Advantages And Disadvantages Of International Commercial Arbitration

Decent Essays

5.1 Critical Analysis
International commercial arbitration has evolved, primarily, against the background of two unifying international traditions: the private international legal tradition, directed at the harmonization of laws; and the public international law tradition, committed to reducing global barriers to trade. International Commercial arbitration is the most widely used tool for resolution of trade or commercial disputes. The effort should be made to tackle the problems which will benefit commercial transaction activities. Most of the domestic courts were very slow in dealing with Arbitration cases. Therefore, parties now resort to Arbitration in order to avoid lengthy and complex litigation procedure.
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America, Europe and India, all have incorporated the provisions of these conventions in their domestic laws. However, due to difference in Domestic laws or state laws, the problem of enforcement of awards still persists in all these jurisdictions. However, to maintain the balance, in each case it may depend upon the law of jurisdiction, facts of the case and also the adjudicators. Keeping up with the UNCITRAL Model Law, International Jurists are strictly against judicial interference in an arbitral agreements. The parties to the dispute should look at the advantages as well as disadvantages of the arbitration and other dispute resolution methods, and choose the one to adopt in a particular case. In present world, a properly enforced award should be respected. It should be final and binding and the parties should abide by it. There should not be any problems in rendering and enforcing an award in other …show more content…

A practical solution to avoid this issue is to include an Immunity Waiver Clause in the arbitration agreement. States are generally not comfortable with this clause; however, this puts an obligation on the state to not use this as a defence during enforcement of awards. Once any State agrees to arbitration, it is an assumed principle that the State has waived its Sovereign Immunity. Under International Conventions like New York Convention, if the state enters into an agreement, it is treated as if the State has waived its Immunity and can be taken up as strong evidence against the State. The situation is difficult as “national courts (dealing with enforcement of awards) refuse to build up special rules and regulations for the enforcement of arbitral awards and they are guided by the principles applicable in judicial proceedings”. Therefore it is probable on some occasions for litigants to conquer the hindrance that are present while enforcing an award against

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