Rise of International Disputes
Q. Identify a key problem or issue in the area of international dispute resolution. How is this issue being addressed by courts or international bodies? What, in your opinion, should be done in the future?
A. In the last few decades, there have been some significant changes in the world and many of them were totally unexpected. For example, there was rapid breakup of Soviet bloc and the centralized economic planning was rejected. Similarly, there was willingness among the United States and its allies to impose national boundaries with the help of sophisticated and overwhelming military power. There was ever increasing economic connectedness that was the result of rapid communications, and transfers in currency and travel. The business world became smaller, interconnected, and there was a desire present to achieve growth and profits. Human desires and consumer epithets in all parts of the world require that the economy should produce, distribute and sell. As a result, there was a rapid rise in commercial transactions, there were more contracts, more negotiations and increased business obligations. The result was that there were more disputes to be resolved, including international disputes.
Most of the business disputes, national or international can be resolved through the phone. In some cases, there may be a need for a face-to-face meeting, however, negotiations remained the main method to resolve disputes. In this regard there are some intractable controversies. In order to deal with these issues, the alternative dispute resolution gained much popularity. Under these circumstances, international arbitration is the prime method to resolve disputes that may arise between states, corporations and individuals in nearly every aspect of international trade and commerce. It has been stated in this regard that in view of the widespread significance of international arbitration in the present world where commercial life requires that there should be quick and timely activity, it appears that international arbitration is becoming popular and a large number of businesses are relying on it. At the same time, the concept of arbitration is also very simple. In this case, the parties to dispute arrive at the agreement that they are going to submit their dispute that may arise in the course of trade or commerce to the person and the expertise of such person is trusted by both the parties. Therefore in such a case, both the parties put forward the case along with sufficient evidence for the purpose of supporting the claim to such private individual known as the arbitrator. The arbitrator then considers all the evidence and the arguments made by the parties and beaches at a decision. This decision is binding for the parties to the dispute. The decision has to be treated as binding and final, because the parties themselves have consented to it instead of any coercive or binding power of the state. In this way, international arbitration can be described as the prime method to resolve disputes mainly arising in case of international commercial agreements and international disputes. It can also be stated that arbitration has proved to be an efficient way to achieve a final decision. That is binding for the parties without taking recourse to the courts of law or using legal formalities. As a result of the rising popularity of arbitration and the need for having such effective dispute resolution device, a large number of lawyers and accountants have also established exclusive groups of arbitration experts. In the same way, many states have also started modernizing their legislations to deal with the imperfections present in the traditional court system. The defining characteristic of arbitration is that while it is different from judicial processes at the same time, it also results in the resolution of disputes among the parties. Arbitration does not follow the technical, lengthy and expensive process. That is used in case of litigation, but it provides an efficient and flexible means to resolve the disputes between the parties. Generally the arbitrators are the persons who have technical expertise in the particular area of dispute and they are respected by the parties to this for such expertise.
Alternative Dispute Resolution and International Arbitration
Features of international commercial arbitration: The popularity of international commercial arbitration is constantly rising in the form of dynamic dispute resolution process. As a result of the distinct character of arbitration, while interacting with domestic law whenever and wherever needed, the process of arbitration operates on a distinct sphere, where the will of the parties and the rules provided by non-national institutions and international treaties regulate the whole process. In this way, it can be said that in case of international arbitration, there is a mix of comparative law as well as the private international law. This allows the expansion of the horizon of arbitration beyond the aspects of domestic law, and it also succeeds in by passing the lengthy procedures, as well as the attitudes of national courts.
As compared to the general judgments of the national courts, the arbitration awards can be enforced easily. Another significant feature that is present in case of international arbitration is that an option is available to the parties to the dispute to select a New Jersey instead of submitting the dispute to the jurisdiction of the national law of the parties. Similarly, the procedure that is adopted in case of arbitration is much less complex as compared to the formal court proceedings. In this case, the parties are free to decide and design the process of arbitration. Another significant advantage that is available in case of arbitration is that of confidentiality. Hence, it becomes easier for the parties to resolve the dispute that the parties come from diverse legal backgrounds like the civil law or common law jurisdictions. The parties themselves select the arbitrators, who have significant experience in their opinion, regarding the subject matter of the dispute and are also familiar with the national laws and the business rules that apply in a particular case. Similarly, the cost of litigation is also cheaper in case of arbitration as compared to the standard court fees. Moreover, the parties can agree regarding the fees and also regarding various other procedural aspects.
The present state of international commercial arbitration: questions have always been raised regarding the condemnation related with the effectiveness of international commercial arbitration as compared to the traditional court system. However, the present business world that wants to save time, the arbitration process has become more appealing for its ability to produce their results and also its cost-cutting abilities. At the same time, the commercial arbitration is also favored for the flexibility it provides in appointing a neutral person who has specific expertise and knowledge regarding the subject matter in dispute as compared to the traditional court practices in which it takes a long time to arrive at a decision regarding a particular commercial oriented issue.
Features of International Commercial Arbitration
Although the process of arbitration has become the main method to settle international disputes outside the courts, but still needs legislative interventions as the assistance of the courts in order to achieve smooth functioning. However, it has been noted that a large number of corporations are giving preference to using the process of arbitration in order to resolve their disputes. In the same day, a large number of corporate counsels are also satisfied with the process of international arbitration. The rising popularity of the process of international arbitration can also be seen from the empirical data provided by the largest international arbitration bodies. Under these circumstances, it can be clearly stated that commercial business has started to use the process of arbitration not only due to the enduring advantages provided by it but also due to the speedy and quick results delivered by arbitration. Another reason is that in case of arbitration the dispute ends early due to which a lot of money is saved by the parties to the dispute. In this regard there are two types of arbitration in which the ad hoc arbitration allows the agreement to specify the selection of the rules, the appointment and the powers of the arbitrators. On the other hand, the UNCITRAL model of arbitration is selected for the flexibility it provides. The law that is based on this model provides significance to the autonomy of the parties, the severability of the arbitration clause and also the competence of arbitration tribunal. In the same way, the other noteworthy international arbitration institutions are also doing good. The rules and procedures that are followed by such institutions provide coherence along with some stance and proceedure to the process of arbitration. These institutions also protect the distinct features of arbitration and they also adapt to the recent technological trends and other rising needs. The major institutions in this context are the International Chamber of Commerce, Paris; London Court of International Arbitration, London; American Arbitration Association, New York, Swiss Arbitration Association and Kuala Lumpur Regional Center for Arbitration.
However, the premier institution related with arbitration at present is the International Chamber of Commerce (ICC). This institution is not a court of law, but it can be described as the administrative body of arbitrations taking place in ICC. The American Arbitration Association is also not a typical institution or the center to promote arbitration or for conducting arbitration proceedings. This institution is acting as a nonprofit organization. The Swiss Arbitration Association has remained the host of arbitration proceedings in Switzerland taking place in accordance with the ICC rules. Similarly, the Kuala Lumpur Regional Center of Arbitration was established in 1978. It is supported by the government of Malaysia, but it is not an agency of the government. It can be described as a consultative organization that provides a forum to settle disputes by using the process of arbitration in context of trade, commerce and investment.
Advantages of International Arbitration over Traditional Court Systems
The crisis in international commercial arbitration: it is not doubted that often. International commercial arbitration is used for settling disputes of the court, but it also needs to be noted that there are certain difficulties in challenging and enforcing the awards of international commercial arbitration along with the rising influence of state legislatures and courts. The legislation’s that have been imposed in this regard, result in creating difficulties in the enforcement of awards. These awards are refused to be enforced on account of the reason that they are against public policy. Hence, a lack of condemnation exists between the courts and legislation and this is a major concern for enforcing the arbitration awards in a foreign state.
However in the end, it can be stated that with the rising significance and the positive outlook towards international commercial arbitration as a process of resolving disputes, it is required that the concerns of the users of international arbitration should be addressed where large amounts of assets and money are involved. As these days, most of the international corporations are using international arbitration; the increase in number of these awards can be predicted. However, the concerns of the users in this regard and are not limited to those mentioned above. By establishing a standard International Arbitration Court of Appeals and Enforcement, through a convention of the United Nations that is acceded to by the States would make sure that the commercial disputes are resolved by neutral specialists, in private and in a way that can be expected as being more predictable, efficient and less costly as compared to the present practice of international commercial arbitration. In this regard, it can also be suggested that the presence of a global commercial arbitration system will also result in promoting international trade and investment as it will reduce the risk that any potential commercial dispute will be decided by the home-court of the counter-party.
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