1. The flexibility of commercial arbitration
The flexibility of commercial arbitration is one of the main reasons why it has become the preferred method of dispute resolution in the business sector. From the freedom to choose arbitrators, customize procedural rules, choose location and language, to quick settlement times and a spirit of cooperation, commercial arbitration brings many outstanding benefits to the parties. business. Voluntariness and minimization of state intervention increase the effectiveness and reliability of this method, helping businesses resolve disputes quickly, economically and amicably.
Freedom to choose an arbitrator: One of the most outstanding features of commercial arbitration is the parties’ freedom to choose arbitrators. Instead of being bound by an appointed judge as in a court, parties can choose people with expertise appropriate to the field of dispute. This ensures that disputes are reviewed by people who truly understand the industry and technical issues involved, leading to fairer and more accurate decisions.
Customize procedural rules: Parties to commercial arbitration can agree on procedural rules that will apply in the dispute resolution process. This includes time, location, language used, and specific procedures to be followed. This customization helps optimize the process according to the specific needs and conditions of each dispute, thereby minimizing litigation time and costs. At the same time, it also helps create a friendly litigation environment, favorable for reaching cooperation and agreement between the parties.
Location and language: The parties may agree on the place and language to be used during the arbitration. For international businesses, this is especially important as it helps avoid difficulties and costs arising from having to resolve disputes in an unfamiliar location or language. Flexibility in choosing location and language helps parties feel more comfortable and easier in participating in the arbitration process.
Quick resolution time: Commercial arbitration often has a quicker settlement process than court. The parties can agree on the time to resolve the dispute, from the filing of the lawsuit, the time limit for responding, to the time for the meeting to open and the decision to be issued. This flexibility helps avoid unnecessary delays, ensuring that parties can quickly resolve disputes and continue business operations without long-term disruption.
Voluntary and Cooperation: Another important element of commercial arbitration is the spirit of voluntariness and cooperation between the parties. Arbitrators often facilitate the parties to reach an amicable and cooperative agreement, instead of creating confrontation as in court proceedings. This helps maintain the business relationship between the parties after the dispute is resolved.
2. Benefits of commercial arbitration for businesses
In the context of globalization and the rapid development of international trade, resolving disputes effectively and quickly has become an essential requirement. Commercial arbitration, with its outstanding features, has become a popular and preeminent means of handling commercial disputes. Below are the important benefits of commercial arbitration that businesses and stakeholders can take advantage of:
Speed and Efficiency: Commercial arbitration often results in faster and more effective dispute resolution than court cases. This is because the arbitration process is often more streamlined, with simplified procedures and reduced administrative requirements. As a result, disputes can be resolved quickly and cost-effectively, allowing parties to continue business operations without long-term disruption.
Cost savings: One of the outstanding benefits of commercial arbitration is minimizing costs compared to litigation in court. Arbitration procedures are often less expensive because they are not bound by many administrative regulations and complex legal requirements like in the court system. The costs of arbitration are usually shared equitably between the parties, helping to reduce the financial burden on each party.
Security: The arbitration process is conducted in a confidential environment, ensuring that all information and data related to the case are not made public. This is especially important in international trade, where parties may need to protect sensitive information or maintain the security of their reputations.
Fair: Arbitrators are independent and have no personal interest in the outcome of the dispute. This ensures that the adjudication process is fair and free from bias or prejudice, enabling the parties to receive a just and equitable outcome.
Flexibility: Another important advantage of arbitration is the flexibility of the process. The parties may tailor the arbitration procedures to suit their particular needs, such as choice of language, number of arbitrators, and venue. This flexibility allows for efficient and customized dispute handling for each specific situation.
Execution ability: Arbitral awards are generally recognized and enforced in many countries, including countries that are not parties to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. This ensures that the arbitration award will be enforced, helping the parties to exercise their rights and obligations.
Expertise: Arbitrators often have in-depth expertise in the field related to the dispute, which is very important in cases with complex commercial or technical elements. The arbitrator’s in-depth knowledge ensures that decisions are made based on a thorough understanding of the issue, rather than on the imposition of the judicial system’s power.
Predictability: Arbitration typically provides a greater degree of predictability to parties in international trade, as the decision is often based on the contractual terms between the parties, rather than unpredictable factors in the court system. . This helps reduce uncertainty and better manage financial risk.
Neutrality: In international trade, disputes can arise between parties from different countries. Arbitration provides a neutral platform for resolving these disputes, with the parties agreeing to a neutral venue for the arbitration and accepting the outcome of the arbitration.
Reduce the risk of corruption: In some countries, the judicial system may face problems of corruption and political interference. Arbitration provides a more reliable and transparent alternative to litigation in court, helping to reduce the risk of corruption and ensuring that decisions are made based on fairness and facts.
3. Commercial arbitration compared to other methods
Commercial arbitration stands out from other dispute resolution methods thanks to its effective combination of the advantages of mediation, court and negotiation, while overcoming the inherent limitations of each of these methods.
Compared to mediation, commercial arbitration excels in its ability to provide legally enforceable decisions and its ability to enforce them. Mediation relies on the consent and good faith of the parties, which may result in failure to reach a final agreement or non-compliance with an agreement already reached. Furthermore, mediation does not have a strong legal mechanism to enforce the decision, which can make enforcement difficult and costly if one party fails to comply. Arbitration, in turn, provides legally binding decisions and is recognized under international conventions such as the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. This creates a mechanism to ensure the enforcement of decisions on an international scale, making arbitration the superior choice when an award that is enforceable and easily enforceable across multiple countries is needed. .
When compared with the court, commercial arbitration has clear advantages in terms of speed and cost. Court processes often last months or even years, which is not only financially costly but also negatively affects business operations and the psychology of stakeholders. Courts often require complex legal procedures and can lead to delays in the settlement process. Arbitration, with its flexibility in selecting arbitrators and settling times, can significantly reduce time and costs. Arbitrators can be selected based on their expertise in the area of dispute, which helps achieve a more in-depth and precise award.
Compared to direct negotiations, arbitration provides a guarantee of final decision that negotiation may lack. Negotiation, although the most flexible and often least expensive method, depends on the cooperation and goodwill of the parties, and there is no formal mechanism to ensure agreement implementation. If the parties cannot reach an agreement or one party refuses to carry out the agreement, the dispute can drag on and cause additional costs. Arbitration, with its formal and enforceable decision mechanism, ensures that disputes will be resolved conclusively and with legal effect.
In an international business environment, where disputes may involve multiple legal systems and require enforcement of decisions across different countries, commercial arbitration provides a medium-sized method of dispute resolution. quickly, cost-effectively, while ensuring enforcement and the ability to enforce decisions. Flexibility in the process, along with the ability to control time and costs, makes arbitration a superior and reliable choice for businesses and organizations seeking a dispute resolution solution efficient and professional.
4. How to resolve disputes using Bigboss International Commercial Arbitration Center
To resolve disputes by commercial arbitration at BBIAC. Customers can write in the contract one of the following two contents:
4.1. Model Arbitration Clause
“Any dispute arising out of or in connection with this contract shall be resolved by arbitration at the BIGBOSS International Commercial Arbitration Center (BBIAC) in accordance with its Rules of Arbitration”.
In addition, the parties may add:
(a) the number of arbitrators is [one or three].
(b) the place of arbitration is [city and/or country].
(c) the law applicable to the contract is [ ].*
(d) the arbitration language is [ ].** Note: *
Only applicable to disputes with foreign elements **
Only applies to disputes with foreign elements or disputes in which at least one party is a foreign-invested enterprise.
4.2. The Model Arbitration Clause applies to summary proceedings
“Any dispute arising out of or in connection with this contract shall be resolved by arbitration at the BIGBOSS International Commercial Arbitration Center (BBIAC) in accordance with its Rules of Arbitration. The parties agree that the arbitration proceedings will be conducted in accordance with the Summary Procedures set out in Article 37 of the BBIAC Arbitration Rules.”
In addition, the parties may add:
(a) the place of arbitration is [city and/or country].
(b) the law applicable to the contract is [ ].*
(c) the arbitration language is [ ]. **
Note:
* Only applies to disputes with foreign elements.
** Only applies to disputes with foreign elements or disputes in which at least one party is a foreign-invested enterprise.
