Evolution of Arbitration and It’s Impact

Arbitration has played a decisive role in the growth of globalization by providing a means to resolve and mitigate issues between parties from two different states. Before the advent of Arbitration, there was no efficient forum for conflict resolution between a state and private parties of another nationality. They either had to raise their issues in the courts of the host state, i.e., the State where the investment was made. If the domestic courts fail to provide a remedy to the violations complained of, the foreign investor or private parties could ask their State to file a claim in diplomatic protection against the host state, which is extremely inefficient for various reasons discussed later. Also, such negotiations have a history of turning hostile and also cause politicization of the issue. Such an impotent procedure was not effective nor feasible in the future, especially in a world of ever-increasing globalization and foreign investment. Therefore, it is necessary to explore the history of Arbitration and how it evolved into its modern counterpart to understand the impact it has had on the globalization of the world and how it helped shape the world.