This week’s South Pacific International Arbitration Conference, organised by the Asian Development Bank, Fiji and the United Nations Commission on International Trade Law, heard that private dispute resolution mechanisms were the globally preferred method for resolving cross-border commercial disputes and that countries that chose to remain outside these might face difficulty in attracting trade.

Arbitration panels can make awards enforceable in the 157 countries that have adopted the Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

ADB’s general counsel Christopher Stephens said: “Data and experience from around the world clearly shows that companies engaged in cross-border trade and investment assign a high degree of risk to developing countries with weak or uncertain dispute resolution systems, and that efficient and effective arbitration frameworks increase confidence and encourage cross-border investment and trade.”

But so far only the Cook Islands, Fiji, and the Marshall Islands among Pacific countries have become parties to the convention’s legal infrastructure to help countries take on international arbitration reform.

Bank senior counsel Christina Pak said: “As cross-border trade flows increase, and regional trade agreements offer opportunities for higher economic growth, the need for international arbitration has never been more urgent in the Pacific region.

“International arbitration can also play a critical role in attracting more international climate finance and climate investments into the Pacific region.”