Originally from American Review of International Arbitration - ARIA

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SPECIAL SECTION
RECOGNITION AND ENFORCEMENT OF ARBITRAL AWARDS
AND SETTLEMENT IN INTERNATIONAL ARBITRATION:
CORPORATE ATTITUDES AND PRACTICES
Loukas Mistelis & Crina Baltag∗
 

I. INTRODUCTION: THE CONTEXT OF THE 2008 SURVEY

It has been increasingly accepted, and also empirically proven, in the last ten
years that corporations trust and use international arbitration and other alternative
dispute resolution processes. While the recognition and establishment of
arbitration as a leading method of the settlement of disputes is undisputed, what
has been debated in recent years is the efficient use of the system of arbitration.
The growth of arbitration has been driven by flaws in the national legal systems
and the distrust and suspicion associated with litigation in a foreign country, as
well as by the desire to minimize costs and delays in the resolution of a dispute.
More importantly, arbitration is a neutral system particularly suitable for crossborder
and cross-cultural disputes. However, the shift to arbitration and alternative
dispute resolution ("ADR") mechanisms was not only determined by legal or
efficiency factors, but also by such factors as the desire to preserve a working
business relationship with the other party and to avoid the negative publicity and
aura emanating from court proceedings.

In 2006, the School of International Arbitration at Queen Mary University of
London conducted ground-breaking research on major corporations and their
perceptions and views towards international arbitration.1 This was the first survey
of its kind and on such a scale targeting major corporations, as the end-users of
international arbitration; it has opened the door for further research into the
practices of corporations in international dispute resolution processes.2 The 2006
Study3 was also the first and largest global, independently conducted, empirical
survey on international arbitration, involving 143 corporations, through their
corporate counsel (general counsel or head of legal department), from various
industries and regions of the world. The Study was directed towards general
attitudes and practices of corporations in international commercial arbitration and
did not discuss in detail arbitration procedure or the recognition and enforcement
proceedings in international arbitration.

The key messages of the 2006 Survey point toward a preference on the part of
large corporations for international arbitration and institutional arbitration, in
particular. The aim of the 2006 Survey was to reveal the real preference,
perceptions and experience of major corporations in international arbitration, by
testing the anecdotal evidence present in the arbitration field. Back in 2006,
corporate counsel appreciated the advantages of the arbitration procedure
(procedural flexibility, enforceability of awards, privacy of the process and
selection of arbitrators), but also criticized the disadvantages of the arbitration
proceedings (delays and increased costs). Ninety-five percent of the participating
corporations in the 2006 Survey indicated at that time that they would continue to
use international arbitration, as the advantages of this procedure clearly outweigh
any disadvantages.