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The World Court, or more accurately, the Permanent Court of International Justice, was formed in 1922 after the establishment of the League of Nations. The primary role of the court was to arbitrate international disputes and to promote world peace. During its 24-year history, the court heard 29 cases and delivered 27 opinions. Closely tied to the League of Nations, the court dissolved in 1946 when the league disbanded and was replaced by the United Nations.

The history of international arbitration and the eventual establishment of the World Court can be traced back to ancient times. From a more modern American perspective, international arbitration took place in 1794 between the United States and England, with the Jay Treaty that established the settlement boundaries of the Revolutionary War. Although it should be noted that the negotiations did not involve a third party, the proceedings were modeled after court rules and utilized the application of law. There are a number of similar actions that took place in the United States and in Europe, though historians have credited Americans with the invention of international arbitration.

Between 1899 and 1907, several international disputes and concerns over war and armament buildup resulted in the foundation of the Permanent International Court of Justice. In 1899, Czar Nicholas II of Russia organized the First Hague Conference to reduce armament buildups with other rival nations and helped create the first permanent world court, known as the Permanent Court of Arbitration. In 1907, after successfully mediating the 1905 Russo-Japanese War, President Theodore Roosevelt organized the Second Hague Peace Conference. Both these conferences established a new model for arbitrating international disputes. Up to that time, such arbitration lacked a basic arbitral procedure. Thus, these conferences helped to flesh out a physical body made up of a governing tribunal and established its jurisdiction and foundation on the application of international law, though they never succeeded in promoting compulsory arbitration among nations until the formation of the World Court.

The Permanent Court of Arbitration was neither a court nor was it permanent. It consisted of a panel of arbitrators nominated by the member countries. An elaborate code was established covering a wide range of processes for potential settlement, but the arbitration settlement was not binding, which limited the body's effectiveness. Despite these flaws, the Hague conferences established the foundation for bilateral arbitration treaties and established procedural mechanisms.

Before the outbreak of World War I, the Permanent Court of Arbitration concluded 120 general arbitration treaties and heard more than 50 disputes. While the court had some success in arbitrating some of the disputes, it failed to prevent further international disputes, and some of their decisions reinforced the national hostilities that led to World War II. Part of the problem stemmed from the absence of a central international administration. The establishment of the League of Nations after the peace treaties of 1919 provided the administrative arm through the League of Nations Council and Secretariat that was needed to support an international court. The League Covenant adopted the principle of obligatory arbitration or settlement, which mandated states to submit to arbitration any disputes that could result in military conflict. The covenant defined the general types of disputes that were appropriate for arbitration, including treaty interpretation, questions of international law, facts documenting any breach, and the extent and nature of any reparations. The original covenant did not include the formation of a permanent court of international justice but mandated that the Council formulate a plan to create such a court. After the First Assembly of the League, the members passed the statute to organize a court, and in January 1922, the Permanent Court of International Justice was established as an organization separate from the League of Nations but interconnected with it.

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