Cross-Border Business Drives the Growth of International Arbitration
New York,US (PRWEB) January 17, 2013
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When businesses embark on a cross-border contract, dispute resolution is unlikely to be at the top of their list of priorities. However, in today’s increasingly global economic and business climate, international arbitration is becoming more commonplace and businesses will benefit from being prepared for the challenges this could present.
Arbitration has become a popular form of dispute resolution as it allows parties to come to an arrangement while keeping a case out of the courts of any particular country. International commercial arbitration has filled a need created by the great diversity in national legal systems and the perceived inability of some courts to enforce the law fairly, expeditiously, and without prejudice against foreign litigants.1 Businesses choose arbitration over litigation because of its neutrality, finality, enforceability, procedural flexibility and the ability to choose the arbitrators.2
A number of institutions are available to help corporates seeking international arbitration. Among the largest in the EU are the London Court of International Arbitration (LCIA), the International Chamber of Commerce (ICC) in Paris and the Swiss Chamber of Commerce and Industry in Switzerland. The US’s leading arbitration institution is the American Arbitration Association (AAA). In Asia, companies can choose from “the Big Three”3 – the China International Economic and Trade Arbitration Commission (CIETAC), the Hong Kong International Arbitration Centre (HKIAC), and the Singapore International Arbitration Centre (SIAC).
Steady Growth in International Arbitration Activity
Arbitration requests worldwide continue to grow in volume. New case filings in the Asia’s “Big Three” have more than doubled in the last 10 years, with CIETAC handling the bulk of disputes. Additionally, SIAC has experienced 90 percent growth in the past four years. The ICC’s Court of Arbitration experienced a 20-fold increase in arbitration requests in a 50-year period, up from 32 requests in 1956 to 593 in 2006. Similarly, for the AAA, 1,356 international claims in excess of $1 million were filed in 2006, up from 101 in 1980. This trend is supported by a Queen Mary University Law School in London survey first published in 2006, which concluded that for the resolution of cross-border disputes, “73% of respondents prefer to use international arbitration.”
Leading arbitral institutions have revised their institutional rules repeatedly over the past decades to make dispute resolution more efficient and predictable, while the arbitration community has developed practical “best practices” in areas such as the taking of evidence and disclosure.6 Indeed, certain arbitration organizations are taking steps to improve their ranking in the international, as well as local or regional arenas.
For example, international acceptance of China’s CIETAC as an arbitration service provider has increased in recent years as CIETAC has modified its rules in areas such as language and venue to bring them more in line with the provisions of other international commercial arbitral institutions. “These modifications,” notes legal expert Anthony Connerty, of Lamb Chambers, Temple, London, “Should enhance CIETAC’s position as a leading arbitral institution in Asia and the world.”
As cross-border business continues to grow, the need for high-quality international legal expertise, discovery, language translation and document support services is also increasing. Companies are best protected by engaging experienced arbitration translation experts and litigation support professionals early in the process.
1 Loukas Mistelis & Crina Baltag, Recognition and Enforcement of Arbitral Awards and Settlement in International Arbitration: Corporate Attitudes, 19 AM. REV. INT'L ARB. 319, 320 (2008).
3 Frederick A. Acomb and Troy L. Harris, “The Big Three of Chinese International Arbitration,” China International Newsletter, Miller Canfield, December 2012.
4 Acomb and Harris.
5 Gary Born and Wendy Miles, “Global Trends in International Arbitration,” Wilmer Cutler Pickering Hale and Dorr LLP.
6 Gary Born and Wendy Miles.
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