Background and Importance

International Commercial Arbitration is the resolution technique most commonly used to resolve private commercial disputes, due to its flexibility, rapidity, and broad scope.


International commercial arbitration, and the cross-border recognition of arbitral decisions, has long been a subject of consideration between the Member States. In 1975 and 1979 they adopted two conventions in this area, the Inter-American Convention on International Commercial Arbitration (Panama Convention), and the Inter-American Convention on the Extraterritorial Validity of Foreign Judgments and Arbitral Awards (Montevideo Convention).


Among its functions, the DIL promotes and performs activities aimed at unifying and harmonizing Member States’ legislation in areas impacted by public and private international law. Through this project, the DIL is encouraging regional economic integration through the strengthening of international commercial arbitration’s legal framework.


Various countries in the Americas have advanced substantially in creating a business climate attractive to investors and international trade. This success must be attributed, at least in part, to legislative reforms in the area of arbitration, particularly in the enforceability of foreign decisions.

Nevertheless, some countries continue to face roadblocks to establishing themselves as appealing markets for international investment. These challenges can be overcome through the adoption of legislation that ensures the respect of international law on cross-border arbitral decision enforcement and strengthen their judicial systems, so as to firmly guarantee the application of international commercial arbitration norms within their territories.


International Commercial Arbitration is highly relevant to business and trade, because investors prefer to put capital into countries with high political stability, legal certainty, and strong markets. Without these three conditions, investors lack assurance that contractual arbitration clauses will lead to nationally enforceable resolutions of any disputes that may arise in the course of business supported by internationally accepted legal norms and principles.


When one party to a dispute does not voluntarily comply with an arbitral decision, the success of international arbitration as a dispute resolution mechanism depends on local courts’ correct application of legal principles to enforce it. This means that a country’s legal system must:
recognized the arbitration agreement, respond adequately to requests for preliminary injunctions and other precautionary measures to protect enforceability, in an avenue that ensure that successful claimant will actually recover the damages awarded it.

Overall, the ability to enforce an arbitral judgment, and to do so through an expeditious process, are key aspects in any investor’s risk assessments as he decides where he will invest capital, and in what amount.