International Arbitration

International arbitration is a method by which the parties agree to resolve their disputes before one or more private arbitrators instead of a court. It is generally viewed as the preferred method of resolving disputes where the transaction in question is international in nature. This is because international arbitration fosters the creation of a neutral forum free of potential local bias or advantage in the courts of a given jurisdiction. Further, the domestic legal system of one of the parties may be unfamiliar or overly complex to the other.

International arbitration enables the parties to choose the arbitrators who will decide their dispute (usually one or three).

International arbitral awards are usually simpler to enforce than court judgments due to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”), which has been ratified by over 170 states worldwide. Under the New York Convention, international arbitral awards are enforceable in any contracting state, subject to very limited exceptions.

Arbitration cannot take place unless the parties agree to it. They most commonly do this by including an arbitration clause in their agreements. Even if there is no such arbitration clause, the parties can still agree to arbitrate a dispute after it has arisen through, for example, an arbitration submission clause.

If there is an arbitration clause, the parties often agree on crucial aspects of the arbitration process, including the number of arbitrators and how they will be appointed, the arbitral institution that will administer the arbitration, the place of arbitration (called the “seat” of the arbitration), the language in which the arbitration will proceed, and other important details.

Even though judges are not involved in arbitrating the dispute, the law of the seat of the arbitration is still important as it governs, among other things, the scope of the arbitrators’ authority. The arbitration clause or submission clause also plays a role in determining that authority.

Arbitration or submission clauses may also specify the arbitration's governing law, which need not be the same as the substantive law governing the contract in dispute.

Unlike what usually takes place in a court, the parties' submissions and rulings and orders issued by arbitrators are generally not available to the public, instead being communicated only to the parties. Arbitral hearings are usually not open to the public. In addition, the parties may agree to keep confidential the existence of the arbitration and its content.