The term arbitration is used to define a method of resolving the disputes by a legally binding decision.
Arbitration usually demands consent. To go for this option, both the parties need to agree to have your clash settled by arbitrators rather than going to a national state court.
Different types of arbitration options are available in our society. Usually, the range of arbitration starts from large and formal proceedings to short one. Large and formal proceedings are usually held between states over a boundary dispute whereas; short or informal procedures are usually about the good’s quality as per the rule of a trade association. Normally, the procedure and basic cause for selecting arbitration are solely dependent on the type of dispute. One thing common in all arbitrations is that the parties must be ready for the process and whatever the decision is made by the authority needs to be followed lawfully.
When it comes to arbitration, the main advantage of international arbitration is that judgement is more readily enforceable in all states of the world. The main reason for this is the New York Convention treaty. International arbitration also has other benefits.
The International arbitrators have the freedom to select their procedure to resolve the issue. So, the arbitration costs and time varies to a large extent.
An arbitration of an international dispute is normally supervised by the legal system of any country which is also known as ‘seat’ of the arbitration. Normally, the parties are free to select the seat. In fact, courts of the seat have restricted power to make an intervention to support the arbitration and to implement minimum standards of a suitable process.
Flexibility is another advantage of International Arbitration. The parties have the freedom to decide the place and method of hearing. Another choice to be made by the parties is whether to place their arbitration within the structure of an arbitral institution or not. If parties go with the choice of an arbitral institution, then they need to follow a specific set of procedural rules. Both parties need to bear the cost of appointment of the tribunal if they go for the arbitral institution.
The decision given by arbitration is usually enforced in all the states with little regulations.