Originally from the ICDR Handbook on International Arbitration Practice - Second Edition

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I.    Introduction

Freer and more accessible trading opportunities have generated a myriad of multinational commercial agreements that demand effective, fair and prompt mechanisms for the settlement of disputed rights and obligations. The speed and sophistication of these transactions does not tolerate resolution through traditional legal means developed by and for the convenience of the legal and accounting professions. It is often essential that relationships be preserved while acrimonious disputes are resolved. Litigation, while it has certain advantages, is not known for this. Businesses are demanding procedures for the resolution of disputes that are fair, prompt and crafted to serve the interests of the parties. This chapter discusses the advantages of international arbitration over litigation and identifies issues the arbitrator and the parties can address in the preliminary conference in order to ensure a fair and efficient proceeding.

II.    Litigation v. Arbitration

An analysis of dispute resolution procedures must begin with litigation, the dispute resolution system provided by the government and paid for through taxation. Its strengths are too obvious to be ignored. Judges are independent and made available without charge to the parties, since they are government employees. The process is public and there is a right to appeal. There are, however, a number of factors that militate against the choice of litigation for international commercial disputes.