It has been mentioned by some experts that Arbitrations seems to be a logical way to solve the dispute in a commercial transaction. And what are the exactly strong points that make arbitration is become popular?
Some of advantages of arbitrations are:
a. The expertise of the arbitrators
In arbitration the parties can participate in the selection of the arbitrator or arbitration tribunal, they may choose the arbitrators that they think are expert in their discipline, and can solved their problem quickly, and offering a sensible award. Sometimes the arbitrators have no legal educations, but they are have special knowledge regarding the dispute it self.
b. Confidential
Many parties that choose arbitration to settle their case still think that confidentiality in arbitration is an important reason for them to choose arbitration. This is very important in the business world, because usually the party that has a dispute for example a company doesn’t want if the public know that it has a dispute, because this may influent the refutation of their company and their business in future.
c. Quicker way
If Arbitration is compared with Court litigation, arbitration is quicker way than court litigation. This is because judgment in court litigation can be appealed, and in the other hand arbitration has a final and binding decision awards.
d. Flexibility
Different disputes have different approaches. Arbitration give the freedom to the arbitrators to settled the case used the procedure that they think can settle the case efficiently, without any special formalities. Also about the timing of the process, Arbitration gives the parties autonomy to choose the best time when they can meet each other to settled the case, and also the place, they may also determine where the place of arbitration will be held.
e. Internationally Recognition of the award
This is because there is 1958 United Nations Convention on the Recognition and Enforcement of Foreign arbitral awards, which is popular with the name “New York convention”. So if there is an award of arbitration, it can be recognized in other countries. It is different from court decision that there is no worldwide convention regarding recognition and enforcement, therefore sometimes difficult in practice.
Those are the advantages of arbitration. But every way of settlement of dispute of course have a weakness. And arbitration also has weaknesses. Such as:
a. Cost
Generally the cost of arbitration is more expensive if compared with national court, this is because of the fees and the expenses of arbitrators, are paid by the parties, and also the cost of accommodations, for example for hiring the room, the transport fee, and so on, are paid all by the parties.
b. Delay of Arbitral Proceeding
This situation sometimes happened in ad-hoc arbitration. This is because usually in ad-hoc arbitration there is no law yet that govern the proceeding of the arbitration, so if one of the parties do not cooperate, for example one of the party refuse to appoint an arbitrator or prove difficult at the outset of the proceeding then it may caused the delay of the proceeding. Institutional arbitration also may be delay because of the procedural bureaucratic of the arbitral institution.
c. Setting aside of arbitral awards.
Although there is New York Convention, that regulated an award can be recognized internationally, but still in some countries, the party who do not satisfied or disagree with the award, try to set aside the arbitral award with many reasons, for example it is against public policy or mandatory rules in that country, and try to proceed the case to their national court. And of course it is not good for another party.
Those are some reasons why the parties like arbitration to solve their problem. So, even though arbitration has advantages and disadvantages but it still become a nice choice for the business people to solve their case.
