Arbitration is an alternative to Court proceedings but is a legal process and results in a binding and enforceable award.  It is a contractual mechanism and so the parties must enter into an arbitration agreement.  This is usually done within a contract or as part of terms and conditions.  However, parties can agree to refer an existing dispute to arbitration even if there is no provision to that effect.

Although it is not necessary to do so, parties often agree to refer disputes to arbitration in accordance with the rules of a specific arbitration institution such as the International Chamber of Commerce or London Court of International Arbitration.

There are various advantages in using arbitration for resolving business disputes.  Key benefits are speed and confidentiality.  The process is more flexible than Court proceedings and less formal and so can result in considerable savings in costs.   The right of appeal is very limited. Small disputes can be dealt with on paper without a hearing.

Arbitration is of particular importance for companies and businesses who have a contractual relationship with clients, customers, suppliers and parties who are based in other jurisdictions.  Specific benefits include:-

  • A request for arbitration can be drafted and served quickly and easily.  By contrast, where Court proceedings are being brought in England and Wales against an overseas party it is often necessary to apply to Court for permission to issue and serve proceedings out of the jurisdiction.
  • The parties can specify in advance how many arbitrators there should be (usually 1 or 3) the place of the arbitration and the language of the proceedings.
  • There are rules which are aimed at ensuring the independence of the Tribunal hearing the dispute which may not be guaranteed in Court proceedings in some countries.
  • Under the New York Convention 1958, the Courts of all countries who are signatories are required to enforce international arbitration awards.  Virtually every country in the world is a signatory to the Convention.

Arbitration post-Brexit

There are currently regulations in place that govern disputes that arise between parties who are based in different EU member states.  However, it is not clear whether those regulations will continue to operate post-Brexit.

How Gorvins can help

Gorvins are able to advise you as to the most appropriate dispute resolution mechanism to be included in your Terms and Conditions or in a specific contract.  A simple clause can reduce the risk of having to waste significant time and money seeking the resolution of a dispute and give you greater certainty as to the ability to enforce an award in your favour.

Where a dispute does arise we have the necessary skills and expertise to ensure the best possible outcome for you.

To speak to our arbitration solicitors, call 0161 930 5151, e-mail businessdisputeteam@gorvins.com or complete our online contact form.

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