As an alternative to litigation parties to disputes are turning to
arbitration to resolve their disputes.
Some of the potential advantages and disadvantages of arbitration are:
Arbitration is more flexible than
court proceedings and arbitration procedures can be adopted to suit
the parties and the circumstances of the dispute.
Arbitration can be less expensive
and quicker than litigation.
Technical matters can be referred
to an arbitrator with expert knowledge in the field of the dispute.
The proceedings and results of
arbitration are private and not in the public domain.
An arbitration award is more
easily enforced than a court award in foreign jurisdictions.
Judges are normally more
experienced in acting in a judicial capacity and are more familiar
with the details of the law.
The right of appeal is limited.
Third parties can normally only be
joined in the proceedings where the parties consent to this.
Arbitration incurs expenses for
the venue of the hearing and the cost of the arbitrators whereas the
cost of using the court system is normally minimal.
Arbitration is a consensual form of dispute resolution allowing the
parties to determine how they wish the proceedings to be conducted,
subject to any limitations the arbitration rules and laws governing the
arbitration may impose on the parties.
The arbitration procedures normally consist of the following:
request to commence the arbitration by the Claimant.
to the request by the Respondent.
Appointment of the arbitrators.
preliminary meeting held with the parties to determine the issues in
dispute and the procedures for the arbitration.
submissions by the parties if required.
Submission of witness statements and a hearing (if a hearing is
Submission of closing statements by the parties.
Publication of the award by the arbitrators.
Once an award has been made the parties are required to comply with the
terms of the award. Under most arbitration rules there are time limits
within which challenges on the award can be made. Should a party not
voluntarily comply with the award the other party can normally seek
enforcement of the award through the courts in the place of enforcement.
Management of the Arbitration:
The effectiveness of arbitration depends largely on the arbitratorís
experience and ability to manage the dispute. The arbitrators are
provided with a number of powers manage the arbitration either in the
arbitration agreement, the chosen arbitration rules of the law chosen to
govern the arbitration. The choice of the arbitrators is one of the most
important decisions the parties will make in an arbitration.