On 29 June 2017, the tribunal rendered its “Final Award” in an arbitration concerning a territorial and maritime dispute between Croatia and Slovenia. Croatia had withdrawn from the arbitration process in 2015 and has stated that it does not recognise the award as binding.
The dispute dates back to 1991 when the two republics of the former Yugoslavia became independent without reaching agreement on the territorial and maritime border between them. In November 2009, Croatia and Slovenia entered into an Arbitration Agreement, pursuant to which an arbitral tribunal was appointed to determine “the course of the maritime and land boundary between the Republic of Slovenia and the Republic of Croatia”; “Slovenia’s junction to the High Sea”; and “the regime for the use of the relevant maritime areas”.
Following the disclosure of improper contacts between Slovenia’s agent in the arbitration and its appointed arbitrator during the course of the proceeding, Croatia withdrew from the arbitration and initiated a procedure to terminate the Arbitration Agreement in 2015. Slovenia’s and Croatia’s appointed arbitrators resigned. A reconstituted tribunal affirmed in its Partial Award in 2016 that Slovenia had violated the Arbitration Agreement, but held nevertheless that the Arbitration Agreement remained in force. It thus proceeded with the case in Croatia’s absence.
In its Award of 29 June 2017, the tribunal firstly determined the land boundary in “more than 20 areas”, using cadastral limits established in the 19th century for tax collection purposes as “prima facie indication” of existing titles to the boundary. In relation to the maritime boundary, the tribunal delimited the Bay of Piran/Savudrija on the basis of the effectivités (i.e., the conduct of administrative authorities as proof of effective exercise of territorial jurisdiction) at the date of independence. In delimiting the territorial sea, the tribunal adjusted the equidistant line (in favour of Slovenia) to take into account the northerly orientation of Cape Savudrija, leaving “the larger part of the Bay to Slovenia”.
Lastly, the tribunal determined a “junction” between the territorial sea of Slovenia and the High Sea by creating a “Junction Area” through Croatia’s territorial sea and created a “special regime” for the Junction Area. The tribunal observed that its “special regime” is “different from any [other] regime established under [UNCLOS]”. The tribunal stated that it was intended to guarantee “both the integrity of Croatia’s territorial sea and Slovenia’s uninterrupted and uninterruptible access from and to the ‘High Sea’”.
The Government of the Republic of Croatia has stated that, having withdrawn from the arbitration in 2015 “because of unlawful acts of Slovenia” and the “compromised arbitration process”, the award “does not in any way bind Croatia and Croatia shall not implement it.”