
How to choose the best Arbitration Seat

Alternative dispute resolution (ADR) has long been an option for parties in conflict. Rather than going through a potentially long and most likely adversarial process that they have little say over, as they cede control to the courts, parties often prefer to resolve issues informally and confidentially. Arbitration is one of the more structured ADR formats that many commercial and business agreements rely on to resolve issues. While arbitration is an excellent choice, parties must take steps to ensure that their best interests are represented or at least that they have an independent and neutral arbitration process. One factor that can help safeguard that an arbitration proceeding is effective, binding, and enforceable is choosing the best arbitration seat for the circumstances or involved parties.
What is arbitration?
Arbitration is one of several ADR methods available. It is most similar to litigation and court proceedings in that there is a third party that oversees and decides any settlement, damages, or awards, following a specific set of rules and timing. However, while rules of law and jurisdiction oversee litigation, including scheduling, fees, and determinations in courts, arbitration has its rules and processes decided by the disputing parties agreeing to them. So, while parties cannot pick the judge in litigation, they can appoint arbitrators. This is usually documented in an arbitration clause or agreement, which can be written into a contract in anticipation of a dispute or agreed to upon the decision to begin arbitration proceedings. An arbitration clause or agreement will typically outline the appointment of arbitrators (including how many there will be), timeframes, language, and other rights and responsibilities for all involved. Among the most important decisions regarding an arbitration proceeding is the seat of arbitration.
What is a seat of arbitration?
The term “seat of arbitration” specifically refers to the legal home of the arbitration and not the venue in which the arbitration will occur. Very often, these two are the same. Still, there are times when they are not, so the distinction must be made (e.g., a Singapore party and an Australian party participating in an arbitration in Singapore, but under UK law). Both sides must agree on the seat and consider how that country’s rules and laws will benefit them and the process. This could include interim remedies for urgent issues, available court supervision during arbitration (such as in evidentiary issues), and enforceability after an award.
Factors to consider when choosing a seat of arbitration
When discussing arbitration, the terms “neutrality” and “impartiality” are often brought up. These are among the advantages in terms of arbitrator(s) selection and hearings, but there are also other factors that should be considered. For example, enforceability; a seat may support impartiality and neutrality, but this may be for naught if the final settlement or award cannot be enforced.
To aid ADR professionals and parties considering arbitration, two entities offer lists of “safe seats” criteria. They are the Chartered Institute of Arbitrators (CIArb) in London and the Delos Dispute Resolution Center (Delos) in Paris. They are very similar and include, but are not limited to:
- Law: There is a clear and modern international arbitration law that allows parties to choose arbitration while providing a fair framework with limited court intervention and a balance of confidentiality and transparency.
- Judiciary: There is an independent judiciary experienced in and respectful of international arbitration.
- Legal expertise: There are independent and able legal professionals with international dispute resolution expertise, including international arbitration, available to assist and facilitate arbitration proceedings at the seat.
- Education: There is a commitment to support and promote the disciplines and education required for quality arbitration professionals and those in related fields.
- Representation rights: Parties can choose representation from professionals within or outside the seat.
- Accessibility and safety: Parties, counsel, witnesses, and other involved parties can enter and leave the seat without constraints, including on their persons, documentation, and information.
- Enforceability: The seat recognizes and adheres to treaties and agreements governing foreign arbitration agreements and related rules and decisions from other seats.
While London, Paris, Hong Kong, and Singapore have established reputations as “safe” seats for arbitration proceedings, Thailand does fulfill many of these criteria as a seat of arbitration. The Arbitration Act of Thailand is based on the UNCITRAL Model Law and sets out mandatory laws regarding arbitration proceedings in Thailand. For example, it outlines the requirements for an arbitration agreement, allows foreign arbitrators to participate in proceedings without first obtaining a work permit, allows for a choice of law by the disputing parties (with Thai law being the default if none is designated), reinforces the rule of separability for an arbitration clause or agreement, and many other measures. Importantly, arbitration in Thailand is enforceable under the New York Convention, and while arbitration awards cannot be appealed under Thai law, parties can petition for them to be set aside under specific circumstances.
THAC offers comprehensive arbitration solutions and support
The Thailand Arbitration Center is committed to international arbitration and promotes Thailand as a safe seat for arbitration proceedings for parties worldwide. ADR professionals and parties interested in or involved in ADR can rely on THAC as a resource for model clauses and agreements and a site for proceedings.
THAC offers world-class dispute resolution services, including access to practitioners who can act as neutral arbitrators, mediators, and experts in relevant subject matters related to the dispute. With a convenient location in central Bangkok, participants can reach THAC’s state-of-the-art facilities by public transport, major roads, and international airports, making it ideal for local and international ADR proceedings. THAC also boasts the most advanced equipment for remote hearings and a proprietary TalkDD platform for online dispute resolution. There is also full administrative support available to facilitate and expedite ADR processing.
If you have questions about arbitration or any other ADR methods, please get in touch with us at [email protected] or +66 (0)2018 1615. THAC is looking forward to helping you.