Core Legal Answer & Context: Both arbitration and judicial settlement are third-party dispute resolution mechanisms in international law, leading to binding decisions. They differ primarily in their institutional structure, flexibility, and the degree of party control.

1. Arbitration:

   • Nature: Involves a tribunal (arbitrators) chosen by the disputing parties for a specific case.
   • Control: Parties have significant control over the composition of the tribunal, the applicable law, and the procedural rules.
   • Flexibility: Generally more flexible, confidential, and often quicker.
   • Decision: The decision (award) is binding but typically does not create general legal precedent.

2. Judicial Settlement:

   • Nature: Involves a permanent international court (e.g., ICJ, ITLOS) with pre-established rules of procedure and a fixed bench of judges.
   • Control: Parties have less control over the court's composition or procedure.
   • Flexibility: Less flexible, more formal, and often public.
   • Decision: The decision (judgment) is binding and often contributes significantly to the development of international jurisprudence and legal precedent.

Relevant Statutes and Sections:

1. Hague Conventions for the Pacific Settlement of International Disputes (1899, 1907): Laid the groundwork for international arbitration.
2. Statute of the International Court of Justice (ICJ): Governs the functioning of the principal judicial organ of the UN.
3. UNCLOS, Part XV: Provides for dispute settlement mechanisms, including arbitration and judicial settlement (e.g., ITLOS).

Important Landmark Cases:

1. Alabama Claims Arbitration (1872): A seminal case demonstrating the effectiveness of international arbitration between the US and UK.
2. Nicaragua v. United States (ICJ, 1986): A prominent example of judicial settlement before the ICJ, highlighting the court's role in interpreting international law and its contribution to jurisprudence.

Clear Conclusion: While both methods provide binding resolutions, arbitration offers greater party control, flexibility, and confidentiality, making it suitable for specific, often technical disputes. Judicial settlement, through permanent courts, provides greater consistency, contributes to legal precedent, and is often preferred for disputes involving fundamental questions of international law.