As a method of settling disputes by amicable means, arbitration is a legal alternative for the resolution of civil or commercial disputes outside the courts in which the parties to a dispute refer it to one or more arbitrators by whose decision they agree to be bound. As was said by the ancient Greek philosopher Aristotle, “an arbitrator goes by the equity of a case, a judge by the strict law.”
The flexibility and speed of the arbitration process is claimed to be a major reason why many businesses select arbitration over litigation. The parties to the arbitration choose the applicable law, whether procedural or substantive, especially if the parties to the conflict are foreign states, multinational organisations, or parties from different countries. Arbitration also allows the parties to choose their arbitrators, who may be experts in certain fields, since arbitration does not require the arbitrator to have a certificate of law as is the case for the judiciary.
The United Nations Commission on International Trade Law (UNCITRAL), the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958), the European Convention on International Commercial Arbitration (Geneva, 1961), and the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States (1965) have together drafted many of the most important rules of international arbitration.
The International Court of Arbitration, the world’s leading arbitration institution founded under the supervision of the International Chamber of Commerce (ICC) in 1923, has long played a key role in solving difficulties that arise in international commerce and business to support trade and investment. The court’s decisions are internationally recognised by more than 120 countries.
The London Court of International Arbitration (LCIA) is another leading international institution for commercial dispute resolution, and it is referred to in many international contracts in the event of any dispute arising between the parties. Other international arbitration institutions have also gained credibility all over the world.
Today, we are pleased to welcome the establishment of the Arab Union of Arbitration for Investment and Economic Disputes after considerable efforts made for many years by its founders and by the Council of Arab Economic Unity, part of the Arab League.
The Arab Union’s headquarters will be in Egypt, and its establishment will be followed by the establishment of the first Arab Court of Arbitration whose main function will be solving disputes that may arise between businessmen, Arab and foreign investors, and institutions and companies from different countries, in accordance with international legal norms. The Arab Union’s establishment is one of the most important steps taken by experienced arbitrators, lawyers and experts to resolve long-standing disputes outside the courts to support trade and investment in the Arab world.
In view of the complexity of investment contracts, especially large investments with strategic impacts, and because of the multiplicity of partners, there may be conflicts that require the handling of disputes in a way that balances the interests of the parties. It should be noted that investments help the host country build an advanced economy through the investor’s capital and technical expertise that can create the appropriate atmosphere for opening up to global markets, increasing the exports of the country and creating jobs for its citizens.
Therefore, and until the investment achieves its objectives, it is necessary to provide a healthy investment environment that encourages investors by providing legal and economic guarantees that can ensure a balance between the parties to the investment.
The establishment of an Arab Union of Arbitration for Investment and Economic Disputes and an Arab Court of Arbitration at a critical moment when investors may feel suspicious about pumping funds into an environment that may not be suitable for them is one of the most important legal and economic guarantees a country can provide to its investors.
Perhaps one day the Arab Court of Arbitration will be one of the leading international arbitration institutions trusted by multinational companies and Arab and foreign investors alike.
*This article was first published in Al-Ahram Weekly