The Top 5 Reasons to Choose International Commercial Arbitration

It is common for people to engage in trade and business "internationally" and sign international commercial contracts. Such contracts strengthen the global economy and open doors for many possibilities. International commercial contracts have a long history of existence. Having said that, it always has a chance of disputes too, between parties. International commercial disputes can create animosity between two parties and have political and economic repercussions. That is why it is essential to be prepared beforehand and find the best investment dispute resolution methods.

investment dispute resolution

Usually, parties make a pre-arrangement to solve existing and future disputes. Parties have to choose both "choice of forum for dispute resolution" and "applicable law" for dispute resolution. The forum is either litigation or an alternative dispute resolution court. When we talk about alternative dispute resolution methods, we will talk about the best method, which is widely recognised and easy to follow.

What is International Commercial Arbitration?

International commercial arbitration is one of the best dispute resolution processes. It gives parties the advantage of having a fair and quick procedure. Arbitration provides parties with more control over the procedure. It is a consensual arrangement between parties where disputes are solved in a non-conventional way, outside of the court. 

Furthermore, an arbitrator chosen by the parties hears both sides and grants a final award to the parties. It simply means the decision is final and enforceable. Due to its nature, international commercial arbitration has become the most preferred mode for dispute resolution in international trade and transactions. So, here are some reasons to choose arbitration to resolve investment disputes.

The Top Reasons to Choose International Commercial Arbitration

1. Easy to enforce: The arbitral awards not only have better recognition, but they are easy to enforce. According to article III of the New York Convention (1958), arbitral awards are binding and enforceablein accordance with the rules and procedures of the particular territory. Therefore, it is far easier to enforce arbitral awards than court judgments.

2. Neutral: It is possible for a court to be biased against the foreign party and rule in favour of the local party where it is seeking justice. Litigating in the home country can have the opposite results for a foreign party. In addition to that, litigation is a costly procedure in itself. There can be other problems too, like language barriers and enforcement of procedural laws. All these things can be overwhelming for a foreign party and waste everybody’s time.

Arbitration is a perfect choice for the fair settlement of disputes. Both parties can choose their arbitrators according to the applicable law and have a fair and neutral dispute resolution trial. Furthermore, the International Chamber of Commerce (ICC) rules of arbitration are perfect rules to provide a neutral framework for the resolution of disputes between parties. Even the UNICITRAL Model Law is in favour of fair trials and treating parties with equality.

3. Flexibility: Arbitration offers more control over the entire process of dispute resolution. While litigation is not that flexible, Technically, parties need to agree to arbitration and give their consent to arbitrate. They have the flexibility to choose their arbitral tribunal and choose a preferred date for a hearing. But, in litigation, they have no such arrangements.

international commercial arbitration

4. Some corporations do not want unwanted media coverage and want to maintain privacy throughout the procedure. They want to resolve their disputes without getting into the eyes of the general public and competitors. Arbitration provides privacy to parties that cannot be found through litigation.

5. Fast and cheap: Courts are overburdened with many cases already. Plus, it takes time to process cases. The litigation process is lengthy and time-consuming. It is better to choose arbitration for a fast-track procedure at a low cost.

Conclusion

The above points explain the benefits of international commercial arbitration that can help parties seek dispute resolution safely and quickly. Hence, it is not wrong to say arbitration resolution will remain the most preferred method in trade and business.

Location: Sweden

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