Understanding International Arbitration

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Understanding International Arbitration

After World War II, business and trade boomed. There was a staggering interest in making products and services accessible to the global market. While trading between different nations exists before the war, it wasnand#39;t as prevalent and widespread.

However, this globalization introduced new issues that affect large businesses and companies across the world.

A sudden need arose to arbitrate between laws of different countries. To address this, UN members finalized a treaty called New York Arbitration Convention in 1959. More than 65 countries and 154 members of the UN participated in arbitration.

Hereand#39;s a more in-depth look at how international arbitration can help businesses that have global customers and partners:

What Is International Arbitration

International arbitration is a variation of U.S. arbitration proceedings. Itand#39;s important to brush on what a traditional arbitration to help understand the international version better.

Arbitration is a way of handling disputes whereby third-party arbitrators, usually a retired judges, makings a binding decision that both parties should follow. Both parties present their pieces of evidence and after the arbitrators hear the arguments from both sides, will arrive at a decision most beneficial for both parties. Compared to litigation, arbitration replaces the full trial process with arbitrators instead of a judge.

International arbitration is almost the same, but with one obvious difference: itand#39;s a dispute resolution process for businesses engaged in international transactions. Itand#39;s a better option compared to the more costly and time-consuming litigation processes.

Most companies are adapting to this dispute resolution method, adding them on their contracts. Contracts have a mandatory arbitration clause requiring both parties to use arbitration instead of commercial litigation in case of disputes.

What Are the Key Aspects Involved

An international arbitration solves the confusion behind which laws to follow between businesses from different countries. It also addresses the perplexity on which court has jurisdiction. International arbitration offers a neutral zone, settling disputes between businesses from different countries.

International Chamber of Commerce (ICC) is one of the largest associations that operate under the New York Arbitration Convention. Understanding how their process works will give you a clearer picture of what entails this type of dispute resolution.

Request Filing

If you need to request arbitration to resolve an issue from a customer in a different country, youand#39;d file a request to ICC for $5,000. The amount is for covering administrative costs and corresponding filing fees.

Some of the information needed for the request are as follows:

  • Nature of the dispute
  • Basis of the claim
  • Specific resolution

Pre-tribunal Process

The ICC will rule on situations if thereand#39;s no response from the other party. ICC will also address issues pointed out by the other party on the arbitration agreement. Both parties will also need to pay an advance on arbitration costs.

Actual Tribunal

Since both parties and the arbitrators are not in close proximity to each other, arbitration meetings make use of teleconference. This flexibility is one of the conveniences that international arbitration offers. Even witnesses and experts can take their stand using remote teleconferencing.

Post-Tribunal Process

After the proceedings, the tribunal will submit the specifics about the decision to the ICC International Court of Arbitration. This includes the actual timetable for the final award.

When Should You Create an International Arbitration Agreement

The option to go with international arbitration is influenced by the nature of your business. If your business works with partners outside your country, then this is the right dispute resolution process for you. The same goes if you have employees and customers from other countries.

To keep your business covered. itand#39;s always a good decision to add an international arbitration clause to your contracts. Hereand#39;s what the clause would state as per the International Chamber of Commerce:

All disputes arising from the contract andquot;shall be finally tested under the Rules of Arbitration of International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules.andquot;

Whit this clause included in your contracts, you can be sure that your business is not at a disadvantage in case disputes arise in the future.

Rely on Arbitration To Resolve International Disputes

Eliminate the cost of having to attend litigations, whether in your country or not. International arbitration offers the convenience and safe ground where you and the other party can resolve any disputes. Consulting with experts in the field of international arbitration, like Judge Robert Henry, can make the process smoother for both parties.


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