The Benefits of International Arbitration You Should Know
International arbitration is a popular and effective way of resolving disputes that cross national borders. It offers several advantages over traditional litigation, such as autonomy, confidentiality, limited discovery, flexibility, and enforceability. In this article, we’ll explore these benefits in more detail and explain why they may be the best option for parties involved in complex and sensitive disputes.
One of the main benefits of international arbitration is that it gives the parties a high degree of autonomy to design their own dispute resolution process. Unlike litigation, where the parties are subject to the rules and procedures of a particular court system, arbitration allows the parties to choose the following aspects of their dispute resolution:
- The forum: The parties can select the place where the arbitration will take place, which may have implications for the applicable law, the language, and the convenience of the parties and witnesses.
- The tribunal: The parties can choose who will decide their dispute, whether it is a single arbitrator or a panel of three or more arbitrators. The parties can also specify the qualifications, expertise, and nationality of the arbitrators, ensuring that they have confidence and trust in their impartiality and competence.
- The language: The parties can acquiesce on the language or languages that will be used in the arbitration proceedings, which may reduce translation costs and avoid misunderstandings.
- The procedure: The parties can comply with the rules and procedures that will be included in the arbitration process, such as the scope and timing of document disclosure, the format and length of written submissions, the use of witnesses and experts, and the conduct of oral hearings.
By giving the parties autonomy to tailor their dispute resolution process to their specific needs and preferences, arbitration can enhance efficiency, reduce costs, and promote cooperation and satisfaction among the parties.
Another benefit is that it can protect the confidentiality of the parties and their dispute. Unlike litigation, which is usually open to the public and may attract media attention, arbitration can be conducted in private and keep sensitive information out of the public domain. To ensure confidentiality, the parties need to include a confidentiality clause in their arbitration agreement or adopt arbitration rules that provide for confidentiality.
Confidentiality can be especially important for parties who wish to preserve their reputation, protect their trade secrets or intellectual property rights, or avoid disclosing information. Confidentiality can also foster a more constructive and cooperative atmosphere among the parties, as they do not have to worry about public scrutiny or criticism.
A third benefit is that it can limit the amount and scope of discovery that the parties have to engage in. Discovery is the process of exchanging relevant documents and information before a trial or hearing.
In litigation, especially in common law jurisdictions such as the United States, discovery can be very extensive and costly, as the parties have to produce a large number of documents and respond to various requests and interrogatories. In a non-traditional arbitration, however, discovery can be more limited and focused, as the parties can agree on the types and categories of documents that they will disclose or rely on the tribunal to decide what is relevant and necessary for the resolution of the dispute.
Limited discovery can benefit the parties by reducing the time and expense involved in preparing and reviewing documents, as well as minimizing the risk of disclosing confidential or privileged information. Limited discovery can also encourage the parties to focus on the key issues and evidence in their dispute rather than engaging in fishing expeditions or dilatory tactics. However, limited discovery may also have some disadvantages, such as depriving the parties of access to important information or documents that may support their case or undermine their opponent’s case.
International Arbitration Offers a Viable Alternative Dispute Resolution Process
By choosing this method, the parties can save time and money, avoid legal and cultural barriers, and achieve a fair and final resolution of their dispute. However, it is not without its challenges and drawbacks, such as the potential for bias, inconsistency, or lack of transparency. These can be mitigated by careful drafting of the international arbitration agreement, selection of the arbitrators and the arbitration rules, and active participation in the arbitration process, as well as consulting with experts like Judge Robert Henry.