INTERNATIONAL COMMERCIAL ARBITRATION

Kalpana Borjha| Kalinga University| 15th June 2020  

Introduction

With the increase in international commerce and overseas business, disputes and legal affairs have become a regular scenario, generally due to breach and sometimes even due to some misunderstandings. In a literal sense, arbitration means a form of dispute resolution where a neutral third party decides the case after hearing the dispute from both the parties. In reference to International commercial terms, it means resolving disputes between traders of different countries without the interference of the courts.

What is International Commercial Arbitration?

International Commercial Arbitration is an alternative method of litigation, to resolve disputes between parties in an international commercial contract. It is controlled by the terms of the contract rather than national legislation. The arbitrator may be Ad Hoc or institutional, depending upon the terms of the contract. In Ad Hoc arbitration, the parties set up their own rules and aspects for the arbitration. Whereas in institutional arbitration, an arbitral institution decides the dispute.

Sources of Arbitration Laws

There is no uniform law that parties are bound to follow for International Commercial Arbitration. These laws are the result of international treaties, conventions, research journals, some of the national laws, etc. Following are some sources of Arbitration Laws:-

• Treaties and Conventions: international treaties are agreements made by negotiation between countries for trade and commercial purposes and Conventions are general agreement regarding basic principles and procedure of trade and businesses. Texts of many such treaties and conventions are found in the commercial database and are used as law to resolve international commercial disputes too.
• National Laws: All the nations have legislation governing international arbitration along with national arbitrations. Sometimes the national laws may have a narrow scope but it remains important for arbitrations.
• Arbitral Rules: A lot of arbitral tribunals enunciate their own set of rules to resolve such disputes; such rules are called arbitral rules.
• Arbitral Award: Arbitral awards are the decisions made by an arbitration institution or tribunal. These awards can be financial and non-financial.
• Case Laws: Case laws are the decisions that are binding on the cases with the same issue of the dispute. This is different from the Arbitral Award. Case laws have precedential values whereas arbitral awards don’t.
• Legal Journals and Books: Journals and Books address narrowest topics in most possible depth. These are a great source of arbitration as they contain the utmost details of any topic.

Important Features of International Commercial Arbitration

• An alternative to National Courts: Litigations in national courts usually takes a lot of time to resolve the disputes and sometimes it is cost-inefficient. International commercial arbitration is better than national courts in these aspects and gives non-biased decisions.
• Private Mechanism: Arbitration being a private dispute resolution mechanism guarantees the confidentiality of the information and parties. Commercial parties want their affairs to be kept private and away from the eyes of the general public, arbitration is a better way to keep information private.
•  Control by the Parties: In arbitration, parties are free to set the system and structure of the arbitration. Consent for such choice is mentioned in the arbitration agreement while making the agreement. In cases where there is no arbitration agreement, they can of course agree to arbitrate after the dispute has arisen.
• Final and Binding Decision: The parties agree in the arbitration agreement that they accept the decision of the arbitrator and are final and binding upon them.

Conclusion

International Commercial Arbitration is the best way to resolve disputes in international commercial affairs because it is convenient, unbiased, and efficient, also and maintains the confidentiality, and credibility of the parties.