Staying Ahead of the Curve

An examination of most commercial contracts governing international agreements will reveal a clause dealing with alternative dispute resolution, specifically arbitrations.

The oft-quoted advantages of arbitration, as opposed to litigation, usually revolve around control; in terms of privacy, timing, flexibility and cost.

Arbitrations are conducted in private, as opposed to litigation which is open to public scrutiny. Parties to an arbitration can also control the timing of the arbitration process, since they have chosen and employed the arbitrators conducting the process. There is also the benefit of avoiding trial by jury. As a result of this control, arbitrations are routinely used to resolve international disputes.

A very important consideration is the choice of forum to hear the arbitration, both jurisdiction and institution. Most parties will want the arbitration to take place in their home jurisdiction, but in an international agreement this might not be possible. In such a case, a third party jurisdiction satisfactory to both parties may be chosen and agreed before a dispute occurs. Countries that have adopted the New York Convention on arbitration are preferable, however if that is not possible a country with a stable court system and a proven set of procedural rules around the arbitration process must be chosen.

In terms of choosing an institution to hear an arbitration, the established institutional bodies such as the International Chamber of Commerce’s Court of Arbitration (ICC) or the American Arbitration Association (AAA) are attractive because of their sophistication and experienced professional staff. They can also be very expensive, so a cost-benefit analysis of the dispute should be undertaken before a choice is made. Ad-hoc arbitrations are possible; using the rules of an institution, without the administration costs.

It is also important to ensure that the arbitration award can be enforced by the prevailing party once handed down. This entails ensuring that assets due to be sequestered to satisfy the claim are located in an accessible jurisdiction.

The development of the arbitration clause within a contract is crucial to ensuring all of the above elements can be enforced correctly in the event of a dispute. Many commercial contracts neglect to include a properly tailored arbitration clause, designed specifically for the parties involved, because its importance is underestimated.

If time is taken to get this right, it will include provisions such as fee-shifting designations around the number and type of arbitrators to be used, plus specified forums and institutions. It might also specify the use of mandatory mediation prior to arbitration.

The following discussion between 10 arbitration experts from across the world, is a comprehensive analysis of the use of arbitration in international commercial agreements.

Our experts address all the points raised above and detail interesting specifics about their home jurisdictions, using case examples to highlight their points. Enjoy.

Conseillers contributeurs

  • Gary E Davidson
    Commercial Arbitration in Florida

    Gary E Davidson

    goldGary E is a gold member
    finalist 2021Gary E was Member of the Year finalist in 2021
    Partner, Diaz Reus
  • Dr. Klaus Oblin
    Commercial Arbitration and Commercial Litigation in Austria

    Dr. Klaus Oblin

    silverDr. Klaus is a silver member
    Senior Counsel, OBLIN Rechtsanwälte GmbH
  • Florian Wettner
    Commercial Litigation in Germany

    Florian Wettner

    bronzeFlorian is a bronze member
  • Pablo González Tapia
    Commercial Litigation in Dominican Republic

    Pablo González Tapia

    bronzePablo is a bronze member
  • Stephen Wilson KC
    Commercial Litigation in Turks and Caicos Islands

    Stephen Wilson KC

    bronzeStephen is a bronze member
    Managing Partner, Wilson Wells
  • Matthew Harrison
    Civil Law and Construction Law in Arizona

    Matthew Harrison

    bronzeMatthew is a bronze member
  • Dominic Wai
    White Collar Crime in Hong Kong

    Dominic Wai

    bronzeDominic is a bronze member
    Partner, ONC Lawyers