The process used in International arbitration involves an arbitrator that is the one that judges the information and gives a verdict. Both sides have an arbitration lawyer who represents a company and exposes the version of their client, by presenting evidence and arguments. After evaluating both sides of the issue and the arguments exposed by the arbitration lawyers, the arbitrator makes a decision and settles the dispute.
The rules of the arbitration may vary between the entities involved in the dispute, as it is based in a previous agreement made by both sides. This is done by inserting an arbitration clause in both of the entities’ normal business contracts. The arbitration clauses define a lot when defining both the process and results or the arbitration and is what makes all the arbitration processes vary between each other.
When solving issues through commercial arbitration, the arbitration clause usually makes the final decision and settlement to be obligatory, without the ability to appeal it, making both companies compromise to the settlement similar to what happens when this problems are solve through a court system. Though sometimes, limited appeals are permitted but these can only be used in extreme situations. An example could be that the arbitrator was bribed, that would result in having to solve the issue through other methods like a court settlement. There are also non-binding clauses that can be added to be arbitration clause, which makes it possible for any of the sides to reject the solution proposed by the arbitrator, forcing the issue to be solved in a different way or using a different method.
International arbitration bring a lot of advantages to the parties trying to solve the problem, the first one being that is much cheaper than taking the case to court, this has made it one of the preferred methods of solving problems that may appear in international agreements, conventions or treaties. It also makes possible for companies that are not in the same country or that are not under the same set of laws to solve problems effectively and relatively fast. Traditional court cases tend to be longer, more complicate and more expensive, as well as the existing possibility that the laws and verdict accorded during the court process cannot be applied to one of the companies due to different court systems.
On the other hand, institutional arbitration use as a base rules established before, that are not negotiable at all, and these rules must be followed to solve the problem properly. These rules define from the number of arbitrators used to the location, while also taking into account how both the fees and appointments will work when searching o establishing who the mediators will be. They also define what procedure will be used and what rules will be used to evaluate the evidence and reach an agreement. They will also give the possibility of evaluating the arbitration process and reviewing it for arbitral awards.
So that is it, hope we helped you solved any doubt you had about what is international arbitration and how does it really works. So to summarize, international arbitration is an alternative process that can be used to solve problems and disputes between two companies in different countries and an alternative to normal court.