International arbitration: A necessary method of resolution of commercial disputes with a foreign element within the frame of legal order in Republic of Serbia

One of the basic rights of any person, whether an individual or business entity, is the right to achieve an adequate protection of its violated rights, in front of any state or non-state institution, independently and impartially. However, besides the very need for justice to be satisfied, the efficiency of the process resulting in its satisfaction is also of a great importance. It is not the same whether the establishment of the situation prior to the appearance of the unlawfulness will come within a reasonable time, or within a certain period, which, due to the length of the proceedings, only leads to the omission of justice and fairness. Precisely, it is the efficiency itself which determins the choice of the institution where the participants of the eventual future or emerging disputes will realize their own rights, since the very length of the proceedings, in addition to the uncertainty, can contribute to the development of negative consequences of the unlawfulness more seriously (the greater damage, losses in business, distortion of reputation, etc.). In that sense, the quickness of the process is especially important for business entities regarding the fact that the essence of their existence is a profit gained through the performance of their registered economic activities. Especially favorable are global economic flows, which open up a wide space in terms of the exchange of goods, services and capital outside the borders of the countries that business entities belong to, since the countries themselves are becoming more and more frequent participants of these flows. However, a preexisted harmonious relationship can be easily disturbed with the emergence of business disputes, that cannot be solved by the mentioned agreement. Then, the ruling legal systems, to which the state and business entities belong, become particularly prominent, in order to provide the answers to questions concerning the jurisdiction of the institutions for resolving the dispute, and also the rights that should be applied to the resolution regarding the specific legal nature of the relationship. In situations such as this one, where the laws of the free market predominate, it is clearly pointed out that there is a need for a completely special mechanism in the form of permanent or ad hoc arbitration tribunals, with the state courts competent to resolve economic disputes dominated by the element of foreign affairs. The need for such mechanisms is reflected in the fact that the rights and interests of business entities being violated during an international business cooperation would be satisfied through a “less formal” and more efficient procedure. Therefore, the international arbitration, as a special type of non-state tribunal, is of exceptional importance for economic disputes with a foreign element, if it was envisaged by the agreement between business entities.*