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SHANGHAI, Aug. 28 -- Shanghai will host an international court of arbitration to tackle aviation disputes, according to an agreement signed here on Thursday.

The agreement was clinched by the International Air Transport Association (IATA), the China Air Transport Association (CATA) and the Shanghai International Arbitration Center (SHIAC).

Jeffrey N. Shane, general counsel for the IATA, said that the new institution will be the only facility to specialize in disputes that arise in the air transport sector.

The IATA's 240 member carriers from around the world have developed a set of arbitration rules to govern the settlement of business disputes quickly and with as little disruption as possible, he said.

The CATA, SHIAC and IATA have assembled an committee of experts to help guide the new facility.

Representatives from Boeing, Airbus, Lufthansa and China's major airlines attended the signing ceremony.

China has been the second-biggest aviation market in terms of passenger volume since 2005. Its 49 airlines have over 2,250 jets in service, and they carried 354 million passengers last year.