• Disputes
  • August 26, 2021

What Is Arbitration?

Arbitration is the most formal of the alternative dispute resolution methods (ADR) and it is an effective way of resolving commercial disputes, especially if they involve a cross-border element.  This is thanks to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (NY Arbitration Convention) that provides a regime for the enforcement and recognition of arbitral awards within contracting nations (which include most of the EU States, China, India, and the United States).

What is an Arbitration Agreement?

The option to arbitrate a dispute will be contained in an Arbitration Agreement between your organisation and other parties to the dispute. The Arbitration Agreement confirms that certain disputes may be referred to Arbitration and can form part of the original commercial contract or be entered into after the dispute manifests.  

An Arbitration agreement will determine key elements of the process. For example:

  • How the Arbitrator/s is selected.
  • If there will be one Arbitrator or a panel of three.
  • Which jurisdiction the proceedings will be held in.
  • If the arbitration will be conducted using the rules of a recognised arbitral institution such as the International Chamber of Commerce (ICC), the Singapore International Arbitration Centre (SIAC), or the London Court of International Arbitration (LCIA).

One important point to mention is that like all alternative dispute resolution methods, arbitration is voluntary. Therefore, there is little point in agreeing to the process if you have no plans to abide by the Arbitrator’s final decision.

What are the advantages of Arbitration?

The main advantages of arbitration include:

  • The proceedings are private and details of any award confidential.
  • Compared with a Court decision, thanks to the NY Arbitration Convention it is often easier to enforce an Arbitration Award in another jurisdiction.
  • In complex, technical cases, parties to the dispute can select Arbitrators with specialist knowledge if required.

How does Arbitration work?

Similar to litigation, the Arbitrator examines evidence and procedural matters, and witnesses can be cross-examined. Despite this, arbitration is usually less formal, cheaper, and quicker than litigation.

Once all the evidence is presented, the Arbitrator will make a decision, known as an Award.

Is an Arbitration Award legally binding?

Yes, any Arbitration Award made by an Arbitrator is legally enforceable in the same way as a Court judgment.

Parties to an Arbitration may agree a settlement between themselves.  If this occurs, the terms may be incorporated into an award to facilitate enforcement (known as an "agreed award" or an "award by consent").  

Unless the Arbitration Agreement or applicable arbitration rules provide otherwise, the award must:

  • Be in writing
  • Be signed by all the Arbitrators
  • Contain reasons for the award (unless it is an agreed award)
  • State the seat of the arbitration and the date that the award is made

In summary

Arbitration is a robust form of Alternative Dispute Resolution. Our Solicitors can advise and represent you before, during, and after domestic or international proceedings, ensuring your best interests are fully protected.

You can get legal assistance from LawBite

Our Arbitrators can support your business's needs. Whether you are a small business starting out or a more mature enterprise, it is likely that a dispute will arise that needs to be addressed.

Our Lawyers are experts in Arbitration. They can:

  • Draft Arbitration clauses to go in contracts
  • Help persuade the other party to accept Arbitration
  • Help you source an accredited third party Arbitrator
  • Help you prepare for the Arbitration
  • Attend with you throughout any meetings or hearings with the Arbitrator
  • Help you present or defend the claim
  • Help you negotiate a settlement of the claim with the other side on the best terms for you
  • Provide a neutral Arbitrator to handle the Arbitration (as an alternative to acting for you)

LawBite online lawyers and online solicitors provide expert legal advice on all commercial and business matters. Book a no-commit 15-minute call with our friendly lawyers today or learn more by joining LawBite for free.

Additional useful information

What is dispute resolution?

Three tips to help you negotiate like a pro

In closing

Nothing in this article constitutes legal advice on which you should rely. The article is provided for general information purposes only. Professional legal advice should always be sought before taking any action relating to or relying on the content of this article. Our Platform Terms of Use apply to this article.

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