The governments of Croatia and Slovenia agreed that the court president will be Gilbert Guillaume of France, while the other two members will be Bruno Simma of Germany and Vaughan Lowe of Great Britain.

"It is very encouraging that we managed to reach an agreement so quickly on such a delicate issue," Milanovic told reporters, adding that intensive diplomatic consultations had been held prior to the agreement.

The European Commission today sent to Croatia and Slovenia a list of potential arbiters to decide on the two countries' border dispute, from which they chose the chair of the arbitral tribunal and two judges.

"Bilateral talks have proven to be important and this government will continue to nurture such talks. Croatia and Slovenia made the first important step in the establishment of international arbitration," Pusic said.

Under the arbitration deal, the two countries' border should be determined by five arbitration judges. The two countries each appoints one and the remaining three judges are appointed by bilateral agreement from the list provided by the European Commission.

Croatia proposed Budislav Vukas and Slovenia proposed Jernej Sekolec as their arbiters.