On 22 July 1971 Salvador Allende and Alejandro Agustín Lanusse, the Presidents of Chile and Argentina, signed an arbitration agreement (the Arbitration Agreement of 1971). This agreement related to their dispute over the territorial and maritime boundaries between them, and in particular the title to the Picton, Nueva and Lennox islands near the extreme end of the American continent, which was submitted to binding arbitration under the auspices of the United Kingdom government.

On 2 May 1977 the court ruled that the islands belonged to Chile (see the Report and decision of the Court of Arbitration). On 25 January 1978 Argentina repudiated the arbitration decision and on 22 December 1978 started (and a few hours later aborted) military action to invade both those islands and continental Chile.See Argentine newspaper Clarín of Buenos Aires, 20 December 1998

The court The British Crown had previously in 1902 and 1966 acted as arbitrator between Chile and Argentina (see Arbitration 1902 here), but on this occasion the statutory framework of the Arbitration was different.

The Arbitration Agreement of 1971 stipulated: the names of the five judges appointed (see the preamble of the Arbitration Agreement): Hardy Cross Dillard (United States of America) Gerald Fitzmaurice (United Kingdom) André Gros (France) Charles D. Onyeama (Nigeria) Sture Petrén (Sweden) the region where the court was to define the borderline (A polygon ABCDEF, known as "Hammer", see paragraph 4 of Article 1 of the Arbitration Agreement) that the final decision would be submitted to the British Crown, which was then to recommend acceptance or rejection of the award of the court but not to modify it (Article XIII of the Arbitration Agreement) that the Court of Arbitration should reach its conclusions in accordance with the principles of international law. that each of the Parties should defray its own expenses and one half of the expenses of the Court of Arbitration and of Her Britannic Majesty's Government in relation to the Arbitration.

In this way the United Kingdom did not have any influence on the judgement: the procedure, the legal framework, the judges and the matter in dispute had all been defined by both countries.

Procedure The procedure had four phases:

The Memorials (starting from 1 January 1973) in terms of the delivery of written pleadings, annexes and maps. The Counter-Memorials (starting from 2 June 1974) in terms of the responses. The Replies (starting from 1 June 1975) in terms of comments. The Oral proceedings (starting from 7 November 1975 to 23. October 1976) in terms of oral statements that were made in English or French at the speaker's choice, a simultaneous translation into English being provided in the latter case.

Chile handed over to the Court 14 volumes and 213 maps, and Argentina 12 volumes and 195 maps.

During the first fortnight of March 1976, the Court, accompanied by the Registrar and Liaison Officers from both sides, visited the Beagle Channel region, and inspected the islands and waterways concerned, first on the Chilean Naval Transport Vessel "Aquiles", and then on the Argentine Naval Transport Vessel "ARA Bahia Aguirre".

Arguments In the border treaty of 1855 Chile and Argentina had agreed to retain the borders of the Spanish colonial administration. This principle, known in jurisprudence as Uti possidetis, served two purposes: the first was to divide the territory between the two countries, and the second to preclude the creation of Res nullius areas that could have been taken in possession by other powers (such as the United States of America, the UK or France – although the Beagle Channel had been unknown until 1830 and there had been no Spanish settlements south of Chiloé).

The boundary treaty of 1881 described, without any map, the course of the 5600See Libro de Defensa de Chile Continuidad: historia y geografía km border as follows: over the Andes mountains (from north to parallel 52°S: 'the highest peaks that divide the waters') (Article I), in the region north of and through the Strait of Magellan (mainly along the 52°S parallel) (Article II) and in the Tierra del Fuego-Beagle Channel region (Article III).

The controversial articles II and III of the 1881 treaty were:

Article II) "In the southern part of the continent, and to the north of the Straits of Magellan, the boundary between the two countries shall be a line, which starting from Point Dungeness, shall be prolonged overland as far as Mount Dinero; thence it shall continue westward, following the highest elevations of the chain of hills existing there, until it strikes the height of Mount Aymont. From this point the line shall be prolonged up to the intersection of meridian 70° W., with parallel 52° S. and thence it shall continue westward coinciding with this latter parallel as far as the divortium aquarum of the Andes. The territories lying to the north of said line shall belong to the Argentine Republic, and to Chili those that extend to the south, without prejudice to the provisions of Art. 3d concerning Tierra del Fuego and the adjacent islands".

Article III) "In Tierra del Fuego a line shall be drawn, which starting from the point called Cape Espiritu Santo in parallel 52°40, shall be prolonged to the south along the meridian 68°34 west of Greenwich until it touches Beagle Channel. Tierra del Fuego, divided in this manner, shall be Chilean on the western side and Argentine on the eastern. As for the islands, to the Argentine Republic shall belong Staten Island, the small islands next to it, and the other islands there may be on the Atlantic to the east of Tierra del Fuego and of the eastern coast of Patagonia; and to Chile shall belong all the islands to the south of Beagle Channel up to Cape Horn, and those there may be to the west of Tierra del Fuego".

Under the so-called oceanic principle Argentina believed that the uti possidetis doctrine operated such that, under the arrangements operated by the colonial administrations, Chile (then the Captaincy General of Chile) had no territorial waters in the Atlantic Ocean and the Argentine (then the Viceroyalty of the Río de la Plata) could not have territorial waters in the Pacific Ocean. The Argentine saw a reaffirmation of this principle in the Protocols of 1902, according to Rizzo Romano the first arms control pact in the world,See Rizzo Romano, cited in "Canal de Beagle: El Laudo arbitral de la corona británica" by José Enrique Greño Velasco in Universidad de La Rioja (p. 70) La Convención sobre limitación de armamentos comprende cinco artículos, y tiene el privilegio de ser – de acuerdo a Rizzo Romano — el primer convenio en su tipo ajustado entre naciones. under which both countries agreed that the Chilean navy should have enough ships to defend the interests of Chile in the Pacific, and the Argentine navy should have enough ships to defend the interests of Argentina in the Atlantic. Chile doesn't consider the 1902 protocol as a border treaty and the word Pacific doesn't appear in the Boundary treaty, and hence claimed that the boundary between the Pacific and the Atlantic had never been defined.See interview with Julio Philippi Izquierdo in the Chilean newspaper El Mercurio on 10 January 1978, cited in Argentina y el Laudo Arbitral del Canal Beagle, by German Carrasco, Editorial Jurídica de Chile, p. 48

To resolve the conflicting interests of both countries, they decided in 1881 on an agreement; but nearly a century later there was still no mutual understanding of what that agreement had consisted of. Chile maintained it had only renounced rights to eastern Patagonia (today continental south Argentina) to obtain full possession of the Strait of Magellan, but Argentina believed Chile received the Strait of Magellan in return for renouncing all coasts bordering the Atlantic Ocean.

About the course of the Beagle Channel there were discrepancies. The eastern end of the Channel can be seen as a delta with an east-west arm and a north-south arm (around Navarino Island). The channel specified in the border treaty of 1881 was seen by Chile as the east-west arm, but by Argentina as the north-south arm. Following this controversy, two clauses were in dispute: Chile argued the Channel clause (... to Chile shall belong all the islands to the south of Beagle Channel up to Cape Horn,...), while Argentina the Atlantic clause (... the other islands there may be on the Atlantic to the east of Tierra del Fuego ...). Some Chileans argued that the text "until it touches the Beagle Channel" in article III meant that Argentina had no navigable waters in the Beagle Channel, although this interpretation was not supported by the Chilean claim.

The judgement

A unanimous judgement was handed over to Queen Elizabeth II on 18 April 1977. The French judge André Gros gave a dissenting vote, not concerning the result but the reason. On 2 May 1977 the judgement was announced to the governments of both countries.

It involved the border running approximately along the center of the Channel, and awarded both Chile and Argentina sovereignty over navigable waters in the Channel:

"the Court considers it as amounting to an overriding general principle of law that, in absence of express provision to the contrary, an attribution of territory must ipso facto carry with it the waters appurtenant to the territory attributed" (§107 Report and Decision of the Court of Arbitration).

Whaits Island, the islets called Snipe, Eugenia, Solitario, Hermanos, Gardiner and Reparo, and the bank known as Herradura were awarded to Chile. All of these lie near the southern bank of the Beagle Channel.

Argentina was awarded all islands, islets and rocks near the north coast of the channel: Bridges, Eclaireurs, Gable, Becasses, Martillo and Yunque.

At the eastern end of the channel, the judgement recognized the sovereignty of Chile over the Picton, Nueva and Lennox islands and all their adjacent islets and rocks.

The territorial waters established by these coasts, according to international maritime law, established Chilean rights in the Atlantic Ocean.

The Court sentenced also:See Michel Morris, "The Straits of Magellan", Nijhoff Publishers, 1989, p. 79 the 1881 treaty had given Chile exclusive control of the strait (§ 31) the waters of the strait were likewise Chilean since Chile controls both shores (§37) the Chilean Point Dungenes is on the Atlantic (§24) the 1893 Protocol had not altered the basic nature of the 1881 treaty compromise (§74)

The reasons of the court The court rejected both the uti possidetis principle and the oceanic principle because: «...In the particular case of the 1881 Treaty no useful purpose would be served by attempting to resolve doubts or conflicts regarding the Treaty, merely by referring to the very same principle or doctrine, the uncertain effect of which in the territorial relations between the Parties, had itself caused the Treaty to be entered into, as constituting the only (and intendedly final) means of resolving this uncertainty. To proceed in such a manner would merely be to enter a circulus inextricabilis....»See §21 and §22 of the Report and decision of the Court of Arbitration

The tribunal considered that the exchange of Patagonia for the Strait of Magellan was the transaction behind the 1881 treaty: «...This [Patagonia] was what Chile conceded by giving up a claim that still had enough vitality and content, at least politically, to make its final abandonment of primary importance to Argentina. It is on this basis, as well as on the actual attribution of Patagonian territory to Argentina effected by Article II of the Treaty, that the Court reaches the conclusion that it was the antithesis Patagonia/Magellan, rather than Magellan/Atlantic, which constituted the fundamental element of the Treaty settlement....»See §31 of the Report and decision of the Court of Arbitration