The Historical Development and Functions of Commercial Arbitration: Global Evolution and the Chinese Experience

Commercial arbitration is a key mechanism for resolving commercial disputes in market economies, with roots in ancient Greece and Rome. During the European Middle Ages, particularly in Mediterranean maritime and commercial settings, arbitration developed into a specialized and institutionalized method. In the modern era, Western countries advanced arbitration systems through domestic laws and international treaties, leading to standardized and professional international arbitration. In China, ancient dispute-resolution traditions informed the emergence of modern commercial arbitration in the early twentieth century. The Arbitration Law of the People’s Republic of China (1995) formally established a rule-based system, further refined in the 2026 revision to match international standards. This study reviews the historical evolution and main functions of commercial arbitration. It argues that arbitration, characterized by party autonomy, procedural flexibility, expertise, and confidentiality, plays a major role in resolving disputes, improving efficiency, and supporting international trade and cooperation.