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Arbitration is a form of alternative dispute resolution that is commonly used as an alternative to traditional court proceedings. It offers a faster, more cost-effective, and often more confidential way to resolve disputes. In this blog post, we will discuss what arbitration is, how it works, and the key differences between local and international arbitration.
Definition of Arbitration
Arbitration is a private, less formal process where a neutral third party, the arbitrator, decides how to resolve a dispute. It is is often chosen by companies in advance of any disputes, where they agree to resolve future disagreements using this method. The parties involved in the dispute agree to follow the arbitrator’s decision, also known as an award, which is usually binding and final. For more information on this process, please visit (americanbar.org)
Local vs. International
- The main difference between local and arbitration">international arbitration is the location of the proceedings. Local arbitration occurs within the country where the dispute arose, whereas international arbitration occurs outside of the country where the dispute originated. One of the reasons why international arbitration has become popular is that it has the advantage of a neutral ground, which reduces the risk of bias and ensures that the process runs smoothly.
- Another difference between the two is the rules that govern the proceedings. When the proceedings are local, they are often governed by local laws, while international proceedings may be governed by different sets of international rules. These international rules may ensure a more unbiased process and may be better suited for international disputes involving multiple parties.
- The language used during the proceeding is another key difference. In local proceedings, the language used is often the language spoken in the country where the dispute arose. This means that if the parties involved speak different languages, an interpreter may be required. However, in international proceedings, English is often used as the common language, meaning that participants do not need an interpreter to partake in the proceedings.
- The enforcement of awards is also different between local and international proceedings. Local awards can often be enforced through the local courts, whereas international awards may require enforcement in multiple jurisdictions. This can make international proceedings a more complex and time-consuming process, which is why some companies may opt for local arbitration instead.
Conclusion
In conclusion, arbitration is an important alternative to traditional court procedures that offers benefits such as a faster and more cost-effective process. Local and international arbitration are two different options available, with key differences such as location, language used, rules that govern the process, and the enforcement of awards. It is important for parties involved in a dispute to consider these differences and carefully choose the type of arbitration that best satisfies their needs. Contact us for more information about our practice within this realm Contact Our Office – Transnational Matters.