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Arbitration for International Contracts

By Zach Arnold | January 26, 2022

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Parties to international commercial disputes often choose arbitration because: Parties often also add rules on contract law, number of arbitrators, place of arbitration, and language of arbitration. There are several practical reasons to prefer arbitration to going to court. In general, it takes less time to go through arbitration than it does to go to court, although critics (especially litigants) like to point out arbitrations that have dragged on and are expensive. Of course, the key to maintaining the process in a timely manner is effective monitoring and management of the process. ICC arbitration can be used as a forum for the final decision of a dispute after an attempt to resolve it through other means such as mediation. Parties wishing to include in their contracts a multi-level dispute resolution clause combining ICC arbitration and ICC mediation should refer to the MODEL CLAUSES of the ICC Mediation Rules. However, in high-value international disputes, it is customary to provide for the appointment of an arbitral tribunal composed of three arbitrators. A sole arbitrator is appointed by a third party if the parties to the dispute cannot agree, but if there are three arbitrators, each party may appoint one of the arbitrators who may ensure that at least one of the arbitrators is familiar with the national or legal culture of the country in which the party in question is based. It should be noted that in international arbitration, such an arbitrator may not act as counsel for the party who appointed him or her in the deliberations of the arbitral tribunal. Some also feel that three arbitrators are more likely to make the “right” decision than a single arbitrator; This is important because there are generally few grounds to appeal or challenge an arbitral award. Typical arbitration agreements are very short.

For example, the ICC Model Arbitration Clause simply reads as follows: The Institute of International Arbitration, headed by Emmanuel Gaillard, was established in 2001 under the auspices of the French Arbitration Committee (CFA) to promote exchange and transparency in the international commercial arbitration community. The Association for International Arbitration is a non-profit organization founded by Johan Billiet in Paris in 2001 that provides information, training and education activities, but does not appoint arbitrators. Here, the answer of the eternal advocate applies: it depends. Most major arbitration institutions – such as the International Chamber of Commerce and the International Center for Dispute Resolution (the international branch of the American Arbitration Association) – make available on their websites draft clauses that can be incorporated into a contract. Adaptation. Unlike the rules of national courts, which are binding on all parties who appear before a court, in international arbitration, the parties can tailor the proceedings to their needs. There is no similar international mechanism for the enforcement of court decisions abroad. For example, it can be very difficult to take a judgment from a U.S.

court and have it enforced abroad. So while an arbitration award increases the likelihood that your rights will be enforced in 158 different countries, a U.S. decision is often just a piece of paper outside our borders. As mentioned earlier, the institution also assumes administrative responsibility for arbitration and deals with the fundamental aspects of arbitration. The fees and expenses of arbitration are regulated with varying degrees of certainty. The AAA has developed the ClauseBuilder online tool® – a simple and self-directed process – to help individuals and organizations develop clear and effective arbitration and mediation agreements. To fill the void when the parties to an international agreement have difficulty agreeing on an arbitration institution, some international arbitration specialists recommend using an arbitration clause that allows two arbitration institutions in the same city. These clauses generally allow the party initiating the arbitration to choose the institution of arbitration. [19] Other combinations of services are also possible.

For example, arbitration can be used as a recourse to expertise or dispute resolution bodies. Parties using ICC arbitration may also provide for recourse to the ICC International Centre for Alternative Dispute Resolution to obtain an expert`s proposal if an expert opinion is required during the arbitration. Our local companies have a global reach and enter into mergers, acquisitions, manufacturing agreements, licensing agreements, joint ventures and research and development partnerships with companies and institutions around the world. Such global partnerships offer countless opportunities. The first step is to look at what the parties want to achieve. Is applicability or confidentiality the key factor? Or is arbitration the only viable way to resolve disputes, given that two or more international parties are involved? Some of these questions give rise to independent points of formulation, others are found in decisions, for example, . B on the arbitration rules to be chosen. Often, parties cannot predict exactly what types of disputes may arise and how their adversaries might react to them. However, you can get a general idea and, taking into account the potential threats, the parties can tailor the arbitration mechanism to the likely types of disputes. For example, if your counterparty is a state-owned enterprise from a country where so-owned enterprises are known to seize every opportunity to delay proceedings, arbitration administered by a well-known international arbitration institution may be preferable to ad hoc arbitration. International arbitration is the resolution of contractual disputes by an arbitrator or arbitral tribunal instead of the resolution of a dispute in court.

International arbitration is similar to national court proceedings, but instead of taking place before a national court, it takes place before private judges called arbitrators. It is a consensual, neutral, binding, private and enforceable means of settling international disputes, which is generally faster and less costly than domestic judicial proceedings. Although the exact procedures of international arbitration depend on the language of the contract, the arbitration rules chosen, the law of the seat of arbitration and the arbitrators chosen, the procedures are generally as follows: the parties must also take into account all factors that may affect the applicability of the clause under the applicable law. This includes any mandatory requirements that may exist at the place of arbitration and at the intended place(s) of performance. Procedural law in arbitration is different from the applicable law of the contract: it is the law under which arbitration operates (e.g. B the UNCITRAL Model Law). .

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