ifferences which may arise of a legal nature or relating to the
interpretation of treaties existing between the two contracting
parties and which it may not have been possible to settle by
diplomacy, shall be referred to the Permanent Court of Arbitration
established at the Hague by the Convention of the 29th of July
1899, provided, nevertheless, that they do not affect the vital
interests, the independence, or the honour of the two contracting
States, _and do not concern the interests of third parties_."

Since this stipulation exempts from obligatory arbitration such
differences between the contracting parties as concern the interests of
third parties, the question requires an answer whether in the
controversial interpretation of the Hay-Pauncefote Treaty other States
than Great Britain and the United States are interested. The term
_interest_ is, however, a very wide one and so vague that it is very
difficult to decide this question. Does "interest" mean "rights"? Or
does it mean "advantages"? If it means "advantages," there is no doubt
that in the Panama Canal conflict the interests of third parties are
concerned, for the free use of the Canal by their vessels on terms of
entire equality is secured to them by the Hay-Pauncefote Treaty. On the
other hand, if "interests" means "rights," it can hardly be said that
the interests of third parties are concerned in the dispute, for the
Hay-Pauncefote Treaty is one to which only Great Britain and the United
States are contracting parties, and according to the principle _pacta
tertiis nec nocent nec prosunt_ no rights can accrue to third
parties from a treaty. Great Britain has the right to demand from the
United States, which owns and controls the Canal, that she shall keep
the Canal open for the use of the vessels of all nations on terms of
entire equality, but other States have no right to make the same claim.
The case will be different when the Canal has been opened, and has been
in use for such length of time as to call into existence--under the
influence and working of the Hay-Pauncefote Treaty--a customary rule of
International Law according to which the Canal is permanently
neutralised and open to vessels of all nations, or when all maritime
States, through formal accession to the Hay-Pauncefote Treaty, have
entered into it with all rights and duties of the two contracting
parties. So long as neither of these events has taken place Great
B