International Commercial Arbitration

Arbitration is a private method of settling disputes, based on an agreement between the contracting parties.

International commercial arbitration covers relationships covers relationships of an economic nature involving more that one country.

International commercial arbitration is ruled by a set of principles including:

- Neutral situs. Parties to a commercial agreement that includes a dispute resolution clause generally will select final, binding commercial arbitration in a neutral situs to avoid favoring either party. This is not absolute. The governments of some countries, particularly in the Middle East, insist on arbitration in their own countries when entering into a commercial arrangement. Absent such questions of local policy, this remains a subject of negotiation for the parties.

- Neutral law. The same considerations governing choice of situs in a dispute resolution clause in a commercial agreement will apply to choice of law governing the interpretation of the contract and substantive issues in any future dispute. As a general rule, it is a good idea to have the applicable law be the same as that of the situs; otherwise the parties are adding another venue to challenge an award. This is because, under the New York Convention, a challenge to an award may only be brought in the country of the situs or the choice of law.

- Discovery. As a general rule, there will be less discovery in an international commercial arbitration than in any court proceeding. If a party believes it will need discovery in the event of a dispute that might arise in the future, it should negotiate the same and specify such procedures in the dispute resolution clause. Arbitrators should be selected with a view toward their penchant (or lack thereof) for discovery. Generally, document discovery will be surgical, and depositions not favored. If a party sees a dispute looming, it should maintain good contemporaneous documentation.

- Worldwide enforceability of award under New York Convention. In a nutshell, the New York Convention requires due process – the full opportunity to be heard – for an award to be enforced. All institutional rules provide for this, as do the UNCITRAL rules, often used in ad hoc international commercial arbitrations.

- Impartiality. In international Arbitration Law the arbitrators shouldn't be party-nominated which are deemed to be the certain party advocates. So, the arbitrators ought to be independent and uninterested in dealing in favour of the certain contracting party.

- Timeliness of award. Most arbitral institutions provide a time period – usually in the range of one year to 18 months – within which an award must be made. As a general matter, good arbitrators and the international arbitral institutions are becoming sensitive to the need for speed, and extensions, while always provided for, are becoming less than routine.

There are several specific terms in the context of international commercial arbitration. For example, "arbitration clause" means that the specific statement dealt with establishing the arbitration body is agreed during negotiating the contract. The term "arbitration agreement" means that the appropriate consensus was reached beyond the contract negotiating per se.

For self-study – organization and conduct of proceedings; New York Convention 1958 and Geneva Convention 1961, UNCITRAL Arbitration rules (amended on 2013).

Date: 2014-12-22; view: 1060