Originally from Dispute Resolution Journal

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Since disputes in the foreign trade are inevitable, as they are on the domestic level, it is of great concern to merchants of different countries to know whether they can provide for arbitration in their contractual arrangements. Arbitration, a speedy and impartial way to solve trade disputes while maintaining amicable relations between the parties, thus serves the interests of the worldwide business community.

One of the central problems of the 1958 United Nations Conference on International Commercial Arbitration was to define the conditions under which the competent authorities of the country where the recognition and enforcement of an arbitral award is sought may refuse to grant such a request. Progress in this field of arbitration in foreign trade has been hampered by the differences in the law of various countries. Some countries in the Far East are parties to the 1923 Geneva Protocol on Arbitration Clauses and to the 1927 Geneva Convention on the Enforcement of Foreign Arbitral Awards (Burma, Ceylon, India, Indonesia, Pakistan and Thailand). The enforcement of foreign arbitral awards is also dealt with in bilateral treaties of Friendship, Commerce and Navigation of Iran, Japan, Vietnam and Korea with the United States. As between parties to such arrangements, the differences of their laws may have partly been settled. Unfortunately, however, to the present time, it may frequently occur that the countries of the parties to an arbitration contract are not commonly bound by a treaty or a convention.