International arbitration: procedures and advantages

International arbitration: procedures and advantages

International arbitration is one of the alternative dispute resolution mechanisms in international trade. In the event of a discrepancy or breach of the purchase-sale contract by one of the parties (for example, in the face of the buyer’s refusal to pay), the affected party has the possibility of resorting to a specialized body to seek a quick and friendly solution. However, going this way is only possible if a clause on the subject is included in the purchase-sale contract. Its inclusion, therefore, is the most recommended.

One of the most important instances of international arbitration is the International Court of Arbitration. This service has been in operation since 1919 and is provided by the International Chamber of Commerce (ICC), which brings together more than 130 member countries around the world.

Today we will talk about how arbitrage works and what are the advantages, so read on if you want to know more.

How is the international arbitration process?

The members of the Court are responsible for ensuring the application of the ICC’s international arbitration rules and for supervising the arbitration process. What the Court does not do is decide on the disputes that come before it. Instead, it appoints third parties, called “arbitrators”, who are international jurists of recognized level, who study the case and finally give a verdict that has to be complied with by the parties.

It begins with the presentation of the demand for the initiation of the arbitration process and the notification to the defendant for, later, the answer to the demand takes place. Next, the appointment of the arbitrators is made and their appointment is communicated.

In these phases of international arbitration, in addition to the interested parties, the General Secretariat of the Arbitral Court, the Arbitral Court, and the Arbitral Court (the arbitrators) intervene.

After the provision for expenses has been paid, the Secretary-General delivers the file to the arbitral tribunal. When the arbitral Tribunal receives the file, and once the parties have been heard, the arbitration proceedings are instructed through the “Mission Statement”, a document in which its mission is specified and which must be sent to the arbitral Court within two months. Likewise, it will communicate to the Court the provisional calendar that it intends to follow.

When the arbitral Court receives the “Mission Statement”, it proceeds to approve the decision made by the arbitrators. The process ends with the issuance of the arbitration award or final decision, which cannot be appealed (as is the case with the judgment of a Court of Justice) since there is no “second arbitration instance”. However, before the issuance of the final award, the parties may request any correction or supplement to it.

Advantages of arbitration

Among the main advantages associated with international arbitration as a mechanism for the resolution of commercial disputes, we highlight the following:

  • The simplicity of the dispute resolution procedure.
  • Speed: in general, less time is required than in judicial processes.
  • Flexibility: the parties have the right to choose between a single arbitrator or an arbitral tribunal composed of several arbitrators, depending on the complexity of the dispute.
  • Neutrality: the arbitral Tribunal must constitute a neutral position for the resolution of disputes, being detached from the judicial bodies of the countries of which the parties involved are natural.
  • High technical quality: given the possibility of appointing arbitrators specializing in the subject matter of the dispute, the arbitrators usually have greater availability of time to study the case under dispute, which may result in greater efficiency, as well as robustness and argumentative support of the award.
  • Confidentiality: the parties can opt for absolute confidentiality of the entire arbitration process (as opposed to the general principle of publicity of judicial processes).
  • Default cost: known from the beginning of the process.

After knowing its operation and its advantages, it is not surprising that international arbitration has consolidated itself as a mechanism for extrajudicial dispute resolution in foreign trade operations.

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