Arbitration

Arbitration is only available for commercial disputes but has many advantages over court processes. A major advantage for e-commerce and other commerce between parties in different nations is that the problem of which court has jurisdiction disappears.

By agreeing to arbitrate the parties are committed to either agree on the arbitrator or on the method of choosing the arbitrator. The parties can also choose many of the processes that are to be followed. If they cannot agree on these processes then there are default provisions in the Arbitration Act  which will apply. The parties are then pretty much totally committed to the decision of the arbitrator. There are very limited grounds for interference or review by the courts which take the view that there was an agreement between the parties and the courts should not interfere unless there was something seriously wrong with the process.

The parties can even agree to have the arbitration conducted by an Inquisitorial process. Precisely what this means in a legal culture wedded to the adversarial system is not well defined and should be specified by the parties or the arbitrator. But the parties could agree to have the arbitration conducted fully on European lines where, for example, the arbitrator would cross examine the witnesses instead of the opposing party doing so. Certainly the parties can choose for themselves whether they will be represented by legal counsel or will use an advocate who is not a lawyer. They can represent themselves – again without requiring the agreement of the other party.

Best of all, perhaps, the major nations of the world have, like New Zealand, modeled their arbitration laws on the United Nations Model Law on International Arbitration. This was clearly a compromise between at least the European and United  States interests. It has brought about a high level of international consistency. It provides that the participating nations will enforce arbitral decisions as if they were decisions of their own courts.

Properly drawn provisions for arbitration should be included in all contracts. For this or any other matter connected with arbitration or the appointment of an arbitrator contact us whereever you are in the world.