Since 1966 the UN general assembly established the United Nations Commission on International Trade Law (UNCITRAL) as a way to promote harmony and unity in international trade. Since then, the UNCITRAL rules have been used to arbitrate any commercial argument. These laws work both for international and domestic arbitration.
The number of both international and domestic arbitration proceedings has evidently grown in the past years. It is easy to see how many cross-border or local situations are being settled by impartial and independent entities, recognized as the most efficient compared to local or international legal instances.
Even though domestic and international commercial arbitration are both based on common rules and principles, there are some important differences that must be kept in mind when trying to decide which you suits you better. In this brief article, you will find three significant differences between the two institutions: Case Management Conferences (CMC), Witness and Evidence and Interim Measures.
CMC are held before starting an international arbitration proceeding. A CMC is attended by the arbitrator and the parties, there are no witnesses required since no agreement is actually made. It is in a strict sense a first meeting where the arbitrators, in conjunction with the parties, agree on how they are going to proceed, establishing a number of procedural management guidelines, such as the identification and usage of documented and oral evidence, the limits and quality of the written evidence, the procedural timetable and the advance costs of the proceedings.
A CMC usually is not held prior the beginning of a domestic arbitration. Most of the times in different countries, the above-mentioned matters are not clarified at the commencement of the process. However, some countries domestic arbitration rules can be also based on the UNCITRAL rules. Such is the case of Australia, where the state laws governing non-international arbitration were in recent years replaced by a 'domesticated' form of the UNCITRAL Model Law on International Commercial Arbitration.
Witness and Evidence:
There are two main differences between domestic and international arbitration proceedings regarding the way the witness evidence is presented. These two differences are related to the persons allowed to testify and the methods of taking statements.
In many countries, such as Italy, it is appointed that a person with a commercial interest in the arbitration proceedings cannot be a witness. If a person’s company is involved in the arbitration process, it will not be authorized to present its testimony and will be excluded from the proceeding as a witness. On the other hand, in international commercial arbitration, anyone can be addressed as a witness, including the authorized representatives of a company. The arbitrators will be the ones in charge of evaluating the consistency of such witnesses’ statements.
Talking about the method of taking statements, domestic arbitration looks pretty much like an ordinary trial and every witness must orally respond to already admitted testimony during the hearing. Nevertheless, in international arbitration proceedings, there are a few differences that must be kept in mind: first, the attorney is allowed to select the facts and events that its witness has to testify about; second, the evidence is based on written statements; third, cross-examination is allowed.
There are also different rules related to the admittance of written evidence based on each government laws. Sometimes, in domestic arbitration, the judge is allowed to order the exhibition of a document upon demand of the requesting. Nevertheless, in international arbitration, a document can be admitted under the parameters of UNCITRAL Rules based on a more generic request for the exhibition of documents.
According to the European Court of Human Rights, Interim Measures apply only where there is an imminent risk of irreparable harm. In many EU countries, the arbitrators are not allowed to issue interim and conservatory measures in domestic proceedings. Instead, this opportunity is usually granted in international arbitration proceedings. Almost all the important European arbitration centers give this power to arbitrators, who normally make the granting of the measure subject to an appropriate security provided by the requesting party
There are also some other differences that may apply, such as the price of the two procedures (being the international arbitration one the most expensive), the quality and efficiency of the procedure and the selection of the arbitration panel, among others. However, it does not matter how different these two procedures may be, they are for sure the best way for your company to settle its differences with another party if you do not want to go to court and prefer to stay out of the flashlights.