Parties include arbitration agreements in their commercial contracts for a multitude of reasons and advantages of international arbitration include the following:
When two Parties from two countries are involved in a dispute, each party’s first choice will almost always be to appear before its own domestic courts. A Party may feel like the domestic court of the opposing Party may be biased, too expensive or not reliable. An excellent second choice is to have recourse to an international arbitration not seated within either Party’s jurisdiction but that the legal system of a third state provides a neutral objective forum. Neutrality is one of the fundamental advantages of international arbitration.
Parties also often choose international arbitration in order for the dispute to remain more private and confidential than national court litigation which is most often public.
The enforceability of international arbitration agreements and international arbitration awards, by virtue of the New York Convention of 1958, is one of the many advantages of international arbitration. The New York Convention of 1958 ensures the enforceability of agreements and the portability and recognition of awards in all signatory countries, as opposed to domestic judgments which do not have the benefit of a global convention and will not necessarily be recognized abroad.
The legal and practical expertise of the international arbitral tribunal is one of the most important advantages of international arbitration. Unlike national judges who hear many disputes related to various industries and areas of law, the Parties to an international arbitration are able to pick and choose the members of an international arbitral tribunal to hear a specific case depending on the specificities of this case. Arbitrators will therefore be nominated on the basis of their knowledge and experience for example in infrastructure and construction projects, licensing contracts, international sale of goods, joint venture disputes, etc. and on the basis of their legal expertise in the law applicable to the contract.
As advantages of international arbitration also include procedural flexibility, cost and speed, Parties are able to choose a cheaper fast track arbitration procedure with a sole arbitrator if they consider that it is in their best interest.