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Institutional Arbitration

The Advantages of Arbitration Over Litigation

For a long time, international civil litigation and international commercial arbitration have been widely accepted as the legal approaches to resolve international civil and commercial disputes. In today’s world, the rapid development of international commercial arbitration is an indisputable fact. Institutional arbitration and litigation seem to be similar, but compared with litigation, people or enterprises are more inclined to choose arbitration to solve international commercial disputes, which can be seen that arbitration has certain advantages here.

First, the autonomy of arbitration. Arbitration is fully based on the autonomy of the parties. The parties may play a dominant role in the arbitration process and exert the greatest influence on dispute resolution. For example, the selection of arbitration institutions, the appointment of arbitrators, the determination of arbitration language and so on. This is very difficult to achieve in litigation.

Second, the professionalism of arbitration. International civil and commercial disputes often involve more complex law, economic and trade issues and technical issues. Unlike judges, arbitrators are not a relatively fixed group. The parties can appoint experts from all walks of life as arbitrators to adjudicate the case, which has obvious advantages in ascertaining the facts of the case, which is conducive to a fair and reasonable settlement of the dispute.

Third, the confidentiality of arbitration. The principle of arbitration is not to hear and adjudicate the case in public, while the principle of litigation is to hear in public, a few of which are not heard in public but the judgment is still open to the public. Therefore, this characteristic of arbitration is conducive to the parties to protect their business secrets, but also conducive to the parties to peacefully resolve the dispute in a small scope, leaving the possibility for the next cooperation.

Overview of Ad Hoc and Inst - The Advantages of Arbitration Over Litigation

Fourth, the certainty of arbitration jurisdiction. The trial of an international case often involves a conflict of jurisdiction. Therefore, if an enterprise adds an arbitration clause or concludes an arbitration agreement in the cooperation contract, it can better solve this problem, eliminate the court’s jurisdiction and establish the arbitration jurisdiction, so as to ensure that once the dispute occurs, it will not face the conflict of jurisdiction.

Fifth, the cost of arbitration and the issue of settlement. Low cost and speed are often cited as advantages of arbitration, but these are relative because different countries have different litigation systems. As for the speed of closing a case, generally speaking, arbitration only needs one trial, while litigation has two, three or final trials, which take a longer time to close a case. It may also be affected by other interfering factors.

The choice of arbitration should be rational, should take full account of the characteristics of arbitration, and seek the good and avoid the bad. Once you choose arbitration to resolve a dispute, you should cooperate with the arbitrator in good faith.