Law and Society

International commercial arbitration is a means by which disputes arising out of international trade and commerce could be resolved pursuant to the parties' voluntary agreement, through a process other than a court of competent jurisdiction. In other words, the object of arbitration is to obtain a fair resolution of disputes by an impartial tribunal without unnecessary delay or expense; and the parties should be free to agree on how their disputes are resolved, subject only to such safeguards as are necessary in the public interest . It is a consensual means of dispute resolution by non-governmental decision makers and produces a definitive and binding award which is capable of enforcement through national courts .

The recent years have witnessed an increasing spur in the international commercial arbitration and a tendency to incorporation of compulsory standard arbitration clauses in every international commercial contract. The well-known reasons for the popularity of commercial arbitration is that it is predictable, held in private and avoids publicity, flexibility, less formal, cheaper and speedier than national court proceedings. However, single most important reason for this phenomenal increase could be attributed to the rapid expansion of international trade and the free market policies increasingly influenced by non-state actors. The new arrangement formed outside the nation State such as the multilateral economic institutions, the setting up of supranational legal standards and the non-governmental entities led by capital market and multilateral corporations have significantly contributed in promoting arbitration as a means of settling commercial disputes of international character, by passing the test and standards set under the national judicial systems.

In the early years of international commercial arbitration as a alternative means of settlement of trade disputes, there existed an increasing criticism leveled by the developing world against it. Some of the major arguments of the developing world against commercial arbitration were that the practice of arbitration was configured in such a way as to consistently favor the economic interest of the developed world. Secondly, the applicable law under the disputes i.e., the doctrinal configuration of international law is working against the interest of the third world. In short, the developing countries contend that there exists institutional and doctrinal bias in international commercial