Nonetheless, due to the clash of trading principles, it is often difficult to come up with an equitable decision which is favoured by the parties. In view of that, business-minded individuals (merchants) have led the call for an international tribunal who will decide on conflicting claims pertaining to international commercial dealings. Thus, the phrase “international commercial arbitration” has been formulated and put into issue. International commercial tribunals have been created—settling disputes by integrating the different principles in trade and commerce—mostly applying the “lex mercatoria” (law of merchants). In this sense, it can be stated that “the lex mercatoria is indeed a live subject: more so today than at almost any time over the last generation” (Fortier, 2001).
“Disputes are inevitable occurrences” in international relations especially in commercial transactions—failure or refusal to pay in accordance with the stipulations provided in a contract is one of the main causes of conflict (Lew, et al., 2003). To settle the differences of the contracting parties, alternative dispute resolution mechanisms are made available. Arbitration is actually one of the non-judicial methods of settling commercial disputes which has been exhaustively applied by some states and entities. In fact, some of the countries in the world have included arbitration as part of their law on civil procedure like Germany and France. Arbitration is a procedure by which conflicting claims of two or more individuals or entities with regard to their shared rights and obligations is heard and resolved by an arbitrator—the agreement reached by the parties has a binding effect (Halsburys Laws of England, as cited in Lew, et al., 2003, p. 3). As such, it has four fundamental features which include the following: an alternative to judicial proceeding, a private way of resolving disputes, parties can select and control the process, and final resolution of