In a conflict between traders, who are not only those who recurrently perform acts of commerce, but also those who carry out even a single commercial transaction, there are canonical ways to resolve conflicts, each using mechanisms and procedures, commercial trials are one of them. Along with those ways that are most used to legally solve a trade dispute, there are others that not only follow different rules but are inspired and on the pursuit of adjacent results different from the mere conflict resolution.
We must recognize that what is common in all forms of dispute resolution is that there is a dispute (genuine or apparent) and in front of it, there are parties that have different ideas on how it should be resolved, otherwise the intervention of an impartial third party that delivers the respective resolution wouldn’t be required. In this case, it would be clear that the conflict can be decided by the parties themselves or if the dispute continues, the resolution can be entrusted to a third party, which may well be an expert in law or in the kind of act or acts of which the case emerges. In legal vocabulary these ways are called Alternative Dispute Resolutions, they were invented to leave both parties without losers or winners but with a taste of fair play in their mouths.
The key element in the court processes is precisely the judge, who is an expert in law and is in charge of directing in a greater or lesser extent the procedure, following certain immutable rules contained in a law or a code, leading to the issuance of a judgment which it is usually binding on both litigant parties.
On the other hand, in arbitration, the necessary estimation is the existence of the arbitrational agreement in the form of arbitration clause or arbitration convention, after which it designates one or more arbitrators under a consensual process which is determined by the parties or in the case of the procedure failing that, there is one provided by the Arbitration Law, this person is not necessarily an expert in the law and are usually subject to the rules chosen by the parties designed to solve the situation.
Both dispute resolution mechanisms intend to achieve the same result: the successful and equitable decision of the conflict, but, whichever way is used, some qualities might be gained and some lost.
We could say, for example, that during the court process a high degree of certainty and legal security is maintained, more often than expected and probably the speed and specialization are lost whereas in arbitration, while flexibility and expert decision are privileged, the parties might lose to some extent the legal certainty and security because of the “no appeal” characteristics of the new issued resolutions. For all of the above and some other reasons of no lesser importance, not all legal conflicts are ideally resolved through the court process nor is arbitration always good to resolve a trade dispute. The important thing is to choose the right procedure to make sure you get what you want.
Private arbitration is one of the so-called alternative means of dispute resolution (ADR); this is because this resolution mode is perceived as a substitute of state jurisdiction, because it occurs after the appointment of a (private) impartial third party by the parties in dispute, so this extra party becomes the one who resolves the issues, unlike the court process, which can only be presented before judges who previously have that quality and that, after the trial is concluded, the jurisdictional authority does not disappear, as it does disappear when the work of the arbitral tribunal concludes. While this is not a new legal form, its undeniably innovative way of working makes it attractive, standing out as many people’s favorite instrument to see their conflicts resolved, especially those of particular complexity or where for some reason, confidentiality is sought.
The world’s preference for arbitration does not only establishes it as the main competitor of the process in courthouse, but, some say it has even surpassed it, especially in regards to highly specialized situations that require a longer time for analysis.