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What is an International Arbitration Court?

C. Mitchell
C. Mitchell

In the world of international business, disputes often arise between merchants and partners that, because of distance and cost considerations, could be hard to successfully resolve with a lawsuit. An international arbitration court is often a more favorable way to resolve conflicts that avoids both the cost and the time involved in typical legal resolution. There are several international arbitration courts in various parts of the world. They are typically operated by neutral third parties, and handle disputes according to internationally accepted principles of dispute resolution.

Arbitration of conflicts is a type of dispute resolution. Unlike trial, dispute resolution does not focus on a fact-finder determining who is right and who is wrong, but rather sets itself up as a process whereby feuding parties can recognize and settle their differences together, through mediated discussion and negotiation. An international arbitration court provides arbitration and dispute resolution services for business conflicts that cross borders.

Arbitration may be used to settle disputes about shipping agreements.
Arbitration may be used to settle disputes about shipping agreements.

Many international businesses recognize arbitration as the most effective way to resolve problems that arise in sales contracts, shipping agreements, or any of the various corporate deals in which they engage. International lawsuits often serve to stay contested actions, and can have the effect of halting business while trial or other court proceedings begin. Court disputes between international parties can also be quite costly, involving travel and retention of foreign attorneys, among other things. More often than not, business deals stipulate that all disputes must be resolved in an international arbitration court as a part of their written terms.

International arbitration courts vary in terms of their specific set-up. Some courts, like the International Chamber of Commerce’s Paris-based International Court of Arbitration and the London Court of International Arbitration, offer straight arbitration as well as arbitration according to the principles of alternative dispute resolution, or ADR. Others, like the Baltic Arbitration Court, follow only the United Nations’ arbitration court rules. Each international arbitration court is its own entity, and is established and operated without oversight of any regulatory body. Business agreements usually specify the court that will mediate the arbitration when it specifies that disputes must be arbitrated.

Arbitration courts also vary in terms of the services they will provide, and the means through which problems are heard and mediated. Some courts assign a pre-arbital referee to help parties determine the cause of their disputes, and most adjudicate and mediate problems before a panel. Sometimes those panelists must be legally trained or have judicial experience; other times, experience with conflict resolution is all that is required to qualify one as a panelist. The costs of mediation and dispute resolution also vary between courts. While the services of an international arbitration court are almost always less than the costs of an international trial, that does not mean that they are inexpensive.

No matter which international arbitration court hears a dispute, one thing is certain: the results of the international mediation are final. Although international courts of arbitration are not part of any one government’s court system, the decisions and resolutions parties make in the courts are binding. If one party does not live up to its promises or agreements in mediation, the other can usually file a lawsuit seeking court enforcement.

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    • Arbitration may be used to settle disputes about shipping agreements.
      By: Kurhan
      Arbitration may be used to settle disputes about shipping agreements.