Arbitration in the Western Balkans: The Emerging Commercial Landscape

Abstract

The rise of international arbitration was driven by the globalisation of commerce in the nineteenth and twentieth centuries, and the development of international law to regulate relations between the Great Powers. The history of the Western Balkans region in the same period insulated it from these influences, and thus arbitration remained unfamiliar. In the communist period, arbitration represented the antithesis of the political purposes assigned by the communist authorities to the domestic legal system. In the wars following disintegration of the former Yugoslavia, institutional capacity was further weakened by elite capture of judicial institutions. That legacy persists to the present day; but its effect is to exclude a significant proportion of the potential levels of foreign investment in the region. International arbitration remains a valuable tool for escaping partial domestic court systems and its use is likely to increase as the Western Balkans becomes increasingly open to foreign direct investment.

Keywords: Arbitration, Balkans, Dispute Resolution, Yugoslavia

JEL Classification: K33, K41