Arbitration and Litigation Essay Example | Topics and Well Written Essays - 2000 words

Arbitration and Litigation - Essay Example First, the law that recognises and enforces the agreement of arbitration. Then law that regulates actual arbitration procedure, next the specific law or rules that arbitral tribunal has to use in the matter and finally law for recognition and enforcement of the decision of arbitral tribunal, known as arbitration award. The laws governing arbitration proceedings may be same but it is not necessarily so always. Since most of the international arbitration take place in a neutral country to which neither the arbitrating parties belong. So the law of the proceedings, as applied to the matter of the case and known as substantive or applied law, may be different from the law of enforcement of the award. For example, an arbitral tribunal sitting in England will have English law for place of arbitration but may need to apply New York law as substantive law1. Compared to the courts of law, arbitration is a "primitive' way to resolve the issues which is simple because of less formality and expense. The person deciding the dispute has the qualification that he is accepted for arbitration by two parties.2 For example two merchants disputing over damage to their goods would turn to and accept the judgement of a third, fellow merchant. Actually such had been a community practice to maintain peace and harmony among members of business community3. Why International Arbitration The answer may come from the fact that sometimes national law is not sufficient to resolve disputes between warring parties. For e.g. A corporation based in USA contracts another in Germany. The contract is for setting up a power plant in Egypt with any disputes to be arbitrated in London. Now, if a dispute arises and one of the party refuses to arbitrate or the losing party refuses to carry out the award. No national law can resolve the dispute in such case and is an International treaty was necessary to link the national laws and respecting the award (see footnote 1 p. 4). The international treaty to resolve international disputes is a result of Geneva protocols 1923 & 1927 and New York Convention 1958. The aim for such treaty was to remove all the short comings of law of courts, viz. It is to be fast while law is slow, it is to be inexpensive while law is costly, to be simple in contrast to law which is technical and is peace maker in contrast to str ife creator4. The present arbitral process no longer has the simplicity of its beginning, it has incorporated somewhat more technical complexity which was needed to strengthen it to remove any loopholes leading to non acceptance of the award, particularly by the losing party. In the modern arbitral process the award is binding on both the parties and if it is not carried out voluntary by the losing party it would be enforced by the court at the expense of that party (See footnote. 1). The Arbitration Process: The first step is selection of an arbitrator, which should be done carefully. Ideally the help of an arbitral institution is a good option for