International Commercial Arbitration
International commercial arbitration is an alternative method of resolving disputes between private parties arising out of commercial transactions conducted across national boundaries that allows the parties to avoid litigation in national courts. Commercial Arbitration is the submission of a dispute by agreement of business parties to a neutral third person, whom the parties have chosen to rule on their dispute. The disputing parties agreed in advance to comply with that person’s decision.
To a much greater extent than litigation in the courts, international arbitration provides finality in the decision-making process. One of the disadvantages of the court process is that judgments can sometimes be subject to one or more appeals, and these can take years to be resolved. International arbitration is the preferred method of resolving cross-border disputes. The neutrality it offers, together with the relative ease of enforceability of awards, can make it a more attractive forum for disputes than litigating in contracting parties’ national courts. International arbitration is arbitration between companies or individuals in different states, usually by including a provision for future disputes in a contract.
Arbitration can be either “institutional” or “ ad hoc .” The terms of the contract will dictate the type of arbitration. If the parties have agreed to have an arbitral institution administer the dispute, it is an institutional arbitration. If the parties have set up their own rules for arbitration, it is an ad hoc arbitration. Ad hoc arbitrations are conducted independently by the parties, who are responsible for deciding on the forum, the number of arbitrators, the procedure that will be followed, and all other aspects of administering the arbitration.
The types of law that are applied in arbitration include international treaties and national laws, both procedural and substantive, as well as the procedural rules of the relevant arbitral institution. Previous arbitral awards carry persuasive authority, but are not binding. Scholarly commentary, or “doctrine,” may also be applied.There are many helpful research guides published by university libraries and professional organizations on the topic of international arbitration.
The International Council for Commercial Arbitration provides a wealth of information on its website, including a collection of full-text journal articles and extensive lists of links to arbitration treaties and conventions, national arbitration laws, arbitral institutions, and professional organizations. Although membership is required to access portions of the site, the majority of the information is publicly available. International agreements facilitate the enforcement of foreign awards to the extent that no further action is necessary in the country in which the award was rendered; the opposing debtor must establish that the award has been set aside or that its effects have been suspended by a competent authority, which thus shifts the burden of proof of the nonbinding character of the award to the losing party. Further development of international commercial arbitration has been encouraged by the UN Commission on International Trade Law, which aims at promoting the harmonization and unification of laws in the field of international commercial arbitration.