THE ROLE OF INTERNATIONAL ARBITRATION IN THE DEVELOPMENT OF TRANSITION COUNTRIES: BALTIC STATES AND CIS COUNTRIES AS EXAMPLE

Abstract

The article examines the development of international commercial arbitration in countries with economies in transition, focusing on its role within the dispute resolution system, the legislative framework, and future development prospects. It analyzes international commercial arbitration through the lens of local institutions as a potential avenue for growth in these economies. Key issues addressed include the legality of drafting arbitration clauses, the enforcement of arbitration awards, and the application of the New York Convention in various contexts. The challenges surrounding judicial and arbitration proceedings are particularly complex. Kazakhstan, like many other states, is actively reforming its legal regulation of the economic sector. A strong judicial system is essential for economic development, entry into foreign markets, and attracting investment. For many years, international arbitration has served as an effective and convenient means for entrepreneurs to resolve foreign economic disputes. The existence and operation of international arbitration within a country is a positive indicator for the market. Statistics suggest that an effective and competitive legal framework for international arbitration, along with new tools such as in-depth analysis and remote formats, not only attracts local market participants but may also position the country as a regional center for international arbitration. Countries with developing economies have been proactively modifying their judicial systems. In the Baltic states, for instance, reforms have been multi-tiered, leading to the elimination of state economic courts. A major attraction for individuals from various countries to submit disputes to arbitration is the flexibility of the arbitration process. However, the distinctions between arbitration and judicial proceedings extend beyond procedural differences; they also pertain to the merits of the parties' cases. In international arbitration, the law applicable to the merits is determined by provisions that differ from standard statutory conflict of law rules. Depending on the arbitration law of the jurisdiction, the statute of private international law may be encapsulated in a single provision: “in the absence of a choice by the parties, the arbitral tribunal will apply the rules of law it deems appropriate.”