Commercial Arbitration and its Impact on Developing Countries

Mahameed, Suad (2025) Commercial Arbitration and its Impact on Developing Countries. JOURNAL OF UNIVERSITY STUDIES FOR INCLUSIVE RESEARCH (USRIJ) مجلة الدراسات الجامعية للبحوث الشاملة, 7 (38). pp. 156401-156427. ISSN 2707-7675

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Abstract

International commercial arbitration is a modern legal concept that allows parties involved in a commercial contractual relationship to resolve disputes outside the ordinary judicial system. This research aims to analyze the impact of international commercial arbitration on developing countries, in particular to study the challenges faced by these countries and the economic effects of repeated losses in arbitration cases. The article adopts an analytical and descriptive approach, as it investigates how arbitration can encourage investment in developing countries while exploring the obstacles that hinder its success. The main findings highlight that developing countries often lose arbitration cases due to corruption, insufficient experience in international arbitration, and inadequate contract negotiation practices. The research is based on the experience of Egypt as a case study, revealing that poor drafting of contracts, limited legal knowledge, and corruption contribute significantly to financial losses in arbitration cases. The study recommends that developing countries strengthen legal expertise through specialized training, establish ad hoc arbitration committees to review contracts, and strengthen legislative frameworks to better align them with international arbitration standards. It is also advisable to apply diplomatic dispute settlement mechanisms before resorting to arbitration to minimize financial risks and protect national economic interests.

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