Basics on arbitration

Arbitration is an alternative to State Courts, which parties may expressly select in writing before or after a dispute arises amongst them.

The reasons for seeking an alternative to State Courts are many and different depending on various factors.

Among the grounds for choosing such an alternative, a non-exhaustive list of them includes:

  • the possibility to select one’s own rules of the procedure (ad-hoc) or to choose amongst the rules of different Institutions
  • a greater efficiency of the Arbitral Tribunals
  • the mitigation of the potential influence of the nationality of a party
  • to have an earlier decision
  • to keep the dispute and the underlying information confidential (at least as to what concerns the arbitral proceedings)
  • to select directly or through the arbitral institution, an Arbitral Tribunal specialized in the subject of the dispute
  • to avoid a possible formalistic approach by overwhelmed State judges.

If the parties do not wish to appear before State Courts based on their specific needs, they may choose an “ad hoc” or an administered arbitration.

The parties may refer the dispute to an administering body such as the European Court of Arbitration, which appoints arbitrator, who acts under the rules of such a body.

Arbitration conducted under the rules of an arbitral institution may differ – in certain cases even materially - from those of other arbitral institutions.

The selection of the more suitable rules by the parties is important and not always easy.