Loan Agreements And International Arbitration

Globalisation led the world to make international transactions and cross-border loan agreements. Any breach could not be resolved solely locally. The need for an international solution evolved. The only method that could end international confusion appeared to be arbitration. Thus, international arbitration is increasingly recognised as a preferred forum for resolving disputes concerning international loan agreements, although it has not yet entirely supplanted traditional litigation.

International Loan Agreements

A loan agreement is a formal contract that outlines important counterparty information, responsibilities, and credit terms. These terms can be, inter alia, the loan amount, the type of loan being extended, the repayment schedule, and the interest rate.¹ An agreement cannot be characterised as a loan without providing for repayment pursuant to the specified terms in the contract. Returning what is borrowed is the distinguishing feature of a loan.