Arbitration is the process of resolving a dispute agreed upon between the parties in which the dispute is submitted to one or more arbitrators who render a decision. It is an ADR mechanism because it allows the parties to resolve their dispute outside the state's courts, in other words, without litigation.
Among the alternative dispute resolution methods, arbitration is defined as judicial and means of settling disputes due to the authority vested in the arbitrators to decide a case and render a decision. Different from mediation and negotiations, the two parties have no opinion on the solution reached by the arbitration tribunal, which is imposed on them in a final and binding way.
Agreeing to arbitration
The main feature of arbitration is its combinational nature. The dispute may not be resolved by the arbitrator unless the parties agree to this. The parties' agreement usually takes the form of an arbitration clause in the contract, before the dispute occurs. Once the dispute arose, the parties may agree to submit the dispute to the arbitral tribunal.
Types of arbitration
Arbitration may be local or international. Usually, arbitrations are international when the parties are of different nationalities and / or when international commercial interests are at stake. This definition may vary depending on the governing law that the parties agree to arbitrate. Definition of arbitration
There are different types of arbitration depending on the subject in dispute, for example commercial, construction, investor-state or investment arbitration (ISDS), etc.
Arbitration procedures can be classified as institutional arbitration, and ad hoc arbitration. Most arbitration proceedings are managed by arbitration institutions, including the International Criminal Court, SCC, ICSID, UNCITRAL (Pentachloroanisole), LCIA, SIAC, HKIAC, Dubai International Academic City, Educators, ICDR, OHADA (CCJA) and others. .
Advantages of arbitration in litigation
The main advantage of arbitration is the possibility of having a dedicated dispute resolution process that adapts to the specifics of the dispute. For example, the parties may agree on the person of the arbitrator or at least on the criteria that the arbitrator must meet. Arbitration procedures may be less costly than litigation considering non-appeal in most cases, which makes the process shorter, and thanks to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the resulting arbitration award can be enforced in 154 nations, unlike court rulings.