Arbitration is a form of private dispute resolution. Persons appointed by the parties (as a rule 1 or 3) determine the dispute that has been submitted to them. If parties wish to resolve their dispute by means of arbitration, they will have to enter into an arbitration agreement. This will for the greater part rule out the matter being decided by the national court. An arbitration agreement is also formed when parties, either implicitly or explicitly, agree to accept an arbitration clause in the general terms and conditions.
Arbitration has disadvantages as well as a number of advantages, compared with conducting legal proceedings before the national court.
A major advantage of arbitration in international disputes (outside the EU) is the fact that an arbitral award is easily enforceable in most countries in the world, something which to a far lesser extent is true for the enforcement in countries outside the EU of judgments given by national courts. Another advantage may be that a dispute settled by arbitration is handled with a far greater degree of confidentiality than a dispute dealt with by the national court. Outsiders, for example, as a rule are incapable of discovering that certain parties are engaged in arbitration proceedings, nor is it possible for them to attend hearings of the tribunal, unlike in cases dealt with by national courts. An advantage of arbitration is also that the appointed arbitrators may have special expertise at their disposal, which may be crucial to the dispute submitted to them. An arbitral tribunal that has been asked to determine a takeover dispute may, for example, consist of a professor of accounting law, an M&A lawyer and a national court judge. As pointed out earlier, there are disadvantages attached to arbitration as well. It may be a time-consuming and expensive way of having a dispute settled. The length of arbitration proceedings in part depends on the persons acting as arbitrators. This is something that will have to be considered by the parties in their choice of arbitrators. Of great importance also to the effectiveness of the procedure is the choice of the place, or legal place, of arbitration. With respect to costs it should be noted that as a rule the amount of costs awarded in arbitration is higher than that awarded by an order for costs pronounced by the national courts. Of course this will considerably reduce the costs of a winning party, but it may burden a losing party with significantly higher costs.
Most arbitration cases are administered by arbitration institutes such as the Nederlands Arbitrage Instituut (NAI), the International Court of Arbitration of the International Chamber of Commerce (ICC)), or one of the many specialist or market segment-oriented arbitration institutes. The link will provide you with a list of websites of a number of arbitration institutes.
Arbitral proceedings can be tailored to the parties’ needs and preferences.
Within the limits of applicable law the parties are free to set up arbitration as they see fit. As a rule the parties will not themselves draw up all the procedural rules, but will confine themselves to making a reference to the arbitration procedure. In principle it is permitted to deviate from the procedure. The legal place of arbitration has to be determined by the parties themselves, and if they fail to do so, by the arbitral tribunal. The place of arbitration should be distinguished from the place where the hearings take place, and determines the question by which arbitration laws the proceedings will be governed. If the place of arbitration is in the Netherlands, the Dutch Arbitration Act applies (articles 1020-1073 Code of Civil Procedure). Specific international regimes may apply in international arbitration in particular, in addition to the arbitration rules and the applicable laws on arbitration, such as the IBA Rules on the Taking of Evidence in International Arbitration and the IBA Guidelines on Conflicts of Interest in International Arbitration. See also: www.ibanet.org.
A special area of arbitration is international investment arbitration.
Our arbitration practice involves conducting arbitration proceedings, both in this country and abroad, as well as arbitration-related procedures before the national courts, such as procedures for the enforcement of arbitral awards, the annulment of arbitral awards, objecting to the appointment of arbitrators, etc.
Modern-day trade has caused many disputes to be international in character, giving rise to the following questions:
- before which court or arbitration panel should the conflict be brought?
- which law is to be applied to the dispute by the court or arbitration panel?
- how will you be sure that the judgment is more than just a paper tiger
- how, after a favourable judgment, will you actually be paid your money and/or be supplied with your goods and/or services?
Legaltree has particularly specialized in answering these questions and taking legal action over them.
At Legaltree we are greatly experienced in arbitration. We will be able to assist your business efficiently and effectively, if necessary by setting up a team of specialist lawyers. The best results are achieved when lawyers are approached at a very early stage of a dispute, or potential dispute, when they can still move the conflict in the right direction, in close consultation with the client. We have found that very often making or creating the correct tactical and timely choices will greatly increase the chances of avoiding, or being successful in, legal proceedings.
Arbitral proceedings can be tailored to the parties ‘needs and preferences’.
The following partners are specialized in arbitration: