ARBITRATION AND LITIGATION

Arbitration and Litigation



Arbitration and Litigation

Arbitration

Arbitration is a type of alternative dispute resolution. It has been referred to as litigation without wigs. Arbitration is often referred to as an substitute to litigation. However, they share the same fundamental premise. A third party is responsible for deciding any dispute. In arbitration, the parties present their dispute to an impartial arbitrator who will make a binding decision on the parties. Arbitration takes place as a result of an agreement in the contract between the parties requiring disputes to be submitted to arbitration. Parties may also agree to arbitration after a dispute arises even in the absence of a contract provision.

Some commercial contracts contain an alternative to litigation and offer the parties arbitration. Arbitration clauses confer jurisdiction on an individual or group of individuals, namely the arbitrators who determine the issues in dispute. The rules of the fight may also be incorporated into the agreement such as for example the Construction Industry Model Arbitration Rules. The different rules require their own consideration and too often at the point of drafting the contract their proper scrutiny is overlooked. The arbitration process can be very effective when used by experienced practitioners willing to agree the rules and before a respected and able arbitrator with knowledge of the subject matter in dispute. The advent of adjudication albeit supposed to produce only a temporarily binding outcome has in fact caused a huge decline in the number of domestic arbitrations as the parties often accept the adjudicators decision as final.

International Disputes

Internationally arbitration is however widely used as it provides a nationally impartial arbitrator to an international dispute and the awards made are readily enforceable in over 130 jurisdictions as a result of the 1958 New York Convention. Great care must be taken in considering choice of law ...