The Importance of International Commercial Arbitration Essay

As litigation continues to be a time-wasting, costly, distracted, and unsatisfactory practice for dispute resolution, alternative dispute resolution increases in popularity, specifically, mediation and arbitration. Arbitration is a cost efficient substitute to litigation that is the yielding of a dispute to an impartial party in order to receive a final incumbent decision in the form of an award. Arbitration is sensitive, classified, and modeled to be a swift, and inexpensive solution to dispute. Participating parties may include additional terms in the agreement identifying arrangements to their agreements’ arbitration clauses to meet the requirements of their discrete dispute. In summation, arbitration is process that is private, speedy, cost efficient, and customized to the liking of the parties involved.

One of the foundations of arbitration is that awards rendered are final and not subject to appeal before the courts. In this respect, Article 5 of the UNCITRAL Model Law provides for minimal intervention, and says, “In matters governed by this Law, no court shall intervene except where so provided in this Law“. As a result, the grounds upon which a court may set aside an award or refuse to recognize and enforce the same are limited. Article 34 of the Model Law and Article V of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards provide the restrictive grounds for such relief.

Finally, based on common law, the principle of comity and equity may oblige the courts to recognize foreign arbitral award, regardless where the arbitration was seated. The US Courts

In evaluating the legality of an arbitration clause, the court examines the nature of the provision as it relates to both irrevocable statutory rights and private agreements between the employer and employee. To invalidate an arbitration provision on the basis of

Arbitration is legal technique used to resolve any disputes outside of the courts. Arbitration allows for speedy and cheap resolution of any disputes, the parties involved in a dispute agree to appoint a third person (arbitrator) who will hear their testimonies, and look into the evidence they provide. The arbitrator's decision cannot be challenged in a law court as it is considered final and the parties involved have to accept the decision (Brams & Merrill, 1986). There are only very limited circumstances where the decision of an arbitrator can be challenged, and this is mostly if there can be proof from one of the parties showing that the arbitrator was biased in their decision or ruling. The chosen arbitrator will be an experienced person in the area of the dispute.

This system establishes a permanent judicial structure composed of two courts - a Tribunal of First Instance and an Appeal Tribunal. The members of these tribunals are appointed by representatives of the Parties to the Treaty and must fulfill ethical requirements set up in the agreement. Therefore, this permanent system marks a turning point and demonstrates the European Commission's will to increase the legitimacy of the investment dispute settlement (even though, in our view, the system is still not totally exempt of shortcomings due to the involvement of political powers in the appointment process).

The Supreme Court held in State of Orissa v Damodar Das, that the cause did not have the effect of being an arbitration clause. The court said that the clause did not contain an agreement nor it envisaged any difference or dispute that might arise or had arisen in the execution of the words for reference to arbitration , where one party raised a dispute and it was desired by the other. It was held that it had to be treated as a dispute. The objection raised could be exclusively within the jurisdiction of the Arbitral Tribunal .

The discussion of the commercial arbitration is evident with many authors in their writings. In particular, Terry & Guigni, Business, Society and the Law (2003) outline the critical views on its purpose and how the promise has been compromised. Negativity does flow through due to

Arbitration in local and international roles is present in the Islamic Middle-East. Nowadays, the countries in Islamic Middle-Eastern countries like the United Arab Emirates, Bahrain is a reflection of centuries-old practices where individuals and companies relied on arbitration within to solve disputes. The history of commercial arbitration in the region is replete with a shaky history. Currently, the model of arbitration used in the region does not incline toward the western arbitral system. The main reasons for this are due to the role played by religion in shaping both political and legal structure. To this regard, it has a high influence in influencing the conceptualization of the process of arbitration in the region. In the context of resolving disputes in the Islam sharia law recognizes such and tahkim as the primary methods of resolving the dispute. Sulh can be compared with the Western concept of addressing disputes where the parties reach an agreement without seeking help from a third party. Contrary, within

In a recognition and enforcement of foreign arbitral awards in unity "with the rules that govern these matters, which can be divided into rules that define those procedures for foreign arbitral decisions as it will be mentioned in the following:

ECJ held that the court second seised (Austrian court) must stay proceedings despite being designated in a jurisdiction agreement until the court first seised (Italian court) determined that the Gasser case was not within the jurisdiction of that court. Furthermore, it is not allowed to ignore Art 21 even when the court first seised lasted the proceedings much longer than needed. ECJ also accounted for the importance of stringent compliance lis pendens rule that the Regulation is established based on mutual trust in which Member States consent to trust other’s legal systems and judicial institutes .

However resolving international commercial disputes via litigation by national courts entailed many complications. For instance host state may come up with legislations or policies which may affect the business and prevent the investor from getting any remedy for damages suffered; the country may not have strong and update laws to protect the investments. Also the adversarial nature of the litigation may not help to maintain good business relationship. As such arbitration which is consensual, flexible, informal, binding and enforceable can be considered as a better form of dispute resolution. The Convention on Peaceful Resolution of International Dispute signed in 1907 provided for conclusion of Bilateral Arbitration Treaties however there was no direct cause of action by the foreign national which had suffered damages. In 1965 there was a major reform by the creation of ICSID mechanism after the conclusion of Washington Convention. As a result many states entered into Bilateral Investment Treaties ‘BITS’ to promote and protect investment. As per the treaties disputes were submitted to International arbitration which were completely delocalised and Investors could seek remedy

There is a mighty desire for long-lasting peace after two major wars which meant the European integration moved towards reality and is ever-increasing. This has only led to major empowerment upon its institutions, such as The Court of Justice of the European Union (CJEU). The CJEU has taken a major involvement in the development of the European Union as it attempts to shape the legal order. Under Article 267, The Court of Justice has jurisdiction to give preliminary rulings on questions of interpretation of European law which national courts have a loyal duty to follow. Even though the CJEU is considered a prominent figure in renovating the legal order, national courts have a vital role within the application of the law. The preliminary procedure between the court of Justice and national courts have often been considered as very accommodating. Nonetheless there have been many issues pointed out may contradict this for instance there have been situations where national courts have been more hesitant in referring their cases to the Court of Justice. Prime examples which are considered as the reason behind the transforming relationship between the CJEU and national courts is the formation of Acte Clair. Although the CJEU prime intention is to seek the co-operation from national courts, by shaping this cooperation it is only placing itself in a superior position. Throughout this essay there shall discussions which will attempt to conclude whether the preliminary

In the United States, the laws responsible for governing arbitration are contained in the Federal Arbitration Act. It mainly subjects most arbitration to the judicial review of single standards regardless of whether the dispute has been categorized as either international or domestic. The first chapter contains the very basic of the provisions of the act with regards to making of the arbitration agreements and the enforcing of awards. The second chapter of the federal arbitration act is for implementing the New York convention while the third chapter holds the Panama Convention. Both the second and the third chapters are described as the International Federal Arbitration Acts. The international arbitration agreement is however subjected to the United States ‘domestic

Through the materials in this research, it can be concluded that ADR and precisely International Commercial Arbitration can be more efficient than litigation and any means of ADR, as saves time, coasts and preserves relationships between the parties. Furthermore shares the features of the other ADR methods; such neutrality, confidentiality, and speed. But it has one more advantage over other ADR methods, that by the end of the arbitral process the arbitrator will make an award which can be internationally enforced under New York Convention 1958.