When it comes to solving cross border disputes, many different companies and countries have multiple options available to them. Most people look towards the courts as a way to solve international incidents, but vast differences in laws make the usual court set up almost impossible, that’s why more and more countries look to arbitration as a way to quickly, efficiently and satisfactorily solve minor international shipping disputes. While some countries had working agreements on how these arbitration hearings were to work, it wasn’t until the historic New York Convention, also known as the Convention on the Recognition and Enforcement of Foreign Arbitral Awards in 1958 that mandated a format that was generally agreeable amongst most major counties. Today, this convention has helped lay the groundwork for the resolution of thousands of minor and major international shipping disputes.

Probably the biggest thing standing in the way of this convention working out was the subject of enforceability. One country would agree that a particular form of arbitration should be legally binding around the world but another country would find flaws in the formula or they would perceive that particular style of arbitration as being biased towards one side, one religion or one way of doing business. The titanic challenge that the 1958 convention faced was how to present arbitration as a catch-all that everyone could agree with. After a significant amount of debate that ruled out other alternate forms of dispute resolution, mediation was decided upon and a general format was put into place that, with a few extra bits and pieces added, is still in effect to this very day.

International arbitration also has other advantages over a court system that may or may not favor one country over another. The international arbitration system that was agreed upon at the Convention on the Recognition and Enforcement of Foreign Arbitral Awards in 1958 sought to make arbitration hearings unappealable, so they couldn’t be fought for years in a court-like system that everyone found frustrating. The site where the arbitration hearing is held is almost always (expect for rare examples) on neutral ground so that both sides of the dispute feel comfortable with what is being ruled on.

While the firm nature of international arbitration is one of its biggest selling points, the people who crafted the convention rules also understood the fact that arbitration can’t always be a one size fits all scenario. There are several different kinds of arbitration with different rules in place for different kinds of disputes. Both sides of the dispute must agree on the type of arbitration they are going to have so that the case can move forward. This flexibility has been a huge reason why the arbitration system is still functioning and popular today.

As you can see, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards in 1958 was a major step in opening up world trade. Disputes and conflicts will always happen, the challenge is finding a dispute resolution mechanism that is agreeable to the overwhelming majority of the world and, for now, that has been accomplished.