International Commercial Arbitration


International Commercial Arbitration is the dispute resolution technique most commonly used to resolve private commercial disputes because it is fast, flexible and broadly applicable. Nevertheless, businesses prefer to invest in countries with strong markets, political stability and legal certainty. Without these three conditions, investors lack confidence that contractual arbitration clauses will result in an award that is legally enforceable, if one of the parties to a dispute does not voluntarily comply with an arbitral decision.

Not only must the arbitration agreement be recognized, the domestic legal system must have mechanisms so that the judiciary can respond to requests for preliminary injunctions and other precautionary measures to preserve assets against which a successful claimant will be able to recover any damages awarded. The ability to enforce an arbitral decision and to do so through an expeditious process are key in any risk assessments undertaken by prospective investors.

At the OAS, international commercial arbitration and recognition of arbitral decisions has been a longstanding consideration. Member States have adopted two conventions on the subject: the Inter-American Convention on International Commercial Arbitration (Panama Convention), signed in Panama City on January 30, 1975; and, the Inter-American Convention on Extraterritorial Validity of Foreign Judgments and Arbitral Awards (Montevideo Convention), signed in the city of Montevideo on May 8, 1979.

Although a number of States in the Americas have made progress in creating an attractive business climate, some continue to face roadblocks. These challenges can be overcome through the adoption of legislation that ensures the respect of international law in the recognition and enforcement of cross-border arbitral awards and that strengthens the judicial system.