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International Commercial Arbitration : strengths and drawbacks

Arbitration is a favoured method of dipute resolution in the international forum, specially in cases of international commercial arbitration which differ from domestic disputes in many ways. It is preferred over court litigation in some cases. However, international commercial arbitration is replete with both strengths and drawbacks some of which are discussed below :


  • NEUTRALITY OF THE ARBITRAL AWARD : the neutrality of the award rendered after arbitration is one of the many strenghts of arbitration in international disputes. In international disputes the parties involved in the dispute are mostly of diferent natioanalities and therefore, submitting a case to a party's national court and national laws, maynot be attractive to a party who belongs to a diferrent country. Moreover, the national courts may lack the required knowledge and competence in resolving the disputes involving international commercial issues. The arbitrator conducting the arbitration can be the choice of the parties. He/ she can either be appointed from a national court or maybe from a international arbitral institution. Thus an all round  neutrality of the process is ensured. However, sometimes the private arbitrators are driven by their personal interests while conducting the arbitration process. They amy have financial or personal interests in the matter and may deviate from an unbiased arbitration.
  • ENFORCEABILTY OF THE DECISION :  an arbitral award is an enforceable decision as compared to ther processes of dipute resolution that are non enforceable. However allegations of the arbitration award being biased towards the western commercial interests are widespread. Sometimes these perceptions of people come as a barrier to parties favouring of commercial disputes . Also, drafting an arbitration agreement in case of multi party contracts is laborious. It requires careful consideration and scrutiny.
  • A FLEXIBLE PROCESS :  in arbitration no formal procedure or rule needs to be followed. Parties are allowed great freedom in the process and to decide on th procedural rules as compared to litigation in courts where standard and pre decided rules ae follwed. This also poses asa a hazard since unrestrained freedom to decide o the ruls smetimes laeds to misconduct and malpractice in arbitration. The arbitrator may favour one or more parties and thus the impartially may be sacrificed and the situation may be misused. 
  • CONFIDENTIALITY MAINTAINED : confidentiality is maintained in international commercial arbitrationunlike proceedings in a court of law where the media,press and general public are allowed admission. However, that is not the case of international commercial arbitration which is a private process. But the confidentiality may not be ensured if the dispute involves issues of genuine public interest. Thus the privacy in international commercial arbitration is not absolute and the public interest to access information is ensured in case of issues of general public interest.

  • prevalence of arbitration in cases of international commercial disputes
  • strenghs of international commercial arbitration
  • drawbacks of international commercial arbitration

BY : Mekhla Chakraborty

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