Claims Adjudication Process

Initiating a Claim

Any State that is a member of the United Nations or World Trade Organization can initiate a claim under the Compact for damage to biological diversity occurring in that State.

The Compact fully recognizes and respects that States have the choice to pursue a claim for damage to biological diversity under the Compact or under otherwise applicable law. Members believe States will find the Compact to be a preferable alternative because it provides the certainty of a fair, clear and definite process and of the financial ability of Members to respond. The Compact also offers an opportunity for the timely resolution of a claim by qualified neutrals to efficiently and effectively handle claims for damage to biological diversity which are likely to be very complex.

To initiate the claim, the State submits to the Executive Director a signed Mutual Agreement for Binding Arbitration, a completed Claim Form, and the plausible evidence to establish damage and responsibility. The claim must be brought within three years of when the State knew or should have known of the damage to biological diversity and within twenty years from the time the LMO had been authorized or released.

The Mutual Agreement for Binding Arbitration sets forth the terms and obligations for the State in arbitrating a claim. Namely, the State agrees that the claim will be adjudicated under the terms and conditions of the Compact and that it will assure that the named Member is not subject to multiple recovery for the same incident of damage both under the Compact and a State’s civil liability system.

Process for Adjudicating a Claim

The Executive Director receives the claim, collects the named Member’s signature on the Arbitration Agreement, and submits the claim to a commissioner appointed by the PCA for the initial review.

The commissioner assures that the claim is properly completed, supported by plausible evidence, and in compliance with the Compact’s requirements. If the commissioner needs additional information to make these determinations, it may suggest fact-finding under the PCA’s rules. A State is given one year to resolve any deficiencies a commissioner finds in a claim or the claim will be dismissed.

If the Commissioner deems the claim complete, the Member will be asked to submit its information. The parties may engage in fact-finding and will have a time frame to work to settle the claim.

If settlement cannot be reached, a three-person tribunal will adjudicate the claim. The tribunal will consider information from all sides, can seek help from neutral experts, and will make a final determination. The standard of proof for each element of a claim or defense is “clear and convincing evidence.” The standard of proof for all other issues of fact is the preponderance of the evidence standard. All tribunal decisions are final.

Costs for Adjudicating a Claim

The Members pay the costs of the commissioner’s initial review for plausibility and completeness of a properly submitted claim. If the State’s claim is dismissed as improperly submitted, the State will be responsible for the costs and expenses of the commissioner.

If a claim proceeds beyond the commissioner’s initial review, each party to the claim pays an equal share of the costs of conciliation or arbitration and the fees of the conciliator and the tribunal. Each party will also bear its own costs of preparing for and participating in the conciliation and arbitration process.

To facilitate claims among certain categories of States, each Member has agreed to pay the portion of a State’s costs of pursuing a claim that correlates to that Member’s percentage of responsibility for the damage if the State prevailing is a “least developed,” “small island developing,” or “megadiverse” country as defined in the Compact. If a Member is 20% responsible for the damage in one of these States, the Member will pay 20% of that State’s reasonable costs.