Arbitration in a nutshell

Arbitration

In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court. If there is no official definition for arbitration, we can note what its principal characteristics are.

Arbitration is a form of alternative dispute resolution. Most arbitration is driven by a pre-dispute contract entered into by the parties, in which they agree that if a dispute should arise, it will never get into the court system. Instead, the parties decide to submit the dispute to one or more arbitrators who make a binding decision on the dispute. Arbitration is consensual, it can only take place if both parties have agreed to it.

Arbitration is a confidential procedure: hearings are conducted in private and awards are not published, unless parties have expressly agreed to its publication.

Arbitration is neutral. Parties are able to choose such important elements as the applicable law, language, and place of the arbitration.

Due to the flexibility and finality of arbitration proceedings, resolving disputes through arbitration may often be quicker and cheaper than resolution through court litigation or other means of dispute resolution. Arbitration allows the parties to choose their own tribunal, often chosen according to the arbitrators’ degree of expertise.

The decision of the Arbitral Tribunal is final and easy to enforce. Unless otherwise agreed, the decision is legally binding and non-appealable, except in extremely limited circumstances, such as in the case of fraud or collusion on the part of the arbitrator. If a party refuses to enforce the award, the other party may appeal to the public power of the State. In this case, the party will have to request the exequatur of the award before national courts.

International Arbitration

International arbitration is to be distinguished from arbitration at national levels, as the latter is necessarily different according to each national law.

This form of alternative dispute resolution is especially used for the resolution of commercial disputes, particularly in the context of international commercial transactions. With its simple procedures, confidentiality and neutrality, as well as its procedural flexibility, arbitration offers consequent advantages in terms of time and cost-efficiency. Its international success is really based on the efficiency of the procedure (compared to more classic judicial proceedings) and the balance between its private aspect, which allows its flexibility, and its public aspect, which allows its effectiveness.

International arbitration allows parties from different jurisdictions, often from different cultural and linguistic origins, to solve disputes in a final and binding manner, without the formalities of the procedural rules of their own legal systems. International arbitration clauses, as well as the arbitral awards, are therefore necessarily internationally recognised in order to be able to be enforced throughout the world.

International arbitration is therefore the main form of international dispute resolution.