WHAT IS ARBITRATION?

Arbitration is a private method of dispute resolution that produces a legally binding decision. It is the usual alternative to court litigation, especially in international disputes.

A Neutral Third Party, the tribunal, is usually composed of one or three arbitrators. The tribunal, often chosen by the disputing parties, hears the evidence and makes a legal decision called an Award. The Award is enforceable just like the decision of a judge.

Why use Arbitration?

  • PRIVACY: Many people do not want the publicity of a dispute in Court. The chances of doing future business with this partner diminish if either party is embarrassed by publicity. With arbitration, trade secrets are not available to the press and the public.
  • EXPERTISE: Parties usually have the opportunity to choose their own arbitrator. Often they will choose a person with expertise in their field of business.
  • COMMERCIALLY EFFECTIVE: Parties agreeing to arbitration usually agree that there will be no appeal. This makes arbitration a “one-stop shop” and may cut out years of waiting.
  • CONVENIENT: Unlike a state court judge, who often has a lengthy waiting list, the arbitrator is available at the convenience of the parties.
  • FLEXIBLE: No gowns, wigs, or “Milord” – the parties and their counsel can choose a process that is as simple, or as complex as they need. In many arbitrations, the arbitrator decides on documents only, or with a very limited oral hearing.
  • NEUTRAL: For international disputes, neither party wants to trust the courts of “the other side”. Arbitration is generally conducted in a third country, and the arbitrator will often be of a nationality other than that of the disputing parties. No one has the “home team advantage”.
  • PORTABLE: Unlike a decision from a state court, an arbitration award can be enforced in nearly any jurisdiction in the world.

How to get to Arbitration?

  • Since Arbitration is an alternative to the usual process of a lawsuit in a state court, the parties must AGREE to submit their dispute to an arbitrator instead of to the judge. This is usually done by inserting an arbitration clause into their contract.
  • In some cases, parties decide to arbitrate AFTER the dispute arises. In this case, they will write up an arbitration agreement (sometimes called a “compromis”) describing the dispute and agreeing to submit it to arbitration.

Read more about Arbitration by clicking HERE.