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In a globalised economy, arbitration presents an appealing alternative to litigation as a means of resolving commercial disputes. Generally, it offers parties lower costs, greater efficiency and speed, as well as the ability to choose expert arbitrators for specialised disputes. Neutrality and confidentiality are also attractive to parties involved in cross-border contracts.

UNITED STATES

Three Crowns

“For contracts involving parties from different countries, arbitration’s neutrality makes it an attractive option. For a variety of reasons, neither party may feel comfortable litigating in the home courts of the other’s country, and therefore may seek a neutral forum to resolve their disputes. It is often neutrality, rather than efficiency, that is the primary attraction of arbitration for parties to cross-border contracts. In intra-state disputes, by contrast, it is arbitration’s procedural flexibility and the prospect of quicker and cheaper resolution of disputes that make it an attractive option.”

BRAZIL

Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates

“Parties often choose arbitration over litigation in Brazil due to its confidentiality, the expertise of the arbitrators and ease of enforcement. Under Brazilian law, with the exception of certain disputes involving state and state-owned entities, a court must seal the record of arbitrated disputes where the parties have agreed on confidentiality. Also, the Brazilian arbitration community has matured significantly, and clients can expect a great deal of experience and sophistication from the Brazilian arbitration bar and its arbitrators. Finally, reasonably well-defined rules for enforcement of an arbitration agreement, as well as awards, make for proceedings that tend to be more predictable.”

UNITED KINGDOM

Walker Morris LLP

“Depending on the nature and circumstances of the dispute, confidentiality can be a particularly important consideration. Under English law, the parties and tribunal are under an implied obligation to maintain the confidentiality of the hearing itself, the documents generated and disclosed during the proceedings, and the award produced at the end of the dispute. In contrast, the open justice principle means that court hearings, judgments and orders are generally public and certain documents may be disclosed to non-parties.”

FRANCE

FLV & Associés

“Arbitration has been claimed to be a faster and cheaper procedure than court litigation. This is not necessarily true, as complex arbitration cases can take years before an award is rendered, consequently leading to significant costs and expenses, including legal counsel, arbitrators, the arbitration institution, experts and witnesses. Nonetheless, arbitration grants greater freedom and control over the proceedings compared to court litigation. Parties can appoint their own arbitrators with specific expertise who will be better suited to understand technical aspects of a dispute.”

SWEDEN

Advoktfirman Hammarskiöld & Co

“Some of the key reasons for parties choosing arbitration are typically that arbitral awards are internationally enforceable, pursuant to the New York Convention, and that the proceedings are confidential, fast and flexible. Particularly when it comes to matters that are complex or which require specific expertise, the parties’ influence over the appointment of arbitrators is also important as it ensures that the dispute is adjudicated by people with appropriate knowledge and experience for the case in question. In international relations, arbitration also has the advantage of being perceived as more neutral than court litigation taking place in the home jurisdiction of one of the parties.”

GERMANY

Weil, Gotshal & Manges LLP

“In our experience, the appeal for parties choosing arbitration over litigation is the confidentiality of arbitral proceedings. In M&A transactions especially, parties usually have a vested interest in keeping information about the deal or about the existence of a dispute private, rather than it being public knowledge. While it is, in principle, possible under German law to exclude the public from proceedings before a national court, this is only possible under very strict prerequisites and is the exception rather than the rule.”

AUSTRIA

Freshfields Bruckhaus Deringer LLP

“One of the main reasons parties choose arbitration over litigation is the autonomy it gives them over the proceedings. Parties are free to nominate an arbitrator of their choice who has the relevant sector knowledge required for the specific dispute. Confidentiality also plays an important role. Hearings are generally conducted in private but a specific agreement between the parties may be required to ensure strict confidentiality of the entire proceedings. In some jurisdictions, arbitration is more time and cost effective than litigation in state courts.”

CZECH REPUBLIC

Clifford Chance

“The key factor driving the growth of arbitration is the parties’ ability to choose an arbitrator while taking into account the specific context of the case. This allows parties to nominate an arbitrator with specific expertise or commercial experience who is able to understand the case more easily, compared to a judge at a general court, and see it from the businesses’ perspective. Many cases are generally given to courts based on the respondent’s place of business and without consideration of the amount in dispute, the complexity or the specific needs of the case.”

CAMBODIA

MAR & Associates

“Commercial arbitration is an attractive form of dispute resolution which allows the parties to amicably agree on how the proceedings are to be conducted in the event of a dispute. Issues such as the selection of venue, flexible proceedings and parties’ appointment of arbitrators can be agreed in advance. In arbitration, the parties may choose an institution to administer their case or choose ad hoc arbitration. Additionally, the parties may also choose a neutral country to be the seat, which is particularly important in those disputes where the parties are based in different countries.”

SINGAPORE

Ashurst LLP Singapore

“Arbitration is often seen as having at least three key advantages over litigation. First is the ease with which arbitral awards can be enforced internationally. As a result of the almost universal adoption of the New York Convention, the award resulting from an arbitration can be enforced nearly everywhere in the world. There is presently no international convention for enforcement of court judgments with levels of adoption even remotely close to that of the New York Convention. Second, in most jurisdictions arbitration proceedings are confidential.”

UNITED ARAB EMIRATES

Horizons & Co

“Various considerations encourage parties to pursue arbitration rather than litigation in the event of a commercial dispute. First, parties to an agreement are often from different jurisdictions and prefer to avoid litigating in a foreign jurisdiction where they are unfamiliar with the legal framework. Second, arbitration allows the parties to nominate the arbitrators who will decide the dispute or, at the very least, express a preference over their qualifications. This is particularly important for parties involved in technical cases, such as construction or intellectual property (IP) disputes, where a judge may not be as experienced as an arbitrator specialised in the industry.”

CONTRIBUTORS

Advoktfirman Hammarskiöld & Co

Ashurst LLP Singapore

Clifford Chance

FLV & Associés

Freshfields Bruckhaus Deringer LLP

Horizons & Co

MAR & Associates

Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates

Three Crowns

Walker Morris LLP

Weil, Gotshal & Manges LLP