6 Reasons International Arbitration Is Better Than Litigation

Law Blog

In the modern business environment, it's becoming increasingly likely that your company will eventually work with one or more companies overseas. Naturally, you hope that every transaction or deal you make will go off without a hitch, but conflicts are bound to arise eventually. Litigation over such conflicts can be both time-consuming and costly.

This is where an international arbitration attorney can help. Many contracts between domestic and foreign companies now require the parties involved to at least attempt arbitration before they resort to litigation. 

What Is International Arbitration?

Essentially, international arbitration sidesteps the legal wrangling that can happen when companies behind different borders get into a disagreement. Instead of jostling over which country's laws hold sway and which country's courts have the jurisdiction to hear a case and enforce a decision, international arbitration gives both sides a neutral forum within which they can settle their grievances. 

The process for international arbitrations was established by a treaty through the United Nations in 1959. Known as the New York Arbitration Convention, this method of dispute resolution between international companies has since been adopted by dozens of other countries, which makes it possible for arbitration decisions to be enforced. 

Why Is International Arbitration Preferred to Litigation?

Arbitration has become an indispensable part of doing international business for a number of reasons. Here are five:

1. Faster resolutions: The entire arbitration process is generally faster than litigation, but the main time-saver is the fact that the decision of the arbitrator hearing the case is subject to fewer appeals than a court decision.
2. Less expensive: Traditional courtroom litigation is almost always costly. This is particularly true if you have to appear in person overseas for frequent hearings, evidentiary motions, and a trial. 
3. More flexibility: The parties involved in a dispute are not bound by the strict procedural rules of a courtroom and are free to decide what procedures will be most effective or appropriate for the situation. This can significantly reduce both time wasted and the financial burden associated with disputes.
4. Privacy: In an image-conscious world, companies are often concerned about how conflicts can affect their image or brand. Arbitration can be kept confidential to avoid negative publicity with consumers or future business partners.
5. Expert adjudication: There's no guarantee that a judge will have even a passing familiarity with your industry. With arbitration, you can select an arbitrator who is an industry expert to hear your case. 

Building an arbitration agreement into your international contracts is a wise move. When a dispute does arise, an international arbitration lawyer can assist as you pursue your claim and help protect your interests. For more information about international arbitration, contact a local lawyer in your area, such as Chao ADR, PC, to learn more.

19 July 2021