mixed Boundary Commission, tasked with studying and settling the boundaries between the countries. The treaty further provided some basic parameters for consideration of evidence regarding ownership of territory. Importantly, the treaty provided that if the Mixed Boundary Commission failed to settle the demarcation line, the matter would be submitted to arbitration, and that the arbitral tribunal’s decision would be binding. The Mixed Boundary Commission was able to settle a portion of the demarcation, but it was unable to agree on the boundary of a portion of the territory. Unable to resolve the final demarcation, Honduras submitted the dispute for arbitration before the king of Spain, who was an approved arbitrator pursuant to the terms of the treaty. In 1906 the king of Spain issued his decision, which favored Honduras. The day after the king of Spain issued the arbitral award, the president of Nicaragua sent a message to the president of Honduras recognizing the award. The award was published in the Official Gazette of Nicaragua in early 1907, and at the end of that year, the president of Nicaragua again acknowledged the award in his address to the legislative assembly of Nicaragua. However, in 1912 the foreign minister of Nicaragua challenged the validity of the arbitral award for the first time in correspondence with the foreign minister of Nicaragua. In 1958 Honduras instituted proceedings before the International Court of Justice, seeking a declaration that Nicaragua was obligated to give effect to the arbitral award. Nicaragua, in turn, sought declaration from the court that the arbitral award was unenforceable because (1) the treaty had expired before the award was entered, (2) the arbitrator had exceeded the authority granted by the treaty, (3) there was inadequate support for the conclusions in the award, and (4) the contradictory aspects of the award prevented its execution.