Identify the Dispute Resolution Mechanisms/Bodies in International Business

Regent’s Business School
International Law
2012.3.2_INB470.R_T1

Report topic: Identify the dispute resolution mechanisms/bodies in international business, and show how their rules and principles have contributed to promoting/stabilising international business.

Student: Ruslan Aymalov
(s00604939)

Tutor: Majeks Walker

Word count: 2977 Date: 15st December 2012

Nowadays the international commercial arbitration is demanded because it delivers advantages neutral in political and procedural sense of body for settlement of dispute. The arbitration is registered as a universal method of permission of the international economic disputes. Its value thoroughly raised just during the period when international trade started developing.
Any country without addiction is interested in development of arbitral proceeding. It is necessary to notice that it is defined by numerous advantages of the arbitration court which are rather in detail described in special literature which is devoted to arbitration legal proceedings, and are approved in jurisdictional practice of many states.
It is expedient to note that among conventional pluses of the developed system of arbitration legal proceedings, that fact that load of the state courts is essentially diminished takes not the last place, and also at the expense of a smaller formalism in procedures process of permission of collisions that is extremely important for a commercial turn is accelerated.
The increase in popularity of the international commercial arbitration is connected with considerable benefits and advantages, which in the similar way of consideration and settlement of disputes gives to the parties of the external economic transactions.
Let 's note that speech mainly goes about much more active role of the parties in the procedure of arbitration legal proceedings:
a) the parties have the right to appoint arbitrators, thereby submitting dispute to persons who, according to the parties, are most competent in the field;
b) the absolute number of standards of the national legal systems regulating arbitration, has the dispositive character allowing the parties to replace rules containing in its norms of arbitration.

Objectivity of process of internationalization of modern world economy causes of the newest level of multilateral economic relationship, namely the strengthened basis of infrastructures, which provide dynamic and forward development of the market.
It is expedient to note that at the moment the world economy the increasing part wins lines of a uniform organism outside which cannot any state with market economy is ordinary to work.
The governments of the various states accept different criteria for regulation of international trade and functioning of foreign firms in the market of own countries.
Expediency of state regulation of foreign economic activity is identified in the economic concept and certified by practice of managing of industrially developed and latest industrial states. State regulation of foreign trade activities is extensively used in the world. It plays a role of system of measures of the legislative, executive and supervising character in circumstances of a market economy, requested to improve foreign trade activities in interest of national economy. The real measures are implemented competent public institutions and public organizations.
Function of state regulation, mainly, finds development of concepts of foreign trade activities. The strategy is a joint plan of production of the external economic sphere of action, connecting finding of the purposes of development, tasks, the directions of achievement of results and effectiveness of the specified sphere. Development of the doctrine includes attribute of the external economic policy for the present period of development taking into account characteristic conditions of internal development, and also the international economic environment.
Internal and external circumstances are always defined in two ways to the external economic policy: freedom of trade and protectionism. It is necessary to notice that the freedom of trade is freedom at decision-making on problems of foreign trade in businessmen in the state, and unlimited access on the national markets of foreign goods. It is necessary to notice that the protectionism defines state intervention in external economic, as well in foreign trade activity, an embodiment in life of various restrictions of rather foreign goods for support of national production. Always and in all states approach data at the same time exist, their ratio, prevalence of one or others is unequal only that too is caused by internal and external circumstances.

In present conditions the external economic policy is the organization of actions of the government oriented on the most favorable formation of scientific and technical, economic, production and other relations with the foreign states, deepening and expansion of participation of the state in world trade for the solution of strategic problems of its social and economic development.
The external economic policy will settle foreign trade, the currency and credit relations, foreign investments, transfer of the last technologies and labor migration. The organization of the external economic policy is affected by multinational corporations, associations of representatives of the capital (national associations of industrialists, branch associations of businessmen), small and medium business, trade boards and other public associations.
In industrially developed states the state regulation machinery connecting the directions, the purposes, the principles, tasks, organizational structures was created. It is expedient to note that the present external economic policy is implemented by means of a number of the ways supervising and stimulating foreign trade.
State regulation of foreign economic activity has at the order a certain specifics in comparison with regulation of other spheres of national economy. It is necessary to notice that the true specifics are defined by need of any country to be conformed with the international norms and the principles of world trade. Each country at regulation of foreign economic activity for its development, growth of efficiency of economy, execution of own national interests should not infringe upon interests of other states and has to work within those rules which are created by the international organizations (GATT, UNCTAD, the WTO, the World customs Organization, etc.).
It is expedient to note that limits of the state regulation of foreign trade activities are caused, on the one hand, by need of expansion of national export and formation of forms of the international cooperation, and with another - installations of the international organizations.
It is necessary to notice that it is not so simple as the subject of regulation of foreign trade activities finds:
• implementation of various organizational measures for consolidation of positions of national exporters in the world markets;
• stimulation of national exporters;
• assistance to increase in foreign capital investments by national firms.

In addition, all countries apply various techniques of restriction of actions of competitors of own national firms, in particular preventing to their penetration on domestic market, more rigid contracts to their functioning, the ban, the increased ecological requirements, etc.
It is expedient to note that paramount problems of state regulation of foreign trade activities – formation of legislative base, the basis of favorable economic and organizational circumstances for development of all types and the foreign trade activities forms and increase in its efficiency. It is necessary to notice that function of control of the state behind execution by subjects of foreign trade activities of current laws, ensuring national security at the same time increases.
State regulation of foreign trade activities contains its currency, financial, credit, ensuring export control, customs and tariff and non-tariff regulation; policy establishment in the sphere of certification of goods in connection with their import and export. These directions of regulation are based on the current legislation.
One of the central functions of the state is development of the concept of foreign economic activity and the external economic policy on the basis of which cooperation with other countries is based. It is necessary to notice that for many years in Russia the state monopoly of foreign trade when the choice of the partner countries was defined, mainly, by political and ideological interests dominated. Transition to market economy designated recognition in foreign trade activity of equivalence of an exchange, need to consider competitive advantages of the Russian Federation, to subject to the analysis a condition of the external economic complex, to develop strategy of development of foreign trade activities.
The purpose of state regulation finds creation of the legal, economic and organizational situations providing productive foreign economic activity at all its levels. It is expedient to note that at this stage the state most likely has to organize conditions of realization of the strategic objective established in the Federal development program of export: "improvement of structure of the Russian export, understood as long evolutionary process of increase in efficiency and export activity by means of expansion of the range and improvement of quality of exported production, improvement of commodity and geographical structure of export, application of progressive forms of international trade and economic cooperation". Implementation of the real purpose requires the solution of a complex of tasks not only in the external economic sphere, but also in foreign policy, in the legislation, the management organization, training, etc.

State regulation of foreign trade activities in all states is oriented on providing, first of all, homeland economic security under which, security of economy from internal and external adverse factors which break normal functioning of process of internal reproduction is realized, reduce a standard of living, causing adverse social effects.
The regulating role of the state will be carried out by means of use of economic and administrative ways.
It is necessary to notice that among various parameters of an assessment of appeal of any national market far not the trailer role is played by problems of legal regulation of an order of settlement of disputes.
The right of the request for protection of the violated subjective civil right is enshrined and in international agreements. So, for example:
1 . According to the Agreement on an order of settlement of disputes which is connected with implementation of economic activity (The agreement of the CIS 1992), managing subjects of any state - the participant of the CIS have on hand in the territory of other states - participants of the CIS the right freely to address in courts, the arbitration courts, arbitration (economic) tribunals and other bodies which competence includes permission of affairs, they have the right to raise petitions, to act in vessels, to make claims and to carry out other legal proceedings.
2 . in compliance with the Convention on permission an arbitration way of citizen -legal disputes which follow from the relations of economic and scientific and technical cooperation (The Moscow convention of 1972), all disputes between the economic organizations which follow from contractual and other civil relations which arise between them in the course of economic and scientific and technical cooperation of the countries - participants of the present Convention, are subject to consideration in an arbitration order with an exception of jurisdiction of such disputes to the state vessels.

3 . According to the European convention on the foreign trade arbitration (The convention on the foreign trade arbitration of 1961) the parties of the arbitration agreement has the right at own discretion:
a) to provide transfer of disputes on the sanction of standing arbitral authority; in this case consideration of disputes will be developed in compliance with regulations of similar body;
b) to provide transfer of disputes on permission of arbitration on the provided business (ad hoc arbitration) and in the real case, for example: to appoint arbitrators or to establish ways of their appointment in case of any dispute; to define location of arbitration tribunal; to find rules of procedure which arbitrators are obliged to adhere.
Really, centuries-old practice of all advanced countries convincingly proves that achievement of high rates of economic growth becomes possible only in the presence of the effective judicial system which is actively helping progress of relations of production. It is expedient to note that at disabled, inefficient and inadequate to objective requirements of market economy to judicial system all attempts of the governments to achieve notable economic progress are ineffectual.

The desire of the contractor of the external economic transaction to avoid consideration of the case in court of a foreign state and consequently, and to minimize influence of the above-mentioned negative moments arising at consideration of the case in court of a foreign state, and promoted search of new, economic, effective and simple methods of settlement of the conflicts. It is necessary to notice that alternative ways of settlement of disputes belong to such additional ways of settlement of disputes in foreign economic activity (further - FEA).
FEA represent an additional guarantee to subjects in realization of a constitutional law on a choice of the most adequate option of settlement of dispute or settlement of the conflict to the purpose of protection of the rights and legitimate interests and achievement of the necessary procedural purpose.
It is important to emphasize that the arguing parties usually address to FEA in the following cases:
1) when they mutually seek to settle dispute by peaceful manner;
2) when they want to define the legal status in dispute as by its consideration both the parties, and the intermediary arguments and their assessment often put forward each other allows the parties to define the strong and weak moments to make the decision - to agree that the international commercial arbitration is the institute opposite to institute of the state vessels which represent bodies of judicial system of any state.
The special place in system of FEA is taken by the international commercial arbitration. Universal recognition of the international commercial arbitration as the best alternative of settlement of disputes promoted that within at least eighty last years in the field of the international relations different activity is carried out, aiming to create favorable conditions for use of an arbitration way of settlement of disputes. It is necessary to notice that the beginning was necessary to this process by creation and functioning of International Chamber of Commerce in Paris at the beginning of the XX century.

It is expedient to note that evolution of the international commercial arbitration always depended and will depend on influence of three forces of a various origin, namely:
1) the initial impulse, proceeding that it is possible to call community of businessmen. This impulse is shown in the requirements which are developing and being multiplied in parallel with evolution and expansion of trade;
2) impulse from the certain states and community of the states. This impulse is shown as the answer to need of streamlining of institute of commercial arbitration;
3) the impulse, proceeding that it is possible to call community of lawyers (and in particular that part of this community which specializes on arbitration problems).
It is necessary to notice that as notes the River Ronkalya, all these three forces considerably influence arbitration development, considerably supplementing each other.
The term "international commercial arbitration" designates three interconnected concepts, reflecting various aspects of the uniform social phenomenon.
First, the international commercial arbitration is understood as a certain mechanism of settlement of disputes between businessmen of the various states, set of means and ways by means of which the collision in material legal relations is eliminated.
Secondly, this term means establishment which is created for consideration and the settlement of disputes, following from the international commercial relations. In this case it is a question of the concrete arbitration establishments created at national Chambers of Commerce and Industry, associations, the exchanges, etc.
Thirdly, the international commercial arbitration is a structure of the arbitration court, the certain arbitral panel, considering concrete civil dispute.
According to the legislation on judicial system the international commercial arbitration is not an element of the state system, i.e. it is the supranational body isolated from precepts of law and control from the state. Actually it means that the state allows to carry out to foreign subjects in the territory arbitration proceeding, and completely protected from any intervention from the national authorities which are carrying out justice

Nevertheless it represents a peculiar legal institute which gains originality as a result of features of formation of rules and specifics of the settlement of disputes, carried out by non-state bodies.

The positions stated in science how activity of the international commercial arbitration and jurisdiction correspond, it is possible to divide into three groups:
1) activities of the international commercial arbitration for consideration and permission of civil cases are not jurisdictional. Within this approach the various directions in understanding of nature of the activity which is carried out by arbitration were created;
2) the arbitration according to the contents represents quasijurisdictional body and is amateur body of the interested participants of economic disputes;
3) activity of the international commercial arbitration is jurisdictional, i.e. arbitration is included into jurisdictional system of the state as these bodies resolve disputes about the right.

Conclusion
It is necessary to notice that the international commercial arbitration is established for the sanction of special category of disputes, differently the disputes having commercial character, i.e. the following from the civil transactions comprising "a foreign element".
Speaking about prospects of the international commercial arbitration as M. M. Boguslavsky fairly notes, first of all it is necessary to pay attention that successful development of the international commercial arbitration in the Russian Federation depends on a complex both objective, and the subjective factors which have both international, and internal character and closely adjoining. Besides, it is impossible to underestimate that circumstance that the International commercial arbitration tribunal exists not separately as its activity is inseparably linked with the solution of the general tasks on improvement of the Russian legal system.

Bibliography

1 . "Baker and Mackenzie": International commercial arbitration. States of the Central and Eastern Europe and CIS: Uchebn. - практ. grant / Otv. edition. A.Tynel, V. Hvaley. M: BEK, 2001.
2 . Boguslavsky M. M. Communication of the arbitration courts with the state vessels//International commercial arbitration: modern problems and decisions: Сб. the Art. to the 75 anniversary of the International commercial arbitration tribunal at Chamber of Commerce and Industry of the Russian Federation / Under the editorship of. A.S.Komarova. M: Statute, 2007.
3 . Kurochkin S. A. Arbitration of civil cases in the Russian Federation: theory and practice. M: Volters Kluver, 2007.
4 . Nikolyukin S. V. Arbitration agreements and competence of the international commercial arbitration (some problems of the theory and practice): Dis. ... edging. юрид. sciences. M, 2007.
5 . Nosyreva E.I. Alternative settlement of disputes in the USA. M: Prod. house "Gorodets", 2005.
6 . River Ronkalya. Some reflections of rather future international commercial arbitration//International commercial arbitration: modern problems and decisions: Сб. the Art. to the 75 anniversary of the International commercial arbitration tribunal at Chamber of Commerce and Industry of the Russian Federation / Under the editorship of. A.S.Komaro-va. M: Statute, 2007.
7 . O.Yu.Treteyskoye razbiratelstvo 's starlings of enterprise disputes in Russia: problems, tendencies, prospects. M: Volters Kluver, 2005.

Bibliography: 1 . "Baker and Mackenzie": International commercial arbitration. States of the Central and Eastern Europe and CIS: Uchebn. - практ. grant / Otv. edition. A.Tynel, V. Hvaley. M: BEK, 2001. 2 . Boguslavsky M. M. Communication of the arbitration courts with the state vessels//International commercial arbitration: modern problems and decisions: Сб. the Art. to the 75 anniversary of the International commercial arbitration tribunal at Chamber of Commerce and Industry of the Russian Federation / Under the editorship of. A.S.Komarova. M: Statute, 2007. 3 . Kurochkin S. A. Arbitration of civil cases in the Russian Federation: theory and practice. M: Volters Kluver, 2007. 4 . Nikolyukin S. V. Arbitration agreements and competence of the international commercial arbitration (some problems of the theory and practice): Dis. ... edging. юрид. sciences. M, 2007. 5 . Nosyreva E.I. Alternative settlement of disputes in the USA. M: Prod. house "Gorodets", 2005. 6 . River Ronkalya. Some reflections of rather future international commercial arbitration//International commercial arbitration: modern problems and decisions: Сб. the Art. to the 75 anniversary of the International commercial arbitration tribunal at Chamber of Commerce and Industry of the Russian Federation / Under the editorship of. A.S.Komaro-va. M: Statute, 2007. 7 . O.Yu.Treteyskoye razbiratelstvo 's starlings of enterprise disputes in Russia: problems, tendencies, prospects. M: Volters Kluver, 2005.