A guide to international arbitration

It refers to the process of resolving disputes between parties from different countries through arbitration rather than through traditional court litigation. It is a method of alternative dispute resolution that takes place outside of national court systems and involves the use of arbitrators who act as private judges to make binding decisions. In this, the parties voluntarily agree to submit their dispute to arbitration, typically by including an arbitration clause in their contract or by signing a separate arbitration agreement. The arbitration process is governed by agreed-upon rules, often established by international arbitration institutions, which provide a framework for conducting the proceedings.

Nature and scope

• International Nature: It deals with disputes that have a cross-border dimension, involving parties from different countries, and this is what distinguishes it from domestic arbitration, which involves disputes within the boundaries of a single country.
• Voluntary and Consensual: It is a consensual process, meaning that the parties voluntarily agree to submit their dispute to arbitration.
• Neutrality and Impartiality: It is designed to provide a neutral and impartial forum for dispute resolution. Arbitrators, who act as private judges, are expected to be independent and unbiased in their decision-making.
• Flexibility and Party Autonomy: It offers flexibility in terms of procedures, rules, and choice of arbitrators.
• Enforceability: The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards provides a widely recognized framework for the enforcement of arbitral awards across many countries.
• Multidisciplinary and Expertise: It often involves complex legal, technical, and commercial issues, and its multidisciplinary nature ensures that parties have access to experts who can understand and effectively resolve their complex disputes.

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Its scope is broad, encompassing a wide range of disputes arising from international transactions and relationships. It serves as a flexible and effective means of resolving commercial, investment, and public international law disputes between parties from different countries, providing an alternative to national courts and promoting international trade and investment.

Laws governing international arbitration

1. New York Convention: The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention, is a crucial international treaty governing the recognition and enforcement of arbitral awards.
2. UNCITRAL Model Law: The United Nations Commission on International Trade Law on International Commercial Arbitration is a widely recognized model law that serves as a guide for national legislation on international commercial arbitration.
3. International Arbitration Rules: Various institutions, such as the International Chamber of Commerce (ICC), the London Court of International Arbitration (LCIA), and the International Centre for Settlement of Investment Disputes (ICSID), have developed their own sets of rules governing it.

Conclusion:

In conclusion, it is a widely accepted and utilized method of resolving disputes that arise in cross-border transactions and relationships, and continues to be a preferred method for resolving international disputes, providing parties with a fair and efficient alternative to litigation and supporting international trade, investment, and commercial relationships

FAQs

• What is the difference between international arbitration and domestic arbitration?

Answer: It deals with disputes arising from international transactions or relationships involving parties from different countries. Domestic arbitration, on the other hand, involves disputes that are limited to within the boundaries of a single country.

• How is an arbitral tribunal constituted in international arbitration?

Answer: The parties mutually agree on the appointment of arbitrators. If they cannot agree, the arbitration rules or the law of the seat of arbitration may provide a mechanism for the appointment, such as the involvement of an arbitration institution or an appointing authority.

• Is international arbitration confidential?

Answer: Confidentiality can vary depending on the parties’ agreements, the arbitration rules, and the applicable law, and it is not absolute.

• How long does international arbitration typically take?

Answer: The duration can vary widely depending on the complexity of the dispute, the number of issues involved, the procedural choices made by the parties, and the efficiency of the arbitral tribunal.

• Can arbitral awards be appealed in international arbitration?

Answer: Generally, arbitral awards in international arbitration cannot be appealed on the merits, and is a fundamental principle of arbitration. However, limited grounds may exist for challenging or setting aside an award, such as procedural irregularities, lack of jurisdiction, or violation of public policy, under certain national arbitration laws.