There has been a significant improvement in the adaptation of arbitration as a technique for the resolution of international trade disputes in accordance with the escalation in international trade over the last several decades. Parties involved in a dispute must agree to use arbitration as a way to settle their trade or commercial disagreements. Arbitration, however, contains many gains over litigation, the usual method for the resolution of trade disputes. Many of the key advantages of arbitration are as follows: The main benefits of arbitration are that the processes are flexible and that arbitrators are neutral. Additionally, on the basis of procedural corporate expertise, arbitrators can be appointed to hear cases. Furthermore, international treaties may enforce the arbitration awards. Finally, since the arbitration proceedings will not be conveyed, the parties should be able to avoid the adversative publicity which usually follows litigation. The worldwide popularity of international arbitration has not gone unnoticed by institutions, leading to a possible increase in the number of arbitration centres to accommodate the demand. In response, legislatures have enacted streamlined arbitration laws and procedures, and improved national courts have been established. These actions show a general commitment to creating a favourable environment for arbitration and hold parties accountable to their obligations to resolve disputes through arbitration. Local courts typically read arbitration clauses very broadly, which means that they can protect against a wide range of disputes. This can make it more difficult for parties to challenge arbitration awards in court. Arbitration can be formal or informal. In formal arbitration, the parties may go to an established organization that specializes in arbitration proceedings. In ad hoc arbitration, the parties may make their own rules and decide which jurisdiction the arbitration will take place in. For an ad hoc arbitration, there are many different institutional arbitration organizations, as well as established rules, all over the world. These may be relevant to international franchisees established in Pakistan..