Arbitration is a private dispute resolution process where any dispute between the parties involved is decided by a tribunal. Usually, a tribunal consists of either a sole arbitrator or three arbitrators chosen by the parties themselves in accordance with the parties’ agreement known as the arbitration agreement. The arbitration agreement describes the method of appointment of arbitrators, laws applicable to the arbitration and provides power to the tribunal to hear the dispute. The decision taken by the tribunal after hearing and examining the arguments and the evidence is binding on the parties. If either of the parties refuse to be bound by the decision of the tribunal, it is considered as the breach of the arbitration agreement.
Arbitration is increasingly preferred as one of the most popular methods of resolving dispute worldwide. It is particularly predominant in the commercial sector. With growing international trade and commerce, the nature of disputes has also grown quite complex with involvement of diverse foreign parties, foreign laws and cross-border transactions. International commercial arbitration is thus an ever growing field of arbitration that deals with disputes arising from international commercial transactions. Disputes arising from such intricate commercial deals necessitate attributes such as neutrality, flexibility, confidentiality and expertise all of which are readily accessible in an arbitration.
This article will briefly outline the stages involved in an arbitration proceeding, starting from the moment a dispute arises under an arbitration agreement all the way to the enforcement of the arbitral award.
An arbitration agreement may or may not be a standalone separate agreement between parties outlining the particulars of arbitration. Arbitration agreement typically is a dispute resolution clause contained within a commercial agreement where parties agree to resolve any dispute arising out of the contract by way of an arbitration instead of settling the dispute by way of litigation at court.
These are some of the non-negotiable features of an arbitration agreement or an arbitration clause:
Parties’ consent: Each party in an arbitration agreement must have consented to have their disputes resolved by way of arbitration.
Arbitration Agreement are mostly required to be in writing.
The scope of the arbitration generally encompasses any dispute arising out of the contract or the relationship between the parties.
Arbitration Agreement must state the seat of the arbitration that determines the law that will govern the proceedings of the arbitration, which are the procedures to be followed in the arbitration.
Some arbitration agreement also state the venue or the place where hearings of the arbitration are to take place.
Arbitration Agreement must also clarify the language of the arbitration.
Arbitration Agreement may state whether the parties want their arbitration administered by any institution such as the Singapore International Arbitration Center (SIAC), ICC (International Chamber of Commerce), LIAC (London International Arbitration Center), among others. However, parties may choose to hold an ad hoc arbitration which means that the arbitration will be administered by the parties themselves.
Arbitration Agreement must provide for the number of arbitrators to constitute a tribunal or the method of choosing arbitrator(s) by the parties.
If any dispute arises between the parties bound by an arbitration agreement, either of the parties may initiate the arbitration by issuing a Notice of Arbitration. The party that issues the Notice of Arbitration is the Claimant and the party who received it is the Respondent in the Arbitration. If the arbitration is bound by SIAC Rules, the Notice of Arbitration must include, among others names of parties, reference to the arbitration agreement, brief description of the nature and circumstance of the dispute, proposed number of arbitrators, comments on the applicable rules of law and language of the arbitration.
If the Arbitration is administered by any institution such as the SIAC, the respective institution shall facilitate in the constitution of an impartial arbitral tribunal based on the terms of the arbitration agreement.
Once a tribunal is constituted and both/all the parties consent to the constitution of the tribunal, the tribunal conducts a procedural hearing to determine the framework that will guide the arbitration proceeding. Typically, the procedural hearing will clarify and determine issues such as applicable rules and procedures, timelines to exchange applications, pleadings and evidences in the arbitration.
In any arbitration, the Respondents may raise an issue of the jurisdiction of the tribunal. Under the competence-competence principle, the tribunal has the authority to deicide on its own jurisdiction, whether or not the tribunal can hear and decide the dispute brought before it.
Once the jurisdiction of the Tribunal is established, the Claimant and the Respondents will submit their statement of claim and statement of defence supported by relevant evidences to the Tribunal.
Parties may present witness or even expert witness before the tribunal to support their case.
After the exchange of evidence, parties engage in a final hearing during which they present oral arguments to the tribunal. This phase facilitates the clarification of points, rebuttals, and the solidification of each party’s stance before the tribunal proceeds to issue its award.
The culmination of the arbitration process is the arbitral award, where the tribunal delivers its decision on the dispute. The award, rendered based on the evidence presented and applicable law, resolves the dispute conclusively and with enforceable authority.
International commercial arbitration awards are enforceable under international treaties, most notably the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. This convention facilitates the recognition and enforcement of arbitration awards in over 160 countries.
We provide solutions to the table for all our clients regardless of the scale or complexity of the cases. Let us know how we can help.
Contact Us