The author is partner and coordinator of the European/Middle East Disputes Practice of Jones, Day, Reavis & Pogue, based in Frankfurt, Germany. He is a member of the New York and Paris Bars. This commentary is an expanded version of his presentation at the Inaugural Kronstein Seminar of the International Law Institute in cooperation with Georgetown University Law Center and the Law Faculty of the University of Heidelberg in Heidelberg, Germany.
Foreign parties entering into a contract agreement with a U.S. party today face the difficult decision of whether to settle any future disputes through arbitration or litigation. The perceived unwieldiness of the U.S. court system, whether justified or not, has been a strong factor in many non-U.S. parties opting for arbitration. However, each case has its own characteristics; many fit better in arbitration than litigation, many others do not. In order to help foreign parties decide on the proper dispute-resolution forum, this article will examine the many different factors that may come into play in the choice between arbitration and the U.S. courts.
Arbitration has come to be known, and in some circles is still known, as “alternative dispute resolution”—that is, an alternative to resolution by litigation in the municipal courts. The most important reasons for seeking an alternative to the courthouse, in the transnational context, include the hope for simplified commencement of proceedings and service of process, neutrality and facilitated taking of evidence. They also include the hope for expeditious issuance of an award, confidentiality and simplified enforcement.