What is International Arbitration? An Overview

International Arbitration

What is international arbitration?

International arbitration is a method of alternative dispute resolution (ADR) for parties from different countries to resolve their dispute outside of a traditional court system. The commercial parties involved submit their dispute to an independent arbitrator or a panel of arbitrators who will then assess the evidence to make a binding decision on the disagreement, known as an arbitral award.

In many business contracts, an arbitration clause is included, known as an arbitration agreement. This clause signifies the parties’ agreement to undertake international arbitration should a dispute arise. The agreement will outline which arbitral institution will oversee the proceedings, the place of arbitration, the language and the governing law.

Parties without an arbitration clause in their commercial contract may still access international arbitration once a dispute has arisen through a submission agreement.

International arbitration is commonly used for various commercial disputes arising from international transactions.

If you are involved in international business, it is a good idea to understand how international arbitration works and the benefits it can offer. Please get in touch with our team at South Bank Legal to find out how one of our commercial solicitors can assist you with international arbitration.

The benefits of using international arbitration

The key features and benefits of international arbitration make it an attractive dispute resolution method for parties engaged in cross-border transactions. Some of the main benefits include:

  • Neutrality: International arbitration provides a neutral forum for resolving disputes between parties from different countries, reducing the risk of bias that may exist in national courts.
  • Party Autonomy: Parties have the freedom to choose arbitration as a method of dispute resolution and to shape the arbitration process according to their specific needs and preferences.
  • Enforceability: Arbitral awards (such as an ICC award from the International Chamber of Commerce) are generally enforceable internationally under treaties such as the New York Convention, making it easier for parties to enforce their rights across national borders.
  • Efficiency: Arbitration often offers a faster resolution process compared to traditional litigation, as parties can avoid lengthy court procedures and benefit from a more streamlined and flexible process.
  • Expertise: Parties can select arbitrators with expertise in the subject matter of the dispute, ensuring that decision-makers have a deep understanding of the issues involved and can render informed decisions.
  • Confidentiality: Arbitration proceedings can be conducted confidentially, protecting sensitive business information and trade secrets from public disclosure.
  • Flexibility: The arbitration process allows parties to tailor proceedings to suit their specific needs, including selecting arbitrators, determining procedural rules, and setting the language of the proceedings.
  • Finality: Arbitral awards are typically final and binding, with limited avenues for appeal, providing parties with certainty and closure once a decision is rendered.
  • Cost-effectiveness: While arbitration can involve significant costs, it often offers cost efficiencies compared to litigation, particularly in complex international disputes where litigation expenses can escalate due to procedural delays and discovery processes.
  • Preservation of Relationships: Arbitration allows parties to resolve disputes privately, minimising the potential damage to commercial relationships that may occur in a public courtroom setting.

Arbitral Institutions

Arbitral institutions are organisations that oversee and facilitate the international arbitration process. These institutions provide the guidelines and framework for parties to follow when experiencing an international commercial dispute and ensure proceedings are carried out in a structured and fair manner. The institutions themselves do not partake or decide in any outcome of the disputes, but rather provide helpful resources and ensure an efficient process.

Some key functions of arbitral institutions include:

  • Appointment of arbitrators: Arbitral institutions often maintain lists of qualified arbitrators and may assist parties in selecting arbitrators for their dispute.
  • Administration of proceedings: Arbitral institutions oversee the administrative aspects of arbitration proceedings, such as setting procedural timelines and managing communications.
  • Rules and procedures: Arbitral institutions typically have their own arbitration rules and procedures that govern the conduct of arbitration proceedings.

Some of the most well-known arbitral institutions around the world include:

How can South Bank Legal assist?

South Bank Legal are a leading firm of commercial law solicitors in England and Wales.

Our commercial solicitors provide legal services on a wide range of commercial disputes issues. These include intellectual property disputes, multi-million-pound shareholder disputes, drafting contracts and property disputes.

If you would like more legal advice on international arbitration or wish to discuss any of our services, you can contact us using the form below or telephone 02035765179 for a confidential discussion with one of our solicitors.

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