International Dispute Resolution and Policy Framework - Coursework Example

International dispute resolution and policy framework Introduction The process of globalization has changed the dynamics of international business. The emerging new economies of the developing world have made the global market more challenging and interesting. With the global competition becoming increasingly stiff, the business houses are becoming less rigid and changing their business and market strategy as per the socio- economic compulsions of the host countries. The inter-dependency of the states in the field of economic cooperation and trade practices has been one of the major factors for globalization. In the fast changing dynamics of the business pattern and emerging new trade practices, arbitration is increasingly becoming crucial to resolve international trade disputes. Are commercial disputes, an intrinsic part of competitive business In the rapid globalization and swiftly transforming equations of international business, the resolution of international commercial disputes has become imperative for the overall goodwill of the global business commitments. Inglehart and Welzel (2009) argue that democratization process is significantly influenced by modernization that is accompanied by socio cultural transition in the long term. It promotes political participation and democratic values within the various socio-political institutions. It has especially become true in the contemporary environment of rapid globalization where businesses are fast expanding across the globe. As such, international commercial activities like sales and manufacturing, franchising, global investments, banking, constructions etc. may result in some sort of disputes that need to be resolved through globally acceptable norms. Hence, international commercial arbitration has truly become a vital tool to resolve international commercial dispute in a more amicable manner. Why alternate dispute resolution? The globalization has given a new perspective to the business which needs to look beyond the local interests and operate business on a wider platform based on common goals and universal value system. Barnett asserts ‘the growing diversity of capitalism is becoming one of its global strengths’ (Great Power, 2009, p409-410). The environmental factors have significantly influenced the formation of a new political equation and intrinsically connected through the new age communication and interdependent market forces. Therefore, the commercial disputes of the global business across countries become crucial for the smooth operations as the legal recourse to resolve them are complex and often time consuming. It is for these reasons that businesses which expand their operations globally like to work within certain norms that are internationally accepted by various state agencies of the world. These forms of alternate dispute resolutions are popular amongst the global businesses as they are quick and efficient in their dispute resolution. The recent years have witnessed huge momentum in the mobility of commercial activities and human resource which have transcended local interests and have embraced global values. The inter-dependency of the states in the field of economic cooperation and trade practices has been one of the major factors for globalization that has also forced the businesses across the globe to seek and exploit emerging business opportunities. The rapid globalization has ushered an unprecedented increase in international trade activities which have, unfortunately, also resulted in an increase of commercial disputes between the business enterprises (Perloff, 1992). Is Doah agenda relevant? Doha round of WTO trade talks have become highly relevant primarily because of the new compulsions that the global business faces due to emerging new dynamics of globalization, threats from terrorism, environmental imperatives and increasing recessive trends in the global economy. Widely known as ‘Doha Development Agenda’, the talks brought also into focus the new environmental paradigms that had become tools of bargaining by the developed nations and means of exploitation of under-developed and developed economies. Doha round of talks was centred on the development issues vis-à-vis international trade agreements that would promote liberalization of global markets, especially in the areas of agriculture, manufacturing and services (OECD). While there is a vast scope of potential in activities which are global in essence, the complex paradigms of trans-national businesses are vital aspects that must be addressed for the smooth running of commercial activities in a foreign land. Is ADR must in global business environment? The inclusion of international commercial arbitration is a very important clause in the contract between the business partners that helps to resolve any prospective or impending commercial dispute that may hinder the business activities. The clause promotes the common acceptable norms and procedures of resolving disputes that are accepted by the global business communities across the world. The international commercial arbitration is an effective mechanism as it has the backing of various state agencies and State governments. The multiple advantages of international arbitration of commercial disputes make it extremely popular amongst the business communities. While providing a neutral platform to settle disputes, the international arbitration is also hugely cost effective measure that tries to settle the issues in as short a time as possible. The tribunal makes efforts to understand the wide ranging issues and takes into account the broader considerations of international relations between the states and the global communities so that each party is given the same deliberation as per the business compulsions to come to a mutually acceptable settlement. Mechanisms of ADR The arbitration clause is an amicable mean of settling commercial disputes between the business enterprises through pre-defined model of mutual agreement. Generally the clause promotes the use of panels of experts or arbitrators, of international repute, who use international trade laws and practices to settle business disputes. The clause also makes provision of international tribunals to resolve disputes as the international business may find the local laws and legal system more biased towards the local agents and business enterprises (Drahozal, 2000). The international tribunals accept the recommendations of the global businesses for arbitrators who are neutral and mutually acceptable. There are various international tribunals like the International Court of Arbitration of the International Chambers of Commerce in Paris, London Court of Arbitration, Permanent Court of Arbitration in Netherland, Kluwer Arbitration etc. which are popular with global business communities for resolving their commercial disputes in a quick and efficient way. Whenever any dispute, related to trade practices between business enterprises, in foreign countries arise, the clause provides a mutually acceptable way of resolving the contentious issue and promotes confidence building amongst the global businesses. Major challenges and recognition in ADR implementation The major challenges of the international commercial arbitrations are the acceptance and enforcement of the arbitral awards within the global enterprises. The international tribunals have experts from the different countries who have long standing record of fair and unbiased judgements in cases, spread across the countries. The international conventions provide platforms for the countries to become proactive participants in creating indigenous and local environment and legal framework that is conducive to global businesses. Indeed, Microsoft case is a significant pointer to international disputes that are spread across nations (Microsoft, 2009). The longstanding competition law issues are vital part of global business and indictment of Microsoft has established fair play in global business. Contract law and trans-national laws in global business The concept of global businesses involve business operations that are not confined to one country or region but their commercial activities are spread across the globe, comprising of different countries that may have to work under different work conditions. Trans-national laws make it difficult for the foreign businesses to operate in a manner that they think is viable. The law of contract, held under trans-national law becomes an extremely costly venture for the foreign businesses and they are also often seen as stumbling blocks for creating conducive business environment of global business. The absence of appropriate legal support during the dispute resolutions has been recognized as the most difficult obstacle to the global business community. The translational laws are prone to be biased and therefore, the contractual clause is always preferred to be drawn under the auspices of international arbitration. Linkages in global businesses The global business community is case sensitive and relies heavily on the wide scope of the contract and the minute details that provide the global partners, equal opportunity to become gainer. The commercial disputes are common occurrences that become vitally important in the increasing global business environment and the cutting edge business rivalry. In such a scenario, the businesses prefer to incorporate contractual laws and clause for the international arbitration in case of commercial disputes. The global businesses are intrinsic part of development and there is imperative need to acknowledge that the new business paradigms require new business strategy and universally accepted business values. The cross country business activities necessitate international arbitration in commercial dispute resolution. International arbitration becomes truly international when it promotes and uses international laws to resolve disputes. Role of WTO in international dispute resolution WTO intervention in the cases have brought respite to the developing nations but the increasing trend of the developed nations to impose trade embargo with countries that advertently or inadvertently violate some environmental clause is adversely impacting global trade. The cases brought to WTO by Brazil and Venezuela against US’ Clean Air Act of government’s standard for gasoline are a point in case of exploiting developing nations. The countries contested that standard applied to gasoline exported by them were more stringent than the standards for their domestic refineries. They won the case (WTO). Conclusion The interpretation of the factors in terms of one’s unique representation of the cause and consequences of the issues in commercial disputes, are the major considerations that make it national or international. Hence the mere fact that the businesses may have their origins in different countries is irrelevant in wider context of the issues of the commercial disputes. The application of the international arbitration clause in the resolution of the commercial disputes between the business partners, is but a means to promote neutral platform and internationally acceptable values. Reference Barnett, Thomas P M.(2009). Great Powers: America and the World After Bush. New York: Putnam. Drahozal. (2000). Commercial Laws, Commercial Code and International Commercial Arbitration Vanderbilt Journal of Transnational Laws. Vol 33, 2000. Inglehart Ronald and Christian Welzel., 2009. How Development Leads to Democracy? What We Know About Modernization. Foreign Affairs 88.2, 33-48. Microsoft’s decision on European commission. Available from: < http://www.microsoft.com/Presspass/press/2009/dec09/12-16Statement.mspx> [Accessed on 24 June, 2010]. OECD. The Doha Development Round of trade negotiations: understanding the issues. Available from: [Accessed on 24 June, 2010]. Perloff. (1992). The Ties that Bind: The Limits of Autonomy and Uniformity in International Commercial Arbitration. University of Pennsylvania Journal of International Business law, vol.13, 1992. World Trade Organization. Available from: [Accessed on 24 June, 2010]. Read More