Mark Appel, senior vicepresident of the ICDR, is a leading member of a group of Irish legal and business people seeking reform of the 1954 Arbitration Law.

"The legislative framework for arbitration and mediation in Ireland is frankly in need of some updating, " he said.

The group, which also includes representatives from the Law Society of Ireland, the Bar Council and the Chambers of Commerce Ireland has put a proposal to the Attorney General and hopes to have a draft bill put before cabinet within six months.

Arbitration clauses are standard in many cross-border contracts, as they can be drawn up in accordance with international law governing arbitration and can provide certainty for both parties about where and how disputes will be resolved and what legal framework will apply.

In cases where a dispute does arise, the contract governs where the arbitration will take place and provides that the arbitrator's decision is final. Building materials group Kingspan, for instance, was awarded $40m following an arbitration hearing in Washington DC three years ago over a dispute with US company Tate Global.

Arbitration administrators, such as the not-for-profit ICDR, maintain that resorting to arbitration rather than litigation saves both time and money. ICDR says the process takes 10 months on average from start to finish . . . less than the time it can take just to get a court hearing.

"It is guaranteed quicker and more constructive than litigation, " said Chambers Ireland chief executive John Dunne, a keen supporter of alternative dispute resolution.

The Chamber has been trying to encourage its member companies to use mediation and arbitration first, rather than litigation.

Dunne said it was common in other countries for companies concluding a contract to include mediation and arbitration clauses and that there was much to be gained from encouraging that practice in Ireland. "We need to adopt it as part of business procedure, " he said.

The Irish legislation, however, was drafted at a time when arbitration was not as widely used as it is today or as widely accepted by the courts, and it contains several provisions which hinder the process.

One of the main problems, according to Appel, is a provision allowing parties to an arbitration to refer a point of law to the high court during the arbitration process. That has the potential to seriously delay arbitration proceedings, he said, and in certain circumstances has been used tactically to postpone a final ruling when one party feels they are likely to lose.

"It's a way to throw a spanner in the works. It's a way to slow the process down, " Appel said.

"The current law is simply not good enough, " said Klaus Reichert, a Dublin barrister and a member of the Chartered Institute of Arbitrators.

Reichert said Irish businesses were at a disadvantage in not having a solid legal framework for alternative dispute resolution. He said reforming the law could also be a step towards establishing Ireland as an international forum for arbitration hearings, a view echoed by John Dunne.

"There's no reason why we shouldn't become a centre for international dispute resolution. We see it as a way of attracting more investment to Ireland, " he said.

At present, according to ICDR's Appel, many cases which could potentially be heard in Ireland are not.

"Even our cases that involve Irish companies are as likely to be held in New York, Zurich or Paris as they are in Dublin.

That's a shame. It shouldn't be that way and it doesn't need to be, " he said.