A tale as old as time

If arbitration is viewed as disputes being resolved by a neutral third party outside of any official judicial system, then arbitration has been around for a long time!

In fact, arbitration has been around since before the judicial system was even set up. There are references to dispute resolution by neutral third parties in Greek mythology and the Bible.

Though courts were first set up in around the 1100s in the UK, arbitration stuck around, both in a national and international context. In the US, for example, there is evidence of arbitration having been used by chambers of commerce as far back as 1768. Yet arbitration did not have the prestige attached to courts and the judges working within its domain.

A 20th century update

Arbitration as we know it today has its origins in the early 20th century. This is because important conventions or treaties were entered into which provided for arbitration. Conferences held in 1899 and 1907 resulted in the Permanent Court of Arbitration at the Hague, and not too long afterwards, the League of Nations, which provided for arbitration between its nations. As we know, the League of Nations was unsuccessful but ultimately laid the foundations for the United Nations.

In 1892, the LCIA was established, in 1915, the Chartered Institute of Arbitrators was set up, in 1923, the ICC was founded, and in 1926, the Arbitration Society was set up in the US.

Following the Second World War, it was clearer than ever that a comprehensive international treaty for the resolution of disputes was required, and this was in part what led to the New York Convention of 1958. It would still be a while before arbitration would become a separate practice area.

The glorious 80s

It was really in the 1970s and 80s that international arbitration as a distinct practice was born. Two Freshfields partners, Alan Redfern and Martin Hunter, had worked on an important public international law case (Kuwait v Aminoil) in the 1970s. This experience led them to propose the idea of international arbitration as a separate practice area, together with Jan Paulsson. Before this even, the late Emmanuel Gaillard had joined Shearman & Sterling, where he decided to focus on international arbitration as a separate practice area, as did Gide Loyrette Nouel and Coudert Brothers.

Since then, international arbitration has developed into a fully-fledged practice area, arguably more popular than ever. To a large extent, its development has gone hand-in-hand with the development of cross-border commerce and investment, the growth of which is certainly not slowing down - pandemic aside.