What does the law say on arbitration?

Arbitration is on the rise and it is no wonder why. First of all, because of globalization. Today, it is simpler to settle a dispute between two parties from different countries through arbitration. Second, digitalization has brought about new opportunities for arbitration.

But what does the law say about arbitration?

What are the advantages/disadvantages of arbitration?

Using arbitration gives you many advantages while settling a dispute. It is first of all, faster than litigation in state courts. The parties can also choose their own judges based, for example, on the nature of the dispute, the skills and knowledge of the arbitrators, and trust.  Through arbitration, confidentiality is also preserved: business secrecies are protected. The language of the arbitration can be freely chosen (nor as for state courts, where, for example, if you are in Belgium, you’ll have to introduce your case in Flemish in Antwerp or in French in Liège). And last but not least, Arbitration is easier to enforce. Thanks to the NY convention that is recognized all over the world, it can be used wherever you go. 

Arbitration’s main disadvantage would be that it is more costly than an ordinary court, mostly because you have to pay for your own judge.

What kinds of arbitration exist?

There are mainly two kinds of arbitration: Institutional and ad hoc arbitrations. 

• Institutional arbitrations are administered under a specific arbitration institution (for example the International Chamber of Commerce, or tThe Belgian Center for arbitration and mediation CEPANI). For both of them, a case manager follows the procedure and supervises the quality of the work of the arbitrators.

• Ad hoc arbitrations are freely organised by the parties and the arbitrators only have to follow the arbitration clause and the general rules applicable to arbitration in the country where the arbitration has its seat..

What should an arbitration clause contain?

About the content of the arbitration clause, you’ll have to pay attention to 3 important details:

• The number of arbitrators: it is advised to choose an odd number of arbitrators so that it is easier to make a final decision. 
• The seat of arbitration: it determines, amongst others, the rules of procedure applicable to the arbitration.
• The language: even if you can choose it, it has to be mentioned in the clause.

Digital arbitration

Here are two examples of how digital arbitration is offering new opportunities. First of all, the European Commission has offered new means to settle a dispute through digital arbitration. For documentary credit as a specific case, a new online dispute resolution tool has also been created :« DOCDEX ». It can be used for a problem in this specific field to help you settle your case.

Conclusion

Arbitration is more efficient and it can be used for different situations. Since arbitration is on the rise today and thanks to digitalization, we can guess that in the future years, arbitration is going to evolve and spread to facilitate dispute settlement.

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