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Dispute Resolution with Arbitration Part 1
The legal concept of arbitration has been drastically changed and developed over the years. The reason why arbitration is preferred by private companies is partly due to its applicability in an array of contexts such as a business contract, a business trademark, or even agreements in other topic areas in the business circles. Problems occurred between parties of a contract that cannot be resolved are called “disputes”. These disputes can be resolved with the decision of a third person called “the arbitrator”. Arbitration offers more advantages compared to court because it is time-saving, cost-saving, confidential and flexible.
According to the laws of many countries, there is no preference for one method or the other (court or arbitration) to solve a dispute. For this reason, the “parties’ will” is necessary to choose the preferred method. The will is also one of the core principles of arbitration. Parties can reach an agreement called “arbitration agreement” with which they make arbitration compulsory and as the only method available to solve the dispute. The arbitration agreement is a contract that parties can decide completely. The purpose of this contract is to devolve all or some of the disputes arising out or in connection with the contract, in which the arbitration agreement is included, to arbitration. Parties can also choose the number of arbitrators, laws applicable and the seat of arbitration.
As previously mentioned, arbitration is related to the main contract. The arbitrator(s) in deciding the dispute is bounded by the terms and the laws applicable to this contract.
National courts still play a role when parties decided to devolve the dispute to arbitration. Arbitration lacks the power to enforce arbitrators’ decision, this power still belongs to national courts. The latter assists arbitration process under different aspects, i.e. taking evidence, provisional measures, recognizing and enforcing the awards. According to this, it is not possible to separate arbitration from the court proceedings nor to state that arbitration is a completely private process.
