Dispute Resolution Mechanisms in International Trade Law: A Comparative Analysis

Abstract

The rapid globalization of markets and the increasing complexity of cross-border transactions have made dispute resolution a cornerstone of international trade law. Conflicts often arise due to differences in legal systems, contractual obligations, enforcement mechanisms, and interpretations of international agreements. This study provides a comparative analysis of dispute resolution mechanisms in international trade law, focusing on both institutional and ad hoc approaches. The research explores mechanisms such as the World Trade Organization (WTO) Dispute Settlement Body, international arbitration under institutions like the International Chamber of Commerce (ICC) and the London Court of International Arbitration (LCIA), as well as mediation and negotiation as alternative methods. The study highlights that while the WTO system provides a rules-based, state-to-state mechanism with binding outcomes, international arbitration offers greater flexibility, confidentiality, and enforceability under frameworks such as the New York Convention of 1958. Mediation and conciliation, though less formal, serve as cost-effective and time-efficient options, particularly when preserving long-term commercial relationships is essential. A comparative perspective reveals that each mechanism carries unique advantages and limitations: WTO mechanisms are comprehensive but often lengthy, arbitration is adaptable but costly, and mediation lacks enforceability despite its efficiency treaty obligations, and institutional rules, this research demonstrates that no single dispute resolution system can universally address the dynamic needs of global trade. Instead, a hybrid and context-driven approach is emerging, where parties combine arbitration with mediation (arb-med-arb) or rely on multilateral frameworks in tandem with domestic enforcement mechanisms including the United Nations Commission on International Trade Law (UNCITRAL) initiatives, to bridge jurisdictional differences and enhance predictability in international trade disputes comparative analysis emphasizes the necessity for businesses, governments, and policymakers to strategically select dispute resolution mechanisms based on the nature of trade relationships, sectoral requirements, and enforcement priorities international trade law can better balance efficiency, fairness, and justice in a rapidly evolving global economy.