Managing disputes in an evolving business landscape

GLOBAL trade has increased exponentially in recent decades, as commercial transactions have grown in number, value and sophistication. Tracking this growth, businesses have seen an increase in the volume, size and complexity of their cross-border disputes, and dispute resolution mechanisms have had to adapt to keep pace with the change.

Traditionally, all disputes were settled by court litigation, but domestic litigation was ill-fitted to international disputes: domestic courts were presided over by national judges; only had jurisdiction within their borders; and passed judgments that were not easily enforceable in other states.

International arbitration emerged to fill this gap, allowing parties to appoint a neutral tribunal of one or three persons, often with specific industry expertise, and with the sole or presiding arbitrator usually of a different nationality to the parties. Arbitration procedures are flexible and can be adapted to suit the dispute and the parties. Following the entry into force of the New York Convention of 1958, which has now been ratified by over 170 state parties, international arbitration awards can be enforced with relative ease in most countries worldwide. Arbitration quickly became the preferred dispute resolution mechanism in international contracts, and chambers of commerce worldwide began to offer arbitration services to assist the businesses they support.