Of course, many of us have at least some idea of the litigation and how it works. However, not many people know about alternative methods of dispute resolution, such as how to resolve a commercial dispute through arbitration. Setting the same goal as litigation, arbitration is a much more informal, private, and closed process. Moreover, it can be held in any convenient place, including your office. In this article, IQ Decision UK experts outline 5 little-known aspects of arbitration that are worth knowing about.
What is more costly?
The main difference between arbitration and litigation is that the former is based on the free will of the parties. In the commercial contract, even at the stage of its drawing up, it is desirable to provide a special provision on arbitration. This provision is also called an arbitration clause. It gives the green light to arbitration in the event of a dispute between the parties. Furthermore, the clause guarantees the right to autonomy of the parties which means that the participants to the conflict can independently agree on the order and organisation of the arbitration procedure.
Arbitration has a less formal format. For example, there is no courtroom etiquette here, and it can be held in any convenient place for the parties - for example, in the office of one of the parties or in a rented hall, even in a hotel. But do not forget that the rent is paid by the parties out of pocket.
So arbitration will cost you more than litigation, because you need to pay the arbitrator's fees, which are calculated based on the amount of the claim, administrative fees, and other costs.
No judge, only an arbitrator
The arbitration is not conducted by a judge, but by an arbitrator or several arbitrators. By the way, an odd number of arbitrators is mandatory.
The arbitrator does not have to be qualified as a lawyer, or judge. On the contrary, some other qualifications can be taken into consideration. For example, in the case of a dispute in the construction industry, the parties may agree that the appointed arbitrator must have certain knowledge in engineering.
In cases where the parties are unable to independently select and appoint an arbitrator, they can seek help with international arbitration agencies may.
In many states, there is a variety of arbitration institutions and agencies. In addition to providing institutional support to both local and international arbitrators, they often provide funds for arbitration hearings, as well as various administrative services.
Please note that the parties may also agree to hold a "special" arbitration without the participation of any institution. This should be provided for in the arbitration agreement.
However, in order to properly draw up an arbitration agreement, we recommend that you contact our experienced experts for legal advice on the arbitration procedure.
As a rule, almost all trials are public and open. Moreover, some court decisions are publicly available, which can be found through online search. And lawsuits are usually heard in open court. As for arbitration, it is a closed process in which only these parties participate. For this reason, the laws governing arbitration provide that neither party may disclose any information relating to the arbitration proceedings or the decision rendered in the course of such proceedings.
Arbitral award is final and binding on the parties and may be revoked only in exceptional cases. For example, when the decision was made by fraud.
We have provided a brief analysis of some of the key principles of arbitration, compared to litigation. Despite the fact that the speed and efficiency of litigation has increased significantly in recent times, arbitration remains a sought-after and attractive method to resolve commercial disputes peacefully, especially in the areas where confidentiality and unique industry knowledge are particularly important. Learn more about arbitrage opportunities from IQ Decision UK professionals. Our company is also ready to provide arbitration services in the UK.