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Dispute Resolution with Arbitration Part 2
This article will discuss the differences between court judgment and arbitration.
Court judgement and arbitration are both methods to resolve disputes, they have the same purpose.
On one hand, court proceedings are the natural method to solve dispute, moreover, usually proceedings are held in public and only with some exception. On the other hand, arbitration is an alternative method that parties can choose instead of court proceedings. This method is known for being confidential as only parties and arbitrators can participate in the hearing, and the decision is not made public unless parties agreed so.
Recent disputes are even more often very complex, technical and require specific knowledge, this leads to another difference. In the first place, judges are not experts, so they have to rely on appointed experts to decide the dispute. Whereas in arbitration, parties are free to appoint whoever they consider appropriate as arbitrators, not necessarily lawyers. This possibility render arbitration more efficient compare to courts because experts can be appointed as arbitrators. Moreover, while judges are bounded by the use of laws of their country while arbitrators can use laws from different countries and also rules of law that are not proper law. While Arbitration’s flexibility is undoubtedly an advantage for choosing arbitration over courts, it is important to point out that not every matter can be decided through it. Court proceedings are suitable for all type of disputes, instead, certain subjects are covered by a reserve of law that prohibits to resolve them by arbitration.
Other differences can be found in the different powers held by courts and arbitral tribunals. The firsts can decide disputes beyond parties’ requests, while the latter is bounded by these requests, and their deciding power cannot exceed those requests. In regards to powers, it is important to highlight that arbitral tribunals have no power to enforce, so parties must reply on national court to enforce decisions of arbitral tribunals. This includes interim measures, witnesses and evidence, and finally the enforcement of arbitral awards.
One last important difference is the appeal. Court’s decisions are in principle appealable while arbitral awards are final. There are just few grounds for requesting the annulment and none of them concerns the merit of the dispute.
