International Dispute Resolution: Arbitration, Problems and Solutions

This essay delves into the critical issues within international dispute resolution, with a specific focus on international commercial arbitration. It identifies the rise of arbitration as a preferred method for resolving disputes due to its efficiency and flexibility compared to traditional court systems. The essay examines the features of international commercial arbitration, including its reliance on party autonomy, confidentiality, and the selection of expert arbitrators. It also highlights the current state of arbitration, emphasizing its increasing popularity among corporations and the role of various international arbitration institutions such as the ICC, AAA, and LCIA. Furthermore, the essay addresses the challenges and crises facing international commercial arbitration, such as difficulties in enforcing awards and the influence of state legislatures. It concludes by suggesting the establishment of a standard International Arbitration Court of Appeals and Enforcement to improve the efficiency and predictability of dispute resolution, ultimately promoting international trade and investment. The essay also acknowledges the use of arbitration in the context of international trade and commerce.

3. Identify a key problem or issue in the area of international dispute resolution. How is
this issue being addressed by courts or international bodies? What, in your opinion, should
be done in the future?
In the last few decades, there have been some significant changes in the world and many of them
were totally unexpected. For example, there was rapid breakup of Soviet bloc and the centralized
economic planning was rejected. Similarly, there was willingness among the United States and
its allies to impose national boundaries with the help of sophisticated and overwhelming military
power. There was ever increasing economic connectedness that was the result of rapid
communications, and transfers in currency and travel. The business world became smaller,
interconnected, and there was a desire present to achieve growth and profits. Human desires and
consumer epithets in all parts of the world require that the economy should produce, distribute
and sell.1 As a result, there was a rapid rise in commercial transactions, there were more
contracts, more negotiations and increased business obligations.2 The result was that there were
more disputes to be resolved, including international disputes.
Most of the business disputes, national or international can be resolved through the phone. In
some cases, there may be a need for a face-to-face meeting, however, negotiations remained the
main method to resolve disputes. In this regard there are some intractable controversies.3 In order
to deal with these issues, the alternative dispute resolution gained much popularity. Under these
1 Acuff, FrankL. (2008), How to Negotiate Anything With Anyone Anywhere Around the World (3rd edn), Chicago:
AMACOM.
2 Berman, Paul Schiff (2007), 'Global Legal Pluralism', Southern California Law Review, 80, pp. 1155-237.
3 Busch, M. and Reinhardt, E. (2000), 'Bargaining in the Shadow of the Law: Early Settlement in GATT/WTO Disputes',
Fordham International Law Journal, 24, pp. 158-72

circumstances, international arbitration is the prime method to resolve disputes that may arise
between states, corporations and individuals in nearly every aspect of international trade and
commerce.4 It has been stated in this regard that in view of the widespread significance of
international arbitration in the present world where commercial life requires that there should be
quick and timely activity, it appears that international arbitration is becoming popular and a large
number of businesses are relying on it. At the same time, the concept of arbitration is also very
simple. In this case, the parties to dispute arrive at the agreement that they are going to submit
their dispute that may arise in the course of trade or commerce to the person and the expertise of
such person is trusted by both the parties. Therefore in such a case, both the parties put forward
the case along with sufficient evidence for the purpose of supporting the claim to such private
individual known as the arbitrator. The arbitrator then considers all the evidence and the
arguments made by the parties and beaches at a decision. This decision is binding for the parties
to the dispute. The decision has to be treated as binding and final, because the parties themselves
have consented to it instead of any coercive or binding power of the state. In this way,
international arbitration can be described as the prime method to resolve disputes mainly arising
in case of international commercial agreements and international disputes. It can also be stated
that arbitration has proved to be an efficient way to achieve a final decision. That is binding for
the parties without taking recourse to the courts of law or using legal formalities.5 As a result of
the rising popularity of arbitration and the need for having such effective dispute resolution
device, a large number of lawyers and accountants have also established exclusive groups of
arbitration experts.6 In the same way, many states have also started modernizing their legislations
to deal with the imperfections present in the traditional court system. The defining characteristic
4 Fisher, Roger, Kopelman, Elizabeth and Schneider, Andrea Kupfer (1994), Beyond Machiavelli: Tools for Coping with
Conflict, Cambridge, MA: Harvard University Press.
5 Franck, Susan (2007), 'Empirically Evaluating Claims about Investment Arbitration', North Carolina Law Review, 86, pp. 1-88
6 Friedman, Thomas (2005), The World is Flat: A Brief History of the 21st Century, New York: Farrar, Straus & Giroux.

of arbitration is that while it is different from judicial processes at the same time, it also results in
the resolution of disputes among the parties. Arbitration does not follow the technical, lengthy
and expensive process.7 That is used in case of litigation, but it provides an efficient and flexible
means to resolve the disputes between the parties.8 Generally the arbitrators are the persons who
have technical expertise in the particular area of dispute and they are respected by the parties to
this for such expertise.
Features of international commercial arbitration: The popularity of international commercial
arbitration is constantly rising in the form of dynamic dispute resolution process. As a result of
the distinct character of arbitration, while interacting with domestic law whenever and wherever
needed, the process of arbitration operates on a distinct sphere, where the will of the parties and
the rules provided by non-national institutions and international treaties regulate the whole
process. In this way, it can be said that in case of international arbitration, there is a mix of
comparative law as well as the private international law. This allows the expansion of the
horizon of arbitration beyond the aspects of domestic law, and it also succeeds in by passing the
lengthy procedures, as well as the attitudes of national courts.9
As compared to the general judgments of the national courts, the arbitration awards can be
enforced easily. Another significant feature that is present in case of international arbitration is
that an option is available to the parties to the dispute to select a New Jersey instead of
submitting the dispute to the jurisdiction of the national law of the parties. Similarly, the
procedure that is adopted in case of arbitration is much less complex as compared to the formal
7 Ginsburg, Tom and Shaffer, Gregory (2010), 'How Does International Law Work?', in Peter Cane and Herbert M. Kritzer (eds),
The Oxford Handbook of Empirical Legal Research, Oxford: Oxford University Press
8 Gadlin, Howard (1994 ), 'Conflict Resolution, Cultural Differences and the Culture of Racism', Negotiation Journal, 10, pp. 49-
68
9 Gadlin, Howard and Pino, Elizabeth Walsh (1997), 'Neutrality: A Guide for the Organizational Ombudsperson', Negotiation
Journal, 13, pp. 17-37

court proceedings. In this case, the parties are free to decide and design the process of arbitration.
Another significant advantage that is available in case of arbitration is that of confidentiality.
Hence, it becomes easier for the parties to resolve the dispute that the parties come from diverse
legal backgrounds like the civil law or common law jurisdictions.10 The parties themselves select
the arbitrators, who have significant experience in their opinion, regarding the subject matter of
the dispute and are also familiar with the national laws and the business rules that apply in a
particular case. Similarly, the cost of litigation is also cheaper in case of arbitration as compared
to the standard court fees. Moreover, the parties can agree regarding the fees and also regarding
various other procedural aspects.
The present state of international commercial arbitration: questions have always been raised
regarding the condemnation related with the effectiveness of international commercial arbitration
as compared to the traditional court system. However, the present business world that wants to
save time, the arbitration process has become more appealing for its ability to produce their
results and also its cost-cutting abilities. At the same time, the commercial arbitration is also
favored for the flexibility it provides in appointing a neutral person who has specific expertise
and knowledge regarding the subject matter in dispute as compared to the traditional court
practices in which it takes a long time to arrive at a decision regarding a particular commercial
oriented issue.11
Although the process of arbitration has become the main method to settle international disputes
outside the courts, but still needs legislative interventions as the assistance of the courts in order
10 Graham, John L. and Requejo, William Hernandez (2008), Global Negotiation: The New Rules, New York: Palgrave
Macmillan
11 Gunning, Isabelle (1995), 'Diversity Issues in Mediation: Controlling Negative Cultural Myths', Journal of Dispute Resolution,
pp. 55-93

to achieve smooth functioning.12 However, it has been noted that a large number of corporations
are giving preference to using the process of arbitration in order to resolve their disputes. In the
same day, a large number of corporate counsels are also satisfied with the process of
international arbitration. The rising popularity of the process of international arbitration can also
be seen from the empirical data provided by the largest international arbitration bodies. Under
these circumstances, it can be clearly stated that commercial business has started to use the
process of arbitration not only due to the enduring advantages provided by it but also due to the
speedy and quick results delivered by arbitration. Another reason is that in case of arbitration the
dispute ends early due to which a lot of money is saved by the parties to the dispute. In this
regard there are two types of arbitration in which the ad hoc arbitration allows the agreement to
specify the selection of the rules, the appointment and the powers of the arbitrators. On the other
hand, the UNCITRAL model of arbitration is selected for the flexibility it provides. The law that
is based on this model provides significance to the autonomy of the parties, the severability of
the arbitration clause and also the competence of arbitration tribunal. In the same way, the other
noteworthy international arbitration institutions are also doing good. The rules and procedures
that are followed by such institutions provide coherence along with some stance and proceedure
to the process of arbitration.13 These institutions also protect the distinct features of arbitration
and they also adapt to the recent technological trends and other rising needs. The major
institutions in this context are the International Chamber of Commerce, Paris; London Court of
International Arbitration, London; American Arbitration Association, New York, Swiss
Arbitration Association and Kuala Lumpur Regional Center for Arbitration.
12 Hayner, Priscilla (2002), Unspeakable Truths: Transitional Justice and the Challenge of Truth Commissions, New York and
London: Routledge
13 Huntington, Samuel ( 1994), 'The Clash of Civilizations?', in Armand Clesse, Richard Cooper and Yoshikazu Sakamoto (eds),
The International System after the Collapse of the East-West Order, Dordrecht: Martinus NijhoffPublishers

However, the premier institution related with arbitration at present is the International Chamber
of Commerce (ICC). This institution is not a court of law, but it can be described as the
administrative body of arbitrations taking place in ICC. The American Arbitration Association is
also not a typical institution or the center to promote arbitration or for conducting arbitration
proceedings. This institution is acting as a nonprofit organization. The Swiss Arbitration
Association has remained the host of arbitration proceedings in Switzerland taking place in
accordance with the ICC rules. Similarly, the Kuala Lumpur Regional Center of Arbitration was
established in 1978. It is supported by the government of Malaysia, but it is not an agency of the
government. It can be described as a consultative organization that provides a forum to settle
disputes by using the process of arbitration in context of trade, commerce and investment.
The crisis in international commercial arbitration: it is not doubted that often. International
commercial arbitration is used for settling disputes of the court, but it also needs to be noted that
there are certain difficulties in challenging and enforcing the awards of international commercial
arbitration along with the rising influence of state legislatures and courts. The legislation's that
have been imposed in this regard, result in creating difficulties in the enforcement of awards.
These awards are refused to be enforced on account of the reason that they are against public
policy. Hence, a lack of condemnation exists between the courts and legislation and this is a
major concern for enforcing the arbitration awards in a foreign state.14
However in the end, it can be stated that with the rising significance and the positive outlook
towards international commercial arbitration as a process of resolving disputes, it is required that
the concerns of the users of international arbitration should be addressed where large amounts of
assets and money are involved. As these days, most of the international corporations are using
14 Jackson, Vicki C. (2010), Constitutional Engagement in a Transnational Era, Oxford and New York: Oxford University
Press

international arbitration; the increase in number of these awards can be predicted. However, the
concerns of the users in this regard and are not limited to those mentioned above. By establishing
a standard International Arbitration Court of Appeals and Enforcement, through a convention of
the United Nations that is acceded to by the States would make sure that the commercial disputes
are resolved by neutral specialists, in private and in a way that can be expected as being more
predictable, efficient and less costly as compared to the present practice of international
commercial arbitration. In this regard, it can also be suggested that the presence of a global
commercial arbitration system will also result in promoting international trade and investment as
it will reduce the risk that any potential commercial dispute will be decided by the home-court of
the counter-party.

Bibliography
Acuff, FrankL. (2008), How to Negotiate Anything With Anyone Anywhere Around the World
(3rd edn), Chicago: AMACOM.
Berman, Paul Schiff (2007), 'Global Legal Pluralism', Southern California Law Review, 80, pp.
1155-237.
Busch, M. and Reinhardt, E. (2000), 'Bargaining in the Shadow of the Law: Early Settlement in
GATT/WTO Disputes', Fordham International Law Journal, 24, pp. 158-72
Fisher, Roger, Kopelman, Elizabeth and Schneider, Andrea Kupfer (1994), Beyond Machiavelli:
Tools for Coping with Conflict, Cambridge, MA: Harvard University Press.
Franck, Susan (2007), 'Empirically Evaluating Claims about Investment Arbitration', North
Carolina Law Review, 86, pp. 1-88
Friedman, Thomas (2005), The World is Flat: A Brief History of the 21st Century, New York:
Farrar, Straus & Giroux.
Gadlin, Howard (1994 ), 'Conflict Resolution, Cultural Differences and the Culture of Racism',
Negotiation Journal, 10, pp. 49-68.
Gadlin, Howard and Pino, Elizabeth Walsh (1997), 'Neutrality: A Guide for the Organizational
Ombudsperson', Negotiation Journal, 13, pp. 17-37
Ginsburg, Tom and Shaffer, Gregory (2010), 'How Does International Law Work?', in Peter
Cane and Herbert M. Kritzer (eds), The Oxford Handbook of Empirical Legal Research, Oxford:
Oxford University Press.
Graham, John L. and Requejo, William Hernandez (2008), Global Negotiation: The New Rules,
New York: Palgrave Macmillan.

Gunning, Isabelle (1995), 'Diversity Issues in Mediation: Controlling Negative Cultural Myths',
Journal of Dispute Resolution, pp. 55-93
Hayner, Priscilla (2002), Unspeakable Truths: Transitional Justice and the Challenge of Truth
Commissions, New York and London: Routledge.
Huntington, Samuel ( 1994), 'The Clash of Civilizations?', in Armand Clesse, Richard Cooper
and Yoshikazu Sakamoto (eds), The International System after the Collapse of the East-West
Order, Dordrecht: Martinus NijhoffPublishers
Jackson, Vicki C. (2010), Constitutional Engagement in a Transnational Era, Oxford and New
York: Oxford University Press.