• Law -> Civil and Commercial Law

• 0 Comment

What are the advantages of using arbitration in civil and commercial disputes?

Andy Lukash

Arbitration is a dispute resolution mechanism whereby a neutral third party, the arbitrator, is selected by the parties involved to hear and decide on the dispute. The decision of the arbitrator is binding and final, subject only to limited recourse to the courts. In civil and commercial disputes, arbitration has become increasingly popular because of the numerous advantages it offers.

Firstly, arbitration is a fast and efficient process for resolving disputes compared to traditional court proceedings. The parties to the dispute have the freedom to choose the arbitrator, the venue, and the procedure to be followed, which allows them to tailor the process to their unique needs. This, in turn, leads to quicker resolution of the dispute, thereby saving time and resources.

Secondly, arbitration offers confidentiality, privacy, and flexibility. Unlike court proceedings, arbitration proceedings are conducted in private and not in open court, thus protecting the parties' confidentiality and privacy. This is especially important in commercial disputes where companies may not want to disclose confidential information in open court. Additionally, flexibility in the arbitration process allows parties to choose how to present their case, including the choice of language and the rules of evidence to be followed.

Thirdly, arbitration offers a more cost-effective alternative to court proceedings. The parties involved in the dispute save costs on legal fees, court fees, and other expenses as arbitration does not have the same formalities as court proceedings. This is especially beneficial for small businesses and individuals who cannot afford the high costs of litigation in court.

Fourthly, arbitration offers a greater degree of expertise and specialization. Parties involved in disputes can choose an arbitrator who has domain-specific knowledge of the subject matter in dispute. This expertise and specialization can lead to a more informed and accurate decision than that which may be made by a judge who may not be familiar with the subject matter.

Finally, arbitration awards are enforceable internationally through the New York Convention. This means that an arbitration award in one country can be enforced in another country, which provides a level of certainty and predictability in international business transactions. This is especially important for businesses that operate in multiple jurisdictions.

In conclusion, arbitration is a popular and effective alternative dispute resolution mechanism for civil and commercial disputes. Its advantages include efficiency, confidentiality, flexibility, cost-effectiveness, expertise, and international enforceability. With these advantages, it is no surprise that arbitration has become the preferred method of dispute resolution for many businesses and individuals.