Originally from AAA/ICDR Handbook on International Arbitration Practice

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The globalization of the world market has made business dealings with foreign companies numerous and commonplace. As business grows between domestic and foreign companies, disputes are inevitable. Disagreements are as much a part of life as agreements. In the international business context however, they need fast, efficient and effective settlement. Litigation of disputes in the public forum of a court can be costly, lengthy and bitter, and may end in such animosity that it destroys existing business relationships. In addition, the complexity of international litigation lacks the predictability that businesses desire. Furthermore, differences in procedural and substantive law between national courts may cause unfairness to one of the parties.1 

Commercial arbitration is generally regarded as a desirable means of resolving disputes arising out of international-trade transactions. Arbitration is speedier, more efficient and more economical than litigation, and arbitrators can be selected according to their special skills or knowledge of the subject matter in dispute. Moreover, arbitral proceedings are confidential and are not open to public scrutiny. Effective international arbitration is dependent on the parties’ success in enforcing arbitral awards.2 The majority of arbitral awards are satisfied through the voluntary compliance of the parties involved, but on some occasions a party must invoke external authority to enforce a losing