Arbitration

A judgement of a national court of any country will not be enforced in other country automatically. In contrast with a judgement, an award of an arbitral tribunal will be enforceable in other county if such two countries are members of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Because of this, arbitration is normally provided in the international commercial contracts for the last resort for settling disputes.

However, the business persons should remember that arbitration is costly, takes time, keeps people who otherwise may produce other benefit and put the disputing parties in a contentious situation. If arbitration is unavoidable, the followings are the tips:

1. However small or noncomplex the case is, the number of arbitrators should be three instead of one because the parties will be able to avoid an extreme award.
2. Parties should select arbitrators who have extensive experiences in the field of the business in which the parties have disputes.
3. Parties should have lawyers who have extensive experiences in the field of the business in which the parties have disputes.
4. Negotiation between the parties outside the arbitration should be continued to seek amicable settlement. Arbitration should be kept going parallel to keep pressure on negotiation.
5. Conclusion of amicable settlement should be written as an arbitral award in order to make the settlement enforceable.

Here, Parties should understand that arbitration and litigation are like a gambling for which no one can predict the result correctly. A dispute should be avoided in the first place by use of a Dispute Board (DB) and if the parties failed in avoiding disputes and failed in achieving settlement upon DB decision, parties should try mediation before commencing arbitration or litigation.