Settlement of commercial disputes by arbitration is expanding by leaps and bounds. Arbitration is practically the only solution in international disputes.
An arbitral award is enforceable at present in 157 countries, which is an unmaching benefit of arbitration. No judgment made by a court of any State will enjoy this privilege. Arbitration paves way for a procedure of dispute settlement which the parties determine and is acceptable to the parties. This is again an unmatching privilege of arbitrating international disputes, which is not available in the case of settlement of disputes by court.
International commerce, travel and collaboration and trade by internet have expanded in the last two or three decades in a way that one would not have imaged before that. With such an expansion, the system of administration of justice, and thus the trade to which the the system is a core component, will practically breakdown without an alternative dispute resolution (ADR) mechanism in particular arbitration.
Vast expansion of global trade has also embedded in it competition like it was never before. This has lead to anti-competitive laws worldwide in the last decade or more. The importance of competition is that traders compete not only in price but also in quality and innovation. Competition is at the heart of the world development that we are seeing today. All that we are enjoying today would not have been possible without competition in particular competition by international trade. Arbitration is at centre of international trade.
Although there are a few ADR mechanisms other than arbitration, such as mediation, conciliation, etc., the only authoritative ADR mechanism is arbitration in the sense that it, once empowered by agreement of parties, can pass a binding and final decision on the dispute between the parties, enforceable worldwide by mandatory registration as judgment of court. Admiralty, largely by nature, is inherently international. Needless to say the importance of arbitration when talking about admiralty disputes. Hence, arbitration, the way forward.