Deconstructing the Construction of the Arbitration Clause

Deconstructing the Construction of the Arbitration Clause

WHAT IS INTERNATIONAL COMMERCIAL ARBITRATION?

a.Definitions

It is pertinent to mention the issues relating to litigation as a form of dispute settlement, to place in perspective the role of international commercial arbitration as an alternative means of settling disputes in international commercial trade. (Liebscher 2004)

International Commercial Arbitration is an authoritative treatise providing the most complete available commentary and analysis on all aspects of the international commercial arbitration process.

International Commercial Arbitration provides a systematic framework for both current analysis and future developments, as well as exhaustive citations from all leading legal systems. (Hoellering 1992)

b.Procedures

The second advantage listed by the ICC International Court of Arbitration is, the 'international recognition of arbitral awards'. It is thought an arbitral award is recognised more than judgment of a national court, as 'over 130 countries have signed the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, known as the "New York Convention". (iccwbo.org, 2004). The 1958 convention succeeded on the basis of the 1927 Geneva Convention and the 1923 Geneva Protocol, where it is stated, under the Article III, each state contracting 'shall recognise arbitral awards as binding and enforce them in accordance with the rules or procedure of the territory where the award is relied upon'. Thus the convention has facilitated the enforcement of awards in all contracting states. Furthermore, as highlighted in Fletcher (2001) the UNCITRAL Model Law, and the UNCITRAL Arbitration Rules have also directly influenced the way arbitrations are conducted, allowing for greater unification of arbitration across nations, as such the rules of the ICC, the London Court of International Arbitration (LCIA), (Pietro 2004)and the UK Arbitration Association are similar. Some other multilateral conventions have included, the Panama or Inter-UK Convention of 1975 which has be likened to the New York Convention, and the European or Geneva Convention of 1961. The primary purpose of this convention was to facilitate the efficiency of arbitration within Europe particularly between Eastern and Western European countries. The US and Middle East have also been willing to cooperate between them in terms of arbitration, and in 1987 executed the Amman Convention. Therefore, it can be seen conventions concerned with the enforcement of the international arbitration awards cover most of the world. This has provided greater confidence to international traders, which has led to making arbitration as a mechanism for dispute settlement more popular. (Debattista 2005)

Another advantage of arbitration is it also offers 'neutrality'. As the ICC suggests, parties to a contract can places themselves on an equal footing in 5 key respects:

Place of arbitration

Language used

Procedures or rules of law applied

Nationality

Legal representation

Hence, arbitration offers greater flexibility and party autonomy in decision making, as parties are free to contract where and how the arbitration will be conducted. The arbitration be conducted in any language, any country and with an arbitrator of any nationality. This may be of particular benefit if there is a question of trust, as according to Schmitthoff (1990), parties may ...