The Shanghai International Aviation Court of Arbitration, the world's first arbitration court specializing in solving global aviation disputes, was opened in Shanghai on Thursday.

The court was established by the International Air Transport Association, the China Air Transport Association and the Shanghai International Arbitration Center.

The three parties will recommend the court to its members for dispute resolution. They will also work together to incorporate the provisions of the Shanghai court globally.

"This is a long overdue development and one that will benefit the aviation industry enormously," said Jeffery Shane, chief legal adviser at the IATA. Shane is also a former undersecretary of the US Department of Transportation.

He said arbitration is a quick, efficient and affordable way to resolve disputes without destroying a business relationship.

The IATA has a set of arbitration rules to govern the settlement of disputes, but China's courts have not recognized them and won't enforce awards made pursuant to the IATA's rules.

The new court in Shanghai will fill the gap by adding weight and substance to the IATA arbitration process, he said.

"We envision the establishment of a list of experienced, trusted and neutral arbitrators ... to assist parties in resolving their differences quickly and affordably," he said.

The new court appointed 23 members to its expert committee, including the deputy head of Shanghai's high court, and the legal advisers of major domestic and foreign airlines such as Lufthansa and China Eastern, as well as China's domestic aircraft manufacturer COMAC and its foreign counterparts Boeing and Airbus.

Shanghai mayor Yang Xiong said the court will help the city realize its goal of becoming an international shipping center by 2020.

Zhou Qiang, head of the Supreme People's Court, said during an earlier visit to Shanghai that the city should also be built as a regional and even global center for arbitration.

Li Jun, chairman of the CATA, said establishing the court is only a start, and similar mechanisms should help fulfill Shanghai's goals and play a positive role in maintaining a stable international aviation market.

Shanghai has already become an air transport hub both in China and worldwide. The volume of cargo transported via Shanghai's airports is currently the third-largest in the world, and the passenger flow is the seventh-largest globally.

The city is a development base for China's domestically produced commercial airliner, and various policies in the Shanghai free trade zone are expected to boost the aircraft leasing business.

Sheng Leiming, president of the Shanghai Lawyers' Association, said soft power is the key for Shanghai to be recognized as a true global center for the aviation industry.

"For example, London lags far behind Shanghai in terms of throughput, but it is still the headquarters for some of the world's largest shipping companies because it has a set of rules that is globally recognized," he said.

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