For several years Article 25 of the Model Tax Convention of the Organisation for Economic Co-operation and Development on Income and on Capital (the OECD Model Tax Convention), and Article 25 of the United Nations Model Double Taxation Convention between Developed and Developing Countries (the UN Model Tax Convention) had relied only on a negotiation-based Mutual Agreement Procedure (MAP) as the only mechanism for the resolution of disputes arising from a tax treaty. The MAP, thus, refers to the process of mutual negotiation between tax administrations of the two treaty partners of a Double Tax Agreement (DTA). In this respect, the above model tax conventions have instructed that treaty partners should “endeavour” to resolve their tax disputes through the MAP. Thus, the model tax conventions did not contain any binding legal instrument which could require the treaty partners to finally reach an agreement for the resolution of tax disputes. As a result of this, serious questions have been raised as to the efficiency of the MAP in recent years, leading the OECD to openly acknowledge that there are situations in which cases could not be satisfactorily decided under the MAP process. In order to improve the function of the MAP mechanism, the OECD, in 2008, and the UN Tax Committee, in 2011, have introduced a binding ad hoc arbitration clause in Article 25(5) of their respective model tax conventions. However, the OECD and UN model tax conventions have recognised a very limited role for arbitration in resolving tax treaty disputes. If the treaty partners, during a MAP process, fail to come to an agreement about certain issues within a specific period of time, only then, those unresolved issues can be submitted to arbitration. Arbitration is, therefore, seen as an extension of the MAP process, not as a stand-alone and independent instrument for the resolution of cross-border tax disputes. After establishing that the inclusion of the current arbitration clauses in the OECD and UN model tax conventions have not assuaged the tensions created by divergent interpretation or application of rules espoused in DTAs, this thesis examines possible techniques for improving the dispute resolution system of DTAs and makes suggestions to improve that process.