Originally from: Arbitral Institutions Under Scrutiny: ASA Special Series No. 40

1. MAJOR ADVANTAGES OF ARBITRATION

It is like a mantra repeated by every author and commentator on arbitration that arbitration offers parties a more efficient way to resolve disputes which, in addition, has the potential to lead to more satisfactory outcomes in terms of the quality of the decisions. This argumentation aims at convincing contract parties to chose arbitration not only because arbitration provides for a neutral forum (as an alternative to litigating in the home courts of one of the parties), but also because arbitration is somehow a quality-wise superior method. As far as efficiency is concerned, two advantages are pointed out usually, namely on one hand that arbitration is faster than court procedures (i.e. it takes less time until an enforceable decision has been reached), and that resources are spent in a more economical way. Already the general title of this Conference (Arbitral Institutions under Scrutiny) indicates that the general praise of arbitration is not shared universally, and that there are critical voices as well. I would in fact submit that all of the above arguments could be countered with actual cases where the opposite was true. Just use the opportunity of one of the many arbitration conferences and listen to the war stories shared by seasoned practitioners—of course none of which would be repeated on a panel.

The aim of this article is to give hints how arbitral institutions could contribute to deflecting and hopefully eliminate the critical voices against arbitration. Or, should we simply accept that, in spite of advantages such as enforceability of decisions under the New York Convention, neutrality and confidentiality, arbitration is about to lose its reputation due to teh fact that it is not as efficient as it was once said to be?