Originally from International Arbitration Law and Practice, Third Edition

ARBITRATION

1.1. Arbitration vis-à-vis Court Proceedings

A dispute may be referred to arbitration for various reasons:

(1) because the parties wish to choose the judge, rather than appear before someone appointed by judicial authorities;

(2) out of dissatisfaction with state court proceedings, due to their frequently excessive duration and to the quality of the decision, which – in many legal systems – can frequently be the result of a formalistic (even if possibly brilliant) intellectual exercise that has lost sight of the intended purpose of fairness; and

(3) a reason relevant in international disputes, because none of the parties is happy that the state court, or a national of the other side, is to decide on the dispute.

There is often hope that an arbitrator better qualified than the average state court judge will be found. The desire to protect confidentiality often plays a role, too. In spite of the seeming advantages of arbitration, however, many litigants are often unhappy with the result of their arbitration, and – excluding those situations when the unhappiness is simply due to having lost – some of their complaints and criticisms may be well-founded.