On another point, because individuals and/or states agree to submit their issues to international arbitrators, whenever there is a dispute and an arbitrator decides the issue, the decision is made enforceable in the international arena. So, at least when we have parties of equal bargaining power, it seems that arbitration might make states and private parties more responsible and more accountable. On the other hand, international arbitration is becoming increasingly costly and takes an increased amount of time to resolve matters. Worse is the fact that an arbitrator cannot directly enforce awards without the help of a judge, so if there is a losing party unwilling to pay an award, the winning party may have to wait more time to get its money. Sadly, the parties end up seeing the person they were trying to avoid in the first place – a judge.
Tuesday, August 30, 2011
Why Arbitrate?
Redfern & Hunter have pointed out that the field of international arbitration is ever-changing and ever expanding. Most parties enter international arbitration because they have agreed to an arbitration clause. This practice seems to have extended to the international government sector as well, though the reading does not directly say this. It says that states have started using “agreements to arbitrate” when making treaties with one another, stipulating that any disputes will be resolved through international arbitration. With emerging technologies and “increased complexity of international trade” bringing in more international parties into the picture, it is no surprise that international arbitration keeps expanding.
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4 comments:
I also found that to be very interesting: that if a party does not cooperate with the award that is given by the arbitrator, the winning party must go to a judge to demand enforcement. However, it was comforting at least to know that most countries' courts recognize international arbitration awards and will readily enforce them.
Regardless, it would be nice if there was a more direct process for the enforcement of the awards. Hopefully though it is not common for parties to refuse to cooperate, especially since they have to have actively agreed to the arbitration in the first place.
I think the increasing costs of international arbitration and the usual long amounts of time needed to resolve the disputes are two of the most important elements that parties consider whether determining to enter into an arbitration. I am interested in learning how to gage whether one things an actual trial or an arbitration would take longer. In the legal world, time is money, and I certainly would be dissuaded from entering into many arbitration agreements if I found out they took longer than actual trials.
Faster, better, cheaper are challenged more and more. On the other hand, confidentiality and distrust of the other sides legal system still seem to be winning out.
I'd be interested in exploring ways we as arbitration-clause writers can minimize the disadvantages, and increasing inefficiencies, of arbitration. The development of a more-or-less private international system of law is exciting; it'd be a pity to see it fall on hard times.
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