Arbitration - an alternative route to Dispute Resolution

As commercial organisations across the world pick themselves up and focus on rebuilding after the body blow of the coronavirus pandemic many businesses are facing contentious business disputes. The unprecedented commercial environment that has been experienced over the past few months has inevitably caused many businesses to lose ground, which can lead to failure to honour contracts and failure to settle invoices. 

It is all too frequent that when in an adverse situation the parties involved become polarised and struggle to reach a solution. Businesses need a swift solution to disputes in the present circumstances and the possibility of a lengthy and costly court case is an unwelcome additional worry. This can become even more daunting if the issue is cross-border involving companies based in different countries.

The law of England and Wales is commonly selected in international contracts and cross-border transactions. It is therefore important, regardless of the nature of the dispute, that the aggrieved party should have expert legal advice, in their own language, giving clarity to their responsibilities and informing them of any potential risk to their business that the impact of a dispute could have, as well as a guidance on the chances of success and assistance in presenting the issue to either the arbitrator/s or in a court of law.

Khizar Arif, a partner in the corporate and commercial litigation and dispute resolution team, commented “the fact that the law of England and Wales is frequently chosen by international organisations is bolstered by the fact that its judiciary is incorruptible, independent and highly experienced” he further commented “however, the prospect of the rigours of a prolonged court case are rarely welcome and may be avoided if the parties involved have factored into the initial contract a clause relating to alternative ways of resolving a dispute should one arise. Enshrining, within the initial contract, an arbitration agreement to attempt to resolve a dispute by way of arbitration allows the parties to avoid litigation and resolve the dispute”.

Arbitration is a formal procedure whereby the parties agree to refer the dispute to a neutral arbitrator who provides a legally enforceable decision. The arbitrator’s decision is binding on all parties. Once an arbitration has commenced it will proceed in accordance with the procedure that has been adopted, depending on a range of factors. Usually, each party will present a written submission outlining their perception of the matter which will almost certainly be supported by documentary evidence. The procedure may involve more than one hearing and can last as little as one day or continue for several weeks, depending on the complexity of the issue. 

Once all aspects of the issue have been examined the arbitrator’s decision will be forthcoming, which as previously mentioned is legally binding. The decision can be challenged depending on the terms of the arbitration agreement. However, an appeal regarding a decision would usually only be successful if it involved an error in the law or if the proceedings were not conducted properly. Enforcement of a decision can be marginally easier, depending on the jurisdiction. 

Giambrone & Partners’ corporate and commercial litigation team bring diligence, tenacity and determination as well as acknowledged legal expertise to provide the best outcome for our clients.

For more information on resolving contentious disputes by arbitration please click here.