'Commercial Peacemaking' - The New Role of the International Commercial Arbitration Legal Order

Abstract

International commercial arbitration (ICA) is increasingly viewed as an autonomous legal order, distinct from any specific national legal system. Building on this conception of ICA, this paper assigns a new "commercial peacemaking" role to it, concerned with the resolution of commercial disputes between parties from rival states through tailor-made local ICA institutions or processes. This proposed new role is rooted in two interrelated rationales. The first rationale is that the absence of effective mechanisms for the resolution of these disputes constitutes an informal trade barrier, and that devising such mechanisms would remove this barrier and facilitate trade between members of rival states. The second rationale is that such increased trade would in turn promote political cooperation at the interstate level and contribute to resolving broader conflicts and advancing peace. This new role of the ICA legal order is currently being tested, albeit in different ways, by two pairs of rival states: Israel and Palestine, and North and South Korea. The Jerusalem Arbitration Center, designed specifically for the resolution of cross-border commercial disputes between Israeli and Palestinian businesses, and the "South-North Commercial Arbitration Committee", dedicated to the resolution of commercial disputes arising out of the Kaesong Complex in North Korea, reflect the evolution and manifestation of the new "commercial peacemaking" role of the ICA legal order, a role that could also be utilized by other rival states around the world.

Keywords: international commercial arbitration, Jerusalem arbitration center, commercial peacemaking, bilateral trade