INCREASING ACCESS TO INTERNATIONAL ARBITRATION

     Increasing Access To International Arbitration

Author: Jyoti Pathak, Gautam Buddha University, Greater Noida.

Abstract

International Arbitration continues to be widely chosen as the preferred method of dispute resolution for parties, particularly where matters cross international boundaries. However, with the divergence of cases from open courts to predominantly closed arbitration hearings, questions of transparency have, and will continue to arise. In this article we will discuss what international arbitration really is,  what are the hindrance parties following when they seek international arbitration. Indeed , what this article ultimately seeks to achieve is evaluating the tools and initiative solution for increasing access to international arbitration

Introduction

International arbitration—a private dispute resolution mechanism that involves parties from different countries submitting their dispute to a neutral arbitrator or panel—is a globally preferred method for resolving cross-border commercial disputes. The panel will render their decision in the form of an arbitral award, which is enforceable in the 157 countries that adopted the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention

Arbitration is a method of dispute resolution that provides a final and binding outcome. Generally regarded as an alternative to court litigation, the existence of a valid agreement to arbitrate should mean that state courts refuse to hear disputes falling within the scope of that agreement.In arbitration the parties submit a dispute to an appointed decision-maker (arbitrator), or panel of arbitrators (the tribunal). This is typically done by providing for arbitration in the contract (the arbitration agreement). The agreement should also cover the number of arbitrators, the legal place or seat of the arbitration, and the procedural rules that will govern the arbitration.

The tribunal will generally give its decision (the award) following a hearing during which each party will have the opportunity to present its position. If appropriate, arbitrations can be conducted on paper only, for example, where the sums or issues in dispute do not justify a hearing. Generally, the tribunal will decide the dispute in accordance with the law governing the relevant contract.

Why International Arbitration Be Used To Resolve A Dispute?

Even in the presence of an agreement containing an arbitration clause, negotiations or international mediation may be worth considering unless it is clear that the opposing party is unwilling to negotiate an end to a dispute on fair terms or in good faith. While arbitration will result in a final and binding judgment, like any legal dispute a ruling on the matter will not be instant and, on average, an international arbitration takes approximately 18 months from the filing of a case until the rendering of an arbitration award for a commercial arbitration (investment arbitrations take roughly twice as long).

In addition to providing an overview of international arbitration, we maintain an international arbitration blog and access to information concerning upcoming international arbitration conferences, which may assist in determining whether international arbitration is right for resolving your legal dispute. You may also read the latest news concerning international arbitration to see what kinds of cases are heard and the types of rulings that are issued. One may also ask the arbitration lawyers of the International Arbitration Attorney  Network to assess the merits of  cases or estimate the potential duration of an international arbitration based on a number of variables.

Hinderance to access international arbitration

There are numerous factors which play a role in hindering parties’s access to international arbitration. The high level of costs,  duration of the proceedings , lack of speed was one of the three worst characteristics of international arbitration. Interestingly, the survey found that users operating in the finance industry were particularly concerned about the speed and flexibility with which financial disputes can be resolved.

Duration:

Increased standardisation/formalisation of the arbitral process. Delays can start to set in from the beginning, when the procedural timetable is fixed. Arbitral institutions generally do not prescribe specific timelines in their rules.

  • Multiple and lengthy pleadings, spread out with months in between.
  • Interlocutory applications and procedural challenges.
  • Wide-ranging document production exercises.
  • Multiple factual and expert witnesses.
  • Multiple hearings.

Cost:

Aside from legal fees (which, together with expert fees, make up the majority of the costs of an arbitration), other expenditure includes tribunal fees, administrative costs of the arbitral institution, and the various logistical costs involved in arbitrating including, for example, hiring the hearing

Lack of Speed:

Forming the tribunal and tribunal availability. The process of forming the arbitral tribunal can also take up a significant amount of time, particularly where there are three arbitrators involved.Delay tactics and lack of effective sanction. If it suits their case strategy, parties may use delay tactics and seek to drive up costs, to wear down their opponents and achieve a settlement. The arbitral tribunal has a key role to play in keeping delays and costs under control and tackling inappropriate conduct.

Tools and innovative solutions for increasing access to International Arbitration

As times change and technology evolves, arbitration users seek ways to reduce cost and delay and to increase efficiency.  The leading institutions have responded to users’ needs by introducing a range of innovative solutions, including expedited procedures or “fast-track” rules, provisions for the expedited formation of the tribunal, emergency arbitrator mechanisms, and procedures for summary dismissal.

Tiered dispute resolution clauses:

Parties should consider building in time for/mandating the use of negotiation, mediation, or other forms of ADR, before the dispute proceeds to arbitration. This can be done through the use of tiered dispute resolution clauses. Mandatory provisions could increase delay, however, if it becomes clear that the particular dispute is not capable of settlement before arbitration. The clause could provide for a specified initial period during which the parties attempt to settle, after which the period is extended by agreement.

Agree on a suitable procedure and timetable:

It may also be possible for the parties to agree on a suitable procedure and timetable for the arbitration, which could include limiting or dispensing with certain stages . This could help to avoid ambiguity and narrow the scope for disputes later on. Whether or not this is an advisable course depends, for example, on whether it is already clear what types of dispute are likely to arise under the agreement, as parties may not wish to be restricted prematurely.

Upfront planning and early specialist legal advice:

Once a dispute has arisen, upfront planning and obtaining early specialist legal advice is key. Parties should consider whether third party funding or other forms of financing might be appropriate. Choosing an arbitrator with the relevant skill-set, and availability, is important in terms of potential time and cost savings as the arbitration progresses.

Early procedural conference:

Parties can use an early procedural conference to push for their desired timetable, taking advantage of the inherent flexibility of arbitration.

Sensible use of technology:

Technology has a key role in increasing efficiencies, particularly in relation to document review and production, and in relation to hearings. It has a significant impact on the future evolution of international arbitration. With the huge proliferation of data that parties are often faced with, they must think very carefully about how electronic document production will be managed, to avoid spiralling costs. Digital case management systems can be used to assist the efficient management of an arbitration case and provide a secure platform for the storage of electronic data, with cyber security being a particularly hot topic in the arbitration community

Conclusion

Doing the work of arbitration today amounts to making a contribution to articulation of a ” new civil procedure” if fortune continues to smile and constructive optimism to reign, perhaps the elaboration of a new civil code as well. The volume and uniformity of the judicial decisions on arbitration leave little doubt that something new is afoot that has profound implications for the practice and the traditional character of law. The march of arbitration continues along an ever more decided path, and the drumbeat of the Supreme Court is ever firmer and more confident. The change that it has brought to and still portends for the legal process is significant and likely to be permanent. Arbitration is neither a vestigial relic of legal history nor a peripheral specialty. It is becoming the chief vehicle for accomplishing the ends of civil litigation.

Reference

  1. Tools and innovative solutions for increasing access to international arbitration – Walker Morris
  2. International Arbitration Information Provided on This Website • Arbitration
  3. International Arbitration Reform Needed to Improve Pacific’s Access to International Markets, Investment | Asian Development Bank
  4. Introduction to International Arbitration | Quick guides | Ashurst

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