INTERNATIONAL BUSINESS LAW. Advantages and drawbacks of arbitration. Alexandre Rebibo Mali Marciano Stephanie Nakache. Arbitration is One Way For Resolving Disputes. Negotiation Mediation Arbitration Litigation Violence.
INTERNATIONAL BUSINESS LAW Advantages and drawbacks of arbitration Alexandre Rebibo Mali Marciano Stephanie Nakache
Arbitration is One Way For Resolving Disputes • Negotiation • Mediation • Arbitration • Litigation • Violence There are various ways to resolve a conflict: The conventional one, the transaction, the conciliation, the mediation, the official or juridisctional judgement and arbitration
What is International Arbitration? • Private, nonjudicial dispute resolution process by which parties from different States present a dispute to neutral arbitrator(s). • The resulting Awards are generally final and binding on the parties. • Ordinarily, the arbitration results from an arbitration agreement or dispute resolution clause that is in writing. • Arbitration/dispute resolution clause is a manifestation of the parties consent to submit a dispute between them to arbitration. • Put another way, International Arbitration is an organic creature that is the manifestation of the consent of the parties to resolve the dispute between them.
Advantages of International Arbitration Separation of a Dispute from a party’s legal system • fear of unknown • fear of lack of sophistication • fear of corruption • fear of Homer problem • Impartiality of Tribunal • Faster and less expensive • Speed/Avoid delays in national court systems • Specialized expertise of Arbitrators • Flexibility/informality of procedures • Control of rules by prior consent of the parties • Easier Enforcement of Awards than Domestic Court Judgments
Advantages of International Arbitration • Confidentiality of proceedings/Award • Better able to deal with linguistic/cultural differences • Easier negotiation of the forum • Finality. Generally no appeal • Case by case resolution of the dispute by the Arbitrators who are not necessarily tied to the law • Can be less expensive than litigation
Disadvantages of International Arbitration • Generally no appeal • Compromise is more likely than all or nothing • Confidentiality is not absolute and difficult to enforce • Arbitral Tribunals have limited powers • Selection of Arbitrators can be time-consuming • Can be as expensive and slow as litigation • Difficult to obtain party consent to multi-party disputes • Arbitrator that is an expert in the field may not be a Legal Expert
Disadvantages of International Arbitration • In institutional arbitration, need to pay costs of Arbitrators and Administering Authority • Lack of precedent can lead to lack of uniformity of decisions • Case by case resolution of the dispute by the Arbitrators who may focus more on the facts than the law • Interim relief and discovery may be limited
Major International Arbitration Institutions • International Chamber of Commerce, www.iccwbo.org • London Court of International Arbitration, www.lcia-arbitration.com • American Arbitration Association International Centre for Dispute Resolution, www.adr.org • Many other specialized and general institutions as well.