Document Type : scientific research paper
Authors
1
PhD Student in International Trade and Investment Law, Shahid Beheshti University.
2
Professor of International Trade and Investment Law, Faculty of Law, Shahid Beheshti University.
Abstract
International arbitration, as one of the key methods for resolving commercial and investment disputes, has long attracted significant attention. Its fundamental advantages such as flexibility, greater speed, confidentiality, and the possibility of selecting specialized arbitrators have made it an appealing option. However, over time, especially with the increasing complexity and evolving nature of disputes and the growing involvement of states, rules and procedures have developed in ways that have somewhat diminished some of arbitration’s key advantages. This evolution has brought the international arbitration system despite its established status face-to-face with structural and functional challenges that call into question its effectiveness and legitimacy, particularly in disputes involving states and public interests. This paper adopts an analytical-comparative and critical perspective to identify and examine several major challenges in the development of international commercial and investment arbitration, particularly in disputes involving a state, while reflecting on the ongoing reform efforts and proposals. Specifically, it addresses issues such as rising arbitration costs, prolonged proceedings, limited access to qualified arbitrators, disparities in parties’ capabilities, lack of transparency, absence of binding precedent, and difficulties in obtaining and presenting evidence as key shortcomings of arbitration. On the other hand, the paper demonstrates how new rules and procedural innovations have sought to restore previously diminished advantages or to prevent their further erosion. Drawing on practical experience, comparative analysis of rules, and theoretical discussions, the authors offer reform proposals aimed at improving the structure of arbitration in international commercial and investment disputes and enhancing both public and professional trust in the system. The paper concludes that the sustainable development of arbitration requires the continuous reform of processes, procedures, and regulations, grounded in past experiences. It presents concrete suggestions for addressing the aforementioned challenges to ensure the continued effectiveness and legitimacy of arbitration as a dispute resolution method in major international commercial and investment contexts. This research emphasizes the need for ongoing reconsideration of international arbitration frameworks, especially to preserve its desirability and utility in complex commercial and investment disputes.
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