Expanding Business Opportunities Through International Commercial Arbitration

International Commercial Arbitration

International commercial arbitration has proven to be an effective system for commercial dispute resolution. It is fast, designed to be transparent, and built on a solid foundation. The characteristics on which the system is built have also proven to encourage business opportunities globally.

With more people embracing international commercial arbitration, investors have become more confident in expanding their business and pushing the world into having more employment opportunities for its teeming populations. This piece will consider the areas where the effects of international commercial arbitration on business opportunities expansion have been evident.

International Commercial Arbitration a Driving Force for Foreign Investments Attractions

The most significant form of creating business opportunities is through foreign investments, and from all indications in the legal space, the international arbitration mechanism creates confidence among investors. Checking the 195 legally recognized states globally currently, those with arbitration as a form of dispute mechanism enjoy the most investment attractions.

international commercial arbitration
Also, an analytical look shows that countries with the friendliest arbitration mechanism enjoy twice as many investments from foreign bodies as their counterparts who practice conservative arbitration.

The importance of international commercial arbitration in the Business space is extremely significant, and this draws the importance of why states must allow international commercial arbitration to stand. During the early periods after the Cold War, international commercial arbitration was extremely prevalent in Central and Eastern Europe, leading to a surge of investments in the region.

Most economic disputes were handled by top institutions like the SCC and VIAC. In the years following, other regions that embraced arbitration also attracted foreign investments as much as the CEE because of the rise in investors’ confidence.

Generally, what all states seek to achieve is investor trust and confidence. Foreign investors usually consider the assurance of getting and keeping their profit, having their organizations and investment protected and enjoying the right to seek damages against a country that causes it any financial damage due to a change of policies. International commercial arbitration is the only system that ensures all of these rights are respected.

A rise in foreign investors’ confidence translates to business opportunities that could be of significant economic importance to the host state. This is why the friendliest states enjoy the highest GDP globally. Many countries have continued to push their international commercial arbitration system as effective and independent of any sentiments. Fortunately, the consequences of a government going back on its own policies and arbitration system can be extremely drastic and leave it desolate of any economic driving investment.

International Commercial Arbitration Creates More Confidence between Foreign Companies

International commercial arbitration is important not only between a State and a Foreign Company. The mechanism has also created a powerful trust system that allows foreign companies to work together in harmony and create businesses that serve as very good business opportunities. Many sources of employment come from international collaboration, which is achieved through contracts often based on international arbitration clauses.

Companies prefer international commercial arbitration as opposed to using the legal system because the former is far more efficient, fast and just as effective as the general legal system. Also, most foreign companies prefer international arbitration because it offers neutrality that cannot be guaranteed in a law court.

Arbitration and Dispute Resolution

In arbitration, the disputing parties have the right to choose their preferred seats, the number of arbitrators to oversee the dispute, the type of arbitration, and even the time to hold the hearing. Companies are given a chance to control their own destiny and only need to wait for the presiding arbitrator to issue an award that is often not challenged.

This high level of transparency and neutrality gives companies the option to pursue advanced business opportunities with high confidence.

In recent years, almost all companies that have entered contractual collaboration usually employ an international arbitration clause as the dispute resolution mechanism for any unforeseen grievances.

Conclusion

The effect of international commercial arbitration in expanding the business sphere of most nations and, subsequently, the entire globe has been apparent to both supporters and critics. The reality is that Foreign investors and transacting companies feel more at ease with an arbitral clause than with a promise based on litigation. Of course, the courts also play a very impactful role in enforcing arbitral awards, which highlights that both systems work hand in hand.

As an investor wanting to break the bounds and enjoy a better contractual relationship with a state or foreign company, a well drafted international arbitral clause is often very important as it plays a massive role in ensuring you get the needed justice. Rättsakuten is one of the best firms to get expert arbitrators with unrivaled experience in drafting favorable contracts that give their clients the edge. You can reach the company for all your inquiries and professional counsel.

About Rättsakuten

Rättsakuten is a leading law firm focused on Commercial Arbitration and Dispute Resolution. Based in Sweden, Rättsakuten handles dispute resolution and Arbitration matters before the SCC (Swedish Chamber of Commerce), ICC, HKIAC and several other Arbitration tribunals.


Fredrik Jörgensen

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