Commonwealth countries urged not to lose foreign investment and trade
This is one of the key messages from a major study on international commercial arbitration in the Commonwealth which has been published.
A primary objective of the Commonwealth is to boost trade among member nations while fostering sustainable economic growth and development.
However, a significant source of economic growth remains untapped due to the majority of small to medium-sized enterprises (SMEs) not expanding into international markets.
One of the barriers to cross-border trade is uncertainty over dispute resolution, so an effective system is seen as essential to encouraging SMEs to do business in other countries.
International commercial arbitration is one tool available to companies, and is already popular in certain sectors such as commodities and maritime.
Its advantages include being neutral, efficient and enforceable.
A system offering these benefits is also seen as an important provision for countries looking to attract foreign investors.
The study identifies 10 challenges hindering the use of international commercial arbitration as a dispute resolution mechanism.
One of these challenges is that more than half of Commonwealth countries do not have a structure that reflects modern best practice, with a small number not having a legislative framework for arbitration at all.
Other obstacles include costs, regulatory issues and a lack of understanding, expertise and diversity.
The study sets out seven solutions, including calls to action for countries to become party to the New York Convention on foreign arbitral awards and to adopt a modern arbitration law based on the UNCITRAL (United Nations Commission on International Trade Law) model law.
The New York Convention provides the framework for the enforcement of arbitration agreements and is regarded as the most important international instrument for the practice and development of international commercial arbitration. Thirty per cent of Commonwealth countries are not members of the New York Convention.
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20-08-2020 PANORAMAdailyGIBRALTAR
