An important objective of the Commonwealth is to foster increased trade and sustainable economic growth and development across the Commonwealth member countries. While global business drives economic growth and development, all business transactions give rise to the risk of disputes. The uncertainty surrounding the management of the dispute resolution risk has been identified as a trade barrier, in particular for small and medium-sized enterprises (SMEs) which prefer to avoid taking the risk of cross-border trade. A neutral, time and cost-efficient, and enforceable dispute resolution regime is also key to attracting foreign direct investment. International commercial arbitration is one of the dispute resolution mechanisms available for cross-border trade. Amongst other advantages, international commercial arbitration allows disputing parties the freedom to choose neutral arbitrators, international enforceability of the resulting arbitral awards, granted by the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and also confidentiality.
A meeting of senior officials of Commonwealth Law Ministries in October 2018 commissioned a study to examine the socio-economic benefits of international commercial arbitration and broadly survey the contemporary landscape of commercial arbitration across all Commonwealth member countries. The terms of reference for this study were to assess the state of international commercial arbitration in each Commonwealth jurisdiction, identify issues that may be holding back the use of international commercial arbitration as a dispute resolution mechanism by local businesses, and to find possible solutions to these issues while recognizing the importance of diversity and the needs of small developing Commonwealth countries. The study was led by Dr Petra Butler, Professor, Victoria University of Wellington and Director, Institute of Small and Micro States (ISMS), and Dharshini Prasad, Senior Associate, Wilmer Cutler Pickering Hale and Dorr LLP.
The study recognizes numerous challenges in the widespread use of international commercial arbitration, such as the need to build capacity, keeping costs down, and increasing businesses’ understanding, but it also makes several recommendations that could help overcome these and achieve the goal of driving intra-Commonwealth trade upwards.
For the complete report of the study, see here.
For additional information about the study see here.