Arbitration of international commercial and investment disputes: are the misgivings of developing states justifield?
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This thesis is concerned with the attitude of countries of the developing world to international commercial arbitration. It argues that their perception of arbitration in international trade is that the process does not favour them. In an attempt to explain that perception it identifies several possible reasons, ranging from the character of arbitration as a means of settling disputes, to the judicial treatment of awards in which the states have been involved. The treatment of the subject is structured to correspond largely with the three separate stages of the arbitration process. Chapters one and two address the legal character of arbitration and its underlying philosophy. The reservations of many developing countries are explained in terms of the differences in the understanding of the nature and purpose of arbitration between, on the one hand, the countries concerned and, on the other hand, the western systems on which the international model is based. Chapter three addresses the conduct of arbitration proceedings under the International Centre for the Settlement of Investment Disputes (ICSID) and the Mukilateral Investment Guarantee Agency (MIGA) as examples of institutions created specificafly with the arbitration of commercial disputes involving developing states in mind. The chapter argues that both institutions are one-sided, thus contributing to the misgivings of the countries concerned. Chapter four deals with the problem of the proper law of state contracts as recently evolved by arbitration tribunals. It notes that there has been a shift from traditional principles of conflict of laws, resulting in the isolation of the transactions from the only systems of law with which they ordinarily would have the closest connection. It points out that the trend is guided by policy not principle. It criticises the trend on that and other grounds. Chapter five deals with the enforcement of awards. We point out in that chapter that little at that stage of the process suggests a trend unfavourable to developing countries.
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