Originally from American Review of International Arbitration - ARIA

Preview Page

 I.  INTRODUCTION

Generally speaking, arbitration offers some advantages over the courts as a mechanism to resolve disputes in international commercial transactions. Those advantages include, inter alia, the fact that arbitration is expeditious, confidential, less expensive than litigation, and enforceable in many countries. Furthermore, arbitration is a more informal procedure and is decided by persons who are trusted by the litigants themselves or who have technical knowledge that ordinary judges often do not possess.   In addition, in many cases, especially in ongoing commercial relationships such as long-term construction, supply, and natural resource exploitation agreements, the parties to disputes hope to maintain their business relationships.   Also, since the parties in international contracts come from different countries, international arbitration provides a neutral forum for dispute resolution. For these reasons, most international commercial contracts are subject to arbitration for dispute resolution.  

Although most international arbitral awards are complied with by the losing parties voluntarily,  some, especially those involving "big money," are challenged by the losing parties on various grounds.  Attack on an arbitral award can be brought either in the country in which the arbitration took place or in the country in which recognition and enforcement of the award is sought, or in both countries.  The option depends on the losing party. If there is an attach on the award, some advantages of using arbitration for dispute settlement become illusory. The arbitral process will become time consuming and expensive.