Introduction: Why Arbitrate? - Chapter I.1 - Practitioner's Handbook On International Arbitration And Mediation- 3rd Edition
Andreas F. Lowenfeld is the Herbert and Rose Rubin Professor of International Law at New York University School of Law where he has been on the faculty since 1967. He has taught, practiced, and written in nearly all aspects of international law for more than five decades, and is frequently an arbitrator in international controversies—public and private. He was Associate Reporter of the American Law Institute’s Restatement (Third) of Foreign Relations Law, and co-Reporter of the Institute’s Project on International Jurisdiction and Judgments. He is an elected member of the Institut de Droit International and of the International Academy of Comparative Law, and has twice been a lecturer at the Hague Academy of International Law. Prior to becoming a professor, he worked for more than five years in the State Department’s Office of Legal Adviser, as Special Assistant, Assistant Legal Adviser for Economic Affairs, and Deputy Legal Adviser.
§ 1.01 Overview
This chapter reviews the reasons for choosing to arbitrate an international commercial dispute:
(a) the parties’ right to select their forum, rather than be subject to litigation in the other party’s courts;
(b) the parties’ right to select the adjudicators for their dispute;
(c) the likelihood that the parties’ choice of governing law will be respected;
(d) the ease of enforcement of the arbitral award in other jurisdictions;
(e) reduced (many times substantially reduced) cost;
(f) for many adversaries, the most important reason of all, confidentiality of the proceedings.
Arbitration seems everywhere. One major New York law firm reported that 90 percent of the international transactions in which it is involved contain arbitration clauses, and yet one finds lawyers in the United States and abroad who hate arbitration, and swear that they will never again bring a dispute before a panel of arbitrators. Lawyers who have lost an arbitration case are not the only ones who dislike arbitration, though they are the ones who most long for some form of appeal, which arbitration generally does not afford.2 Even lawyers who have not lost an arbitration often express the wish that they were back in the courtroom, where they know the rules, in contrast with arbitration, where, they lament, there are no rules.
In my experience, both of those these perceptions are erroneous. The procedural rules of court are not nearly as comprehensive as many antiarbitration lawyers claim, as can be seen by the plethora of motions and by the large number of issues left to the decision--and discretion--of the trial judge. In contrast, although international arbitrators are granted wide leeway,3 international arbitration is not a free exercise. Not only are parties entitled to be heard (orally and in writing), and to be treated fairly and equally, they are bound to follow the panel’s rules.
§ 1.01 Overview
§ 1.02 Selecting a Forum
§ 1.03 Selecting the Arbitrators
 Arbitrator Neutrality
 Bipartisanship within the Arbitral Tribunal
 The Advantage of a Panel of Arbitrators
§ 1.04 Selecting the Applicable Law
 Respect for the Parties’ Choice of Law
 Impartial Application of Conflict of Laws Principles
§ 1.05 Enforcing the Award
§ 1.06 Other Claimed Advantages
§ 1.07 Conclusion