International arbitration

International arbitration is the established method for resolving disputes between parties to international commercial agreements. As with arbitration generally, it is a creature of contract, i.e., the parties' decision to submit any disputes to private adjudication by one or more arbitrators appointed in accordance with rules the parties themselves have agreed to adopt, usually by including a provision for the same in their contract. The practice of international arbitration has developed so as to allow parties from different legal and cultural backgrounds to resolve their disputes, generally without the formalities of their underlying legal systems.

Main Features of International Arbitration

The main reason that parties elect to have their international disputes resolved through arbitration is to avoid the uncertainties associated with litigation in national courts and the resulting need to enforce judgments in a foreign court.

As with the many domestic variants that exist in virtually all of the world's industrialized countries, international arbitration is not tied to one party's full jurisdictional procedure, unless the parties so elect and such election does not violate the fundamental due process or order public of a jurisdiction with interest in a party or subject matter in the dispute. International arbitration is sometimes described as a hybrid form of dispute resolution; consider the International Bar Association (IBA)'s Rules on the Taking of Evidence in International Commercial Arbitration. [http://www.ibanet.org/images/downloads/IBA%20rules%20on%20the%20taking%20of%20Evidence.pdf] These rules neither adopt absolutely the common law jurisdictions' broad disclosure procedures (Discovery), nor follow fully the civil law in eliminating entirely the ability to engage in some disclosure-related practices. As a hybrid, arbitral rules blend common and civil systems so that parties may narrowly tailor disclosure to the agreement's particular subject matter.

As aside about the IBA Rules, David Rivkin [http://www.debevoise.com/attorneys/detail.aspx?id=51f057f6-8110-4477-a41b-59e72f9138b5] , who chaired the committee that drafted the rules, has noted that the wide adoption of these rules in international arbitration has led in practice to an unexpected use by common law practitioners to limit disclosure and by civil law practitioners to expand it. With a possibly more intuitive cause and practical effect, arbitral tribunals will often read party election of IBA Rules as an election most akin to USA-style Discovery. This is hardly surprising given the Rules' language and the IBA's close ties through the years to the American Bar Association (ABA).

Rules of evidence represents just one example of the different practice that applies to international arbitration, and which distinguishes it from provincial forms of arbitration rooted in the procedures of a particular legal system. Similarly, international arbitral practice has given rise to its own non-country specific standards of ethical conduct which are believed to apply in international proceedings and, more to the point, to the arbitrators who are appointed to conduct them. [http://www.ibanet.org/images/downloads/guidelines%20text.pdf]

Differences with Domestic Arbitration and Mediation

International arbitration is a significant variant of the practice in many countries of arbitration, from which it is derived and shares many features. It is not just the fact that international arbitration arises in the context of international contracts that makes it different. In the international dispute resolution community, it is widely accepted to be a different animal entirely, involving different practices and rules, and being represented by a different community of arbitrators and legal practitioners.

Although the procedural laws of many countries provide for "international" arbitrations to take place, an "internationalized" form of a provincial or domestic arbitration practice should not be confused with genuine international arbitration, which can be fairly said to exist outside and beyond the rules of any particular jurisdiction. (See Redfern, Hunter, Blackaby & Partasides, Law and Practice of International Commercial Arbitration (2004), at 1-21, "an international arbitration will usually have no connection with the state in which the arbitration takes place, other than the fact that it is taking place on the territory of that state.").

In the international context, it is also worth making a firm distinction between Arbitration and Mediation, which are both sometimes characterized as forms of ADR (Alternative Dispute Resolution). In countries where mediation is new or struggling to be introduced as a concept, this association has given rise to the misleading impression that mediation is a form of non-binding arbitration, with the arbitrator "proposing" or suggesting outcomes based on an assessment of the parties' rights. In fact, arbitration and mediation are fundamentally different: the former is a determination of legal rights, the latter a form of facilitated negotiation which looks beyond rights and allows the parties to focus on their underlying interests. The one leads to a binding determination (arbitration), the other only in the event the parties agree to settle their dispute on mutually satisfactory terms (mediation).

The Advantages of International Arbitration

For international commercial transactions, parties may face many different choices when it comes to including a mechanism for resolving disputes arising under their contract. If they are silent, they will be subject to the courts of wherever a disaffected party decides to initiate legal proceedings and believes it can obtain jurisdiction over the other party. This may not sit well with parties that need to know at the time of entering into their contract that their contractual rights will be enforced. The alternative to silence is to specify a method of binding dispute resolution, which can be either litigation before the domestic tribunal of one of the parties or arbitration. If the parties choose to resolve their disputes in the courts, however, they may encounter difficulties. The first is that they may be confined to choosing one or the others' courts, as the courts of a third country may decline the invitation to devote their resources to deciding a dispute that does not involve any of that country's citizens, companies, or national interests. The second, and perhaps more significant difficulty, is that judicial decisions are not very "portable" in that it is difficult and sometimes impossible to enforce a court decision in a country other than the one in which it was rendered.

Neutrality and Enforceability of Arbitration Awards

The ability to resolve disputes in a neutral forum and the enforceability of binding decisions are often cited as the main advantages of international arbitration over the resolution of disputes in domestic courts. And there is solid legal support for this view. An international award originating in a country that is a party to the New York Convention of 1958 may be enforced in any other country that is also a signatory, as if they were rendered by domestic courts. Here is an example of this important concept: assume that parties from countries A and B have agreed to resolve their disputes in country C, and all three countries are parties to the New York Convention. This will mean that even though the arbitration will take place in country C, the resulting award can be enforced in the countries A (or B), as if it were a court decision rendered in the domestic courts of that country. (By contrast, there is no equivalent treaty for the international recognition of court decisions, although a draft treaty was initiated in 2005.)

Thus, parties to international contracts can decide to site their disputes in a third, neutral country, knowing that the eventual award can be easily enforced in any country that is a signatory to the New York Convention, which has been ratified by a significant majority of commercial nations, with notable exceptions like Qatar, which not having ratified the New York Convention cannot be assumed to give effect to arbitration decisions rendered in other countries. An international award therefore has substantially greater executory (legal) force than a domestic court decision.

International Commercial Arbitration

The resolution of disputes under international commercial contracts is widely conducted under the auspices of several major international institutions and rule making bodies. The most significant are the International Chamber of Commerce (ICC), the International Centre for Dispute Resolution (ICDR), the international branch of the American Arbitration Association), the London Court of International Arbitration (LCIA), and the Singapore International Arbitration Centre (SIAC).

Association of international arbitration (AIA)

The association for international arbitration (AIA) was founded in 2001 in Paris. The AIA works towards promotion of ADR in general and Arbitration in particular, as a means of dispute resolution and strives to bring together the global community in this field, namely the professionals such as Judges, Lawyers, Arbitrators, Mediators or as Academicians as well Research Scholars and Students. With this unique blend of people, it is our endeavor to inculcate an interest in ADR, not only in the professional sphere but also create an awareness and interest in it among budding professionals in law schools/universities all around the globe. In the past AIA organized a Conference on critical issues raised in the “The Commission of The European Communities” Green Paper on Alternative Dispute Resolution in Civil and Commercial Law (Paris 2003).

For the present, the Association for International Arbitration would work from the intellectual aspect and endeavor to bring together all interested professionals in this field and work towards finding ways and means of promoting cooperation and understanding between them, to the common benefit of all. The next step in the future is a new conference about “Interim Measures in International Commercial Arbitration”on 5 October 2007, at the Catholic University of Brussels.

International Investment Arbitration

The last few decades have seen the promulgation of numerous Bilateral Investment Treaties (referred to as BITs), as well as Multilateral Investment Treaties, which are designed to encourage investment in signatory countries by offering protections to investors from other signatory states. One of the significant feature of BITs is that they provide investors with the ability to resolve disputes with the host states before the International Centre for the Settlement of Investment Disputes (ICSID).

ee also

*Arbitration
*Arbitration award

*American Arbitration Association
*London Court of International Arbitration
*International Chamber of Commerce
*International Centre for the Settlement of Investment Disputes
*International Bar Association
*United Nations Commission on International Trade Law
*Emmanuel Gaillard
*home page association for internationale arbitration http://arbitration-adr.org/

External links

International Arbitration Resources

* [http://law.pepperdine.edu/straus/ Straus Institute for Dispute Resolution at Pepperdine University School of Law]
* [http://www.kluwerarbitration.com/ Kluwer International Arbitration]
* [http://www2.lib.uchicago.edu/~llou/intlarb.html/ International Commercial Arbitration Resources]
* [http://www.arbitration-links.de/ Arbitration Links] Links to arbitration institutions, rules and laws in the field of international commercial arbitration and investment arbitration]
*iai.paris.com [http://iaiparis.com/] A web-based forum for international arbitration, with a publicly-accessible database of leading international arbitration practioners and arbitrators
* http://www.transnational-dispute-management.com (also with access to [http://www.transnational-dispute-management.com/ogemid/ OGEMID] , internet discussion forum on international dispute resolution, in particular investment disputes)
* [http://www.iisd.org/investment/itn/ Investment Treaty News] ITN is a free electronic reporting service dedicated to reporting on investor-state lawsuits arising under investment treaties)

International Arbitration Institutions

* [http://www.adr.org/International/ International Centre for Dispute Resolution (ICDR)]
* [http://www.iccwbo.org/court/ Court of Arbitration of the International Chamber of Commerce (ICC)]
* [http://www.hkiac.org/ Hong Kong International Arbitration Centre (HKIAC)]
* [http://www.lcia-arbitration.com/ LCIA Court of Arbitration]
* [http://www.siac.org.sg/ Singapore International Arbitration Centre (SIAC)]
* [http://www.acica.org.au/ Australian Centre for International Commercial Arbitration (ACICA)]
* [http://www.uncitral.org/ United Nations Commission on International Trade Law (UNCITRAL)]
* [http://www.arbitration-adr.org/ The Association for International Arbitration(AIA)]
* [http://www.borerut.com/e-enter.aspIsraeli Institute of Commercial Arbitration ]