Strengthening Institutional Capacity for Effective Arbitration in Developing Economies

Abstract

There is a global paradigm shift towards arbitration to resolve disputes. To resolve commercial 
disputes, promote foreign investment, and foster economic growth in any developing economy, 
there is a crucial need for effective and efficient arbitration. However, developing economies face 
unique challenges in establishing robust arbitration frameworks, ranging from weak institutional 
capacity to inadequate legislation and limited expertise. The developing economies often also lack 
specialized arbitrations relying on inadequate court systems. All these challenges weaken the 
potential of arbitration. This paper examines the challenges facing arbitration institutions in 
developing economies and proposes methods and strategies for strengthening the institutional 
capacity to ensure arbitration effectiveness and efficiency. This paper highlights the importance of 
institutional capacity in arbitration institutions and as well demonstrates that effective arbitration 
institutions enhance investors' confidence, promote economic growth, and reduce disputes. This 
paper adopts doctrinal methodology in data collection, and in so doing, looks at relevant statutory 
provisions and case laws, including the world of refined authors as well as articles, online sources, 
and paper presentations. Key recommendations that can enhance dispute resolution, attract foreign 
investment, and contribute to sustainable economic growth are made and the findings made will 
have significant implications for policymakers, arbitration institutions, practitioners, and 
investors.