Topic 7: International Commercial Arbitration Overview

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Questions and Answers

What is one of the key features of arbitration?

It requires court intervention.

It can be appealed in every case.

It lacks flexibility.

It is a voluntary process. (correct)

Arbitration awards can always be appealed in higher courts.

False

What is the primary purpose of an arbitration agreement?

To resolve disputes through arbitration rather than courts.

Arbitration is often used in __________ settings where parties from different countries wish to resolve disputes.

international commercial Signup and view all the answers

Match the following doctrines with their descriptions:

Separability Doctrine = Arbitration agreement can be valid even if the main contract is invalid. Kompetenz-Kompetenz Doctrine = Arbitrators can decide on their own jurisdiction and the validity of the arbitration agreement. Signup and view all the answers

Which of the following is NOT typically a positive effect of arbitration?

Ability to appeal decisions. Signup and view all the answers

Arbitrators are responsible for ensuring that the arbitration process is fair and impartial.

True Signup and view all the answers

What written requirement do most jurisdictions impose regarding arbitration agreements?

Arbitration agreements must be in writing. Signup and view all the answers

What is the primary duty of arbitrators in terms of their conduct?

To remain impartial and avoid bias Signup and view all the answers

Arbitrators must have conflicts of interest with the parties they serve.

False Signup and view all the answers

What is the decision issued by the arbitrators called?

award Signup and view all the answers

An arbitration process usually requires an odd number of ______ to avoid deadlocks.

arbitrators Signup and view all the answers

Match the arbitration stages with their descriptions:

Preliminary Meeting = Timeline and procedural rules agreement Exchange of Statements = Submit claims, defenses, and evidence Hearing = Parties present their cases Award Issuance = Final, binding decision Signup and view all the answers

Which of the following is a feature of arbitral awards?

They must explain the basis for the decision Signup and view all the answers

The New York Convention governs the enforcement of arbitral awards.

True Signup and view all the answers

What type of arbitration offers quicker resolutions compared to court litigation?

international arbitration Signup and view all the answers

Arbitration is often chosen for international commercial disputes because of its ______ and enforceability.

efficiency Signup and view all the answers

Which of the following is NOT a guarantee in the arbitration process?

No evidence presentation Signup and view all the answers

Study Notes

International Commercial Arbitration

Arbitration is a private dispute resolution method agreed upon by parties, often used in international business conflicts for neutral and efficient solutions. It involves an independent tribunal deciding cases instead of courts.

Key Features of Arbitration

Voluntary: Both parties must agree to arbitration, often through contract clauses or separate agreements.
Non-State Authority: Arbitration decisions (awards) are legally binding like court judgments, made by private arbitrators, not judges.
Binding and Final: Arbitration awards are typically final and not easily appealed. Appeals are restricted to very specific circumstances.
Cost and Speed: Arbitration can be faster than court, but initial costs might be higher due to arbitrator and institution fees.
Flexibility: Parties control arbitration procedures, arbitrator selection, and rules.

Arbitration Agreement

Foundation: The agreement outlines dispute resolution through arbitration instead of courts.
Forms: Included as a clause in a main contract or as a separate agreement after a dispute arises.
Separability Doctrine: Arbitration agreement validity is separate from the main contract's validity – even if the contract is invalid, the arbitration agreement may still be enforced.
Kompetenz-Kompetenz Doctrine: Arbitrators decide on their own jurisdiction, including the agreement's validity and scope.
Legal Effects: Parties are bound to arbitrate, and courts cannot intervene in disputes covered by a valid arbitration agreement.
Form Requirements: Agreements are usually written. Some jurisdictions have stricter requirements, especially regarding consumer protection.

Duties of Arbitrators

Appointment: Parties or arbitral institutions/courts appoint arbitrators. Odd numbers (one, three) prevent deadlocks.
Key Duties: Arbitrators must be impartial, independent, apply relevant law or specified legal standards, remain confidential, and conduct their duties diligently to produce reasoned decisions.

Arbitral Proceedings

Initiation: Begins when one party requests the arbitral tribunal or institution. Procedures and rules often specified in the arbitration agreement or assigned by a selected institution.
Key Stages: Preliminary meetings, statement exchanges, hearings, deliberations, and award issuance.
Procedural Guarantees: Parties have the right to be heard, fair treatment, and a transparent process.

International Arbitral Awards

Features: Awards are legally binding and enforceable like court judgments. Awards must justify their rulings, unless agreed otherwise. Awards are often more easily enforceable than foreign court decisions.
Enforceability: Primarily enforced through the New York Convention (1958) in over 160 countries. National courts enforce awards except in cases of procedural irregularities or violations of public policy.
Annulment: Awards can be annulled under rare circumstances, such as lack of jurisdiction, procedural violations, or public policy violations.

Arbitration vs. Court Litigation

Trade-offs: Arbitration offers confidentiality, neutrality, flexibility, but may lack court-provided procedural safeguards. Faster resolution in many cases, but limited appeals, and higher initial costs can be disadvantages.
Conclusion: Arbitration remains a popular choice in international commercial disputes balancing efficiency and enforceability.

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Description

This quiz covers the fundamentals of international commercial arbitration, a crucial mechanism for resolving business disputes. Learn about key features like the voluntary nature, binding decisions, and the role of arbitration agreements. Test your understanding of how this private dispute resolution method operates efficiently and effectively in the global business arena.