Originally from Dispute Resolution Journal

The following article is derived from Francisco Orrego’s presentation at the ICC/AAA/ICSID Joint Colloquium held in Paris last year. He discusses the future role of arbitration in an emerging international dispute settlement system and investigates whether arbitration can truly be considered a part of the ADR mechanism.

As trade, investment, and private businesses expand throughout the world at increasing speed, dispute resolution systems face growing challenges. In fact, just as domestic court proceedings have been overwhelmed by the demand on their services arising from expanding economies and social life, so too international dispute resolution is facing the need to develop the appropriate responses.

An international alternative dispute resolution system (ADR), combining renewed traditional mechanisms with new approaches, is already in place and will no doubt be perfected in the years ahead. This article will explore some of the features of this new system, with particular reference to the role of arbitration in it.

Is Arbitration a Part of ADR?

Can arbitration really be considered a part of the ADR scenario? Historically, arbitration was indeed born as an alternative to the submission of disputes to the ordinary courts of justice, both domestically and under international law.

But what is the situation today, particularly in trade and business matters? Domestically, at any rate in the United States and the United Kingdom, arbitration is generally considered a form of ADR. Internationally, however, the answer is not quite so clear. The International Chamber of Commerce Amicable Dispute Resolution system (ICC-ADR), for example, excludes arbitration.1 But other institutions in the field, such as the London Court of International Arbitration (LCIA), do not seem to take the same view and both arbitration and ADR appear to be considered as alternatives, albeit each with its own characteristics.2

The answer probably lies in the path that arbitration is likely to follow.3 It has been noted that arbitration has evolved towards more structured forms that make the differences with court adjudication less meaningful.4 In point of fact, many times the strategy pursued by lawyers litigating in arbitration is not too different from that used in the ordinary courts of justice. Sometimes arbitrators tend to approach the procedure in a similar manner.

Should this approach prevail in the future, then it is probable that ADR will become an alternative not only to the courts but also to arbitration as it is characterized by a greater degree of flexibility and fewer formalities.