The Permanent Court of Arbitration (PCA) was established following the first Hague Peace Conference, initiated by Tsar Nicholas II of Russia in 1899. The conference brought together representatives from various nations to discuss measures for preventing war and promoting peaceful resolutions to conflicts. The decree ratified by the Senate of the Netherlands resulted in a court designed to facilitate arbitration between states. Located at The Hague, a city that has become synonymous with international diplomacy, the PCA was one of the first institutional efforts in international law to provide a formal mechanism for arbitration.

Upon its creation, the PCA provided a framework for countries to resolve disputes without resorting to military action. This was particularly significant given the geopolitical tensions of the era, as European powers were often engaged in colonial expansion and faced rising nationalistic sentiments. The court established procedures for arbitration and an international registry of arbitrators. Notably, it allowed for state-to-state dispute resolution as well as the involvement of private parties, making it a versatile instrument in international law.

The PCA has since played a crucial role in numerous high-profile arbitration cases and has been significant in setting precedents in international law. It continues to operate today, embodying the principles of peaceful conflict resolution and diplomacy, essential in a world that still grapples with conflicts between nations.