Advantages and Disadvantages of Arbitration
- Parties can choose their own tribunal
- Arbitration is often faster than litigation
- Arbitral proceedings and awards can be made confidential
- Language of arbitration can be chosen
- Arbitration awards are generally easier to enforce in other nations
- Consumers and employees may unknowingly agree to mandatory arbitration
- Parties waive their rights to access the courts
- Disconnect between confidentiality and disclosure
- Potential bias if arbitrator depends on the corporation for repeat business
- Limited avenues for appeal
Arbitrability and Arbitration Agreements
- Some disputes cannot be subjected to arbitration
- Court procedures that bind the general public or public authorities may not be arbitrable
- Matters relating to crimes, status, and family law are generally not arbitrable
- Disputes involving private rights between two parties can be resolved through arbitration
- Some legal orders restrict arbitration to protect weaker members of the public
- Two types of arbitration agreements: pre-dispute and post-dispute
- Pre-dispute agreements are more common and include an arbitration clause in a contract
- Post-dispute agreements are signed after a dispute has arisen
- Legal significance may attach to the type of arbitration agreement
- The law generally upholds the validity of arbitration clauses, even if they lack formal language
Comparison with Other Dispute Resolution Methods
- Arbitration is distinct from judicial proceedings, alternative dispute resolution, expert determination, and mediation
- Limited avenues for review and appeal in arbitration
- Discovery may be limited or nonexistent in arbitration
- Enforcement options for arbitration awards may vary in different legal systems
- Unlike court judgments, arbitration awards require judicial remedies for enforcement
Historical Development and International Agreements
- British support for the Confederacy during the American Civil War led to tensions that were resolved through arbitration
- The First International Conference of American States in 1890 developed a plan for systematic arbitration, but it was not accepted
- The Hague Peace Conference of 1899 resulted in major world powers agreeing to a system of arbitration and the creation of a Permanent Court of Arbitration
- Arbitration treaties of 1911-1914 negotiated by William Howard Taft and Philander C. Knox were defeated due to amendments added by the Senate
- Efforts of Secretary of State William Jennings Bryan to promote international arbitration agreements were frustrated by the outbreak of World War I
- The most important international instrument on arbitration law is the 1958 New York Convention on Recognition and Enforcement of Foreign Arbitral Awards
- Other relevant international instruments include the Geneva Protocol of 1923, the Geneva Convention of 1927, the European Convention of 1961, and the Washington Convention of 1965
- The Washington Convention of 1966 established the International Centre for Settlement of Investment Disputes
- The UNCITRAL Model Law on International Commercial Arbitration of 1985 provides a set of rules for ad hoc arbitration
Arbitration Procedures in Specific Jurisdictions
- Arbitration law and procedure in Singapore, including provisions for seeking court rulings and appeals
- Arbitration procedures in the United States, including the Federal Arbitration Act and the use of mandatory predispute arbitration clauses in consumer law
- Composition of the arbitral tribunal, including sole arbitrator, two or more arbitrators, and various combinations with or without a chairman or umpire
- Types of arbitrations, including ad hoc arbitrations and administered arbitrations
- Duties of the tribunal, such as acting fairly and impartially, allowing each party a reasonable opportunity to present their case, complying with the rules of natural justice, and adopting procedures suitable to the circumstances of the case
- Arbitral awards, including both final and interim awards, remedies that may be included, limitations on the powers of the tribunal, and the authority of courts to set aside awards in extreme cases.
Arbitration is a form of alternative dispute resolution (ADR) that resolves disputes outside the judiciary courts. The dispute will be decided by one or more persons (the 'arbitrators', 'arbiters' or 'arbitral tribunal'), which renders the 'arbitration award'. An arbitration decision or award is legally binding on both sides and enforceable in the courts, unless all parties stipulate that the arbitration process and decision are non-binding.
Arbitration is often used for the resolution of commercial disputes, particularly in the context of international commercial transactions. In certain countries such as the United States, arbitration is also frequently employed in consumer and employment matters, where arbitration may be mandated by the terms of employment or commercial contracts and may include a waiver of the right to bring a class action claim. Mandatory consumer and employment arbitration should be distinguished from consensual arbitration, particularly commercial arbitration.
There are limited rights of review and appeal of arbitration awards. Arbitration is not the same as: judicial proceedings (although in some jurisdictions, court proceedings are sometimes referred as arbitrations), alternative dispute resolution, expert determination, or mediation (a form of settlement negotiation facilitated by a neutral third party).
From Middle English arbitracion, borrowed from Old French arbitration, from Latin arbitratio, from arbitrari (“to arbitrate, judge”); see arbitrate.
