International Law in Action: The Arbitration of International Disputes

 INTRODUCTION

Imagine a world where conflicts between countries do not always end up in heated courtroom battles. Well, that’s where arbitration swoops in like a superhero! When it comes to resolving international disputes, arbitration shines as a powerful tool. Instead of traditional legal proceedings, countries can turn to this alternative method. But what exactly is arbitration, you ask?

Arbitration is like a fancy alternative to traditional court proceedings when it comes to settling conflicts between countries. Instead of heading straight to the courtroom, countries can choose to go the arbitration route. Arbitration is a process where both parties agree to bring in a neutral third party, known as an Arbitrator, to make a binding decision on the dispute. It is akin to  having a referee who listens to both sides and decides on a fair resolution.

One of the reasons why arbitration is popular is because it is more flexible than going to court. The parties involved have a say in how the process unfolds, and they can even choose arbitrators who have expertise in the specific area of the dispute. It is like having a tailor-made solution for their problem!

International organizations, such as the International Chamber of Commerce (ICC) and the United Nations Commission on International Trade Law (UNCITRAL), provide guidelines and procedures to ensure that the arbitration process is fair and transparent. They are like the rule-makers, making sure everything goes smoothly. Arbitration can be used for a variety of disputes, such as commercial matters, investment disagreements, or even boundary disputes between countries. It is a way to peacefully resolve conflicts and maintain good relationships on the international stage.

International law covers a wide range of topics and governs the relationships between countries, international organizations, and individuals. It includes areas like trade, human rights, diplomacy, environmental protection, and war crimes. The United Nations and other international bodies oversee these issues. The main goal of international law is to promote peace and order among nations. Unlike domestic laws enforced by a sovereign state, international law relies on the consent of participating nations. The United Nations Charter explains international law, but the UN cannot directly enforce these laws. However, treaties and the possibility of economic sanctions create strong incentives for nations to follow international law.

There are two main branches of international law: public and private. Public international law deals with relations between nations, while private international law handles conflicts between private actors when multiple countries’ laws may apply. In recent years, these branches have become more intertwined, as disputes between private actors often involve public international law, and public international law affects private actors, especially multinational corporations.

Some important subsets of international law include international economic law, international security law, international criminal law, international environmental law, diplomatic law, international humanitarian law, and more. These subsets cover various aspects of law, such as statutes, property law, tort law, procedural law, due process, and remedies. It is a fascinating and complex field!

STEPS INVOLVED IN AN ARBITRATION PROCESS

Step 1: Agreement to Arbitrate

The parties involved agree to resolve their dispute through arbitration instead of going to court. Parties agree to resolve their dispute through arbitration in a mutually acceptable agreement, such as a contract or a separate arbitration agreement.

Step 2: Selection of Arbitrators

The parties choose one or more arbitrators to hear their case. It’s like picking referees who are knowledgeable and fair. The parties may select arbitrators based on their expertise, qualifications, or specific rules provided by the arbitration institution or agreed upon by the parties.

Step 3: Submission of Arguments

Both parties present their arguments, evidence, and documents to support their case. Each party submits written arguments, supporting their claims.

Step 4: Hearings

The arbitrators hold hearings where both parties can present their case, cross-examine witnesses, and make oral arguments. They get the chance to speak up, ask questions and make their case stronger.

Step 5: Decision

The arbitrators review all the evidence, arguments, and witness testimonies, and then they make a final and binding decision. They carefully examine everything and come up with a decision that both parties must follow.

Step 6: Enforcement

Once the decision is made, it’s legally binding, just like a court judgment. The parties must follow the decision and resolve the dispute accordingly. If they fail to, there may be consequences.

THE ROLE OF NATIONAL COURTS IN ARBITRATION PROCESS

At the highest level,  there is the possibility of the judiciary disrupting the decision-making process during the administration of the agreement. According to this approach, the parties will have the right to full arbitration to implement the agreement before starting arbitration, if they request it. Article 2 of the New York Convention can often support this approach, as it requires national courts to refer parties to arbitration unless they are satisfied that the agreement is not “true, false or incomplete”![i]

Some decisions allow the parties to object to the breach of the arbitration agreement, allowing the court to decide on these objections independently, and there is no particular difference between the various objections that can be raised.[ii] Such decisions do not necessarily harm or cast doubt on the judicial system, but they do give the parties the right to ask the court to decide before making the decision after the arbitration has been approved. In this way, they do not recognize the authority of the arbitral tribunal (that is, they do not challenge the court to determine the arbitral tribunal’s authority if the sentence of its decision is challenged), but they do not give the tribunal the authority to decide whether it is considered “bad” or not” Kompetenz-Kompetenz, that is, pre-arbitration is limited to the decision of the court. Therefore, the court decides to determine its own law and jurisdiction, but the exercise of jurisdiction cannot exceed the court’s authority to determine whether arbitration should proceed if requested. Allowing breach of contract arbitration from the outset may be costly. It continues to encourage parties opposing the decision to seek arbitration and decide during the arbitration process that the decision should not have been made. This could jeopardize some of the most important reasons for the judicial system: speed, economy, and avoiding procedural problems with cases in the country.

The main point of the debate on the role of courts in the judicial process, as we mentioned above, is the need for the support of national courts in the judicial process. However, it is worth noting that both parties must seek the court’s intervention in the decision. Interestingly, an arbitration clause in a contract does not eliminate the authority of the court or protect the parties from applying to court in disputes that arise. In some cases, both parties submit their cases to court, regardless of arbitration rules. In other words, a party to the arbitration may choose to submit the dispute to arbitration or have the complaint decided by a court.[iii] However, it is true that the court has exclusive power to refer the matter before it for decision.[iv] It is worth quoting the words of Professor Lew QC: “Even if it were a voluntary decision, it must be recognized that no conflict resolution can exist in a vacuum, just as no man or woman is an island.”[v] It is safe to say that arbitration tribunals still need courts to give life to their cases.

CONCLUSION

Arbitration plays a crucial role in the field of international law. It offers a valuable alternative to traditional litigation for resolving disputes between parties from different countries. One significant aspect of arbitration is its flexibility. Parties have the freedom to choose their arbitrators, the governing law, and the procedural rules. This flexibility allows for a tailored approach to dispute resolution that can better accommodate the specific needs and interests of the parties involved.

Arbitration also promotes neutrality and impartiality. By selecting arbitrators with expertise in the relevant legal and technical areas, parties can ensure that their disputes are heard by knowledgeable professionals who can render fair and informed decisions. Moreover, arbitration offers confidentiality, which can be particularly important in sensitive commercial or international matters. Unlike court proceedings, arbitration allows parties to keep their disputes private and maintain confidentiality. The enforceability of arbitral awards is another significant advantage. The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards provides a framework for the recognition and enforcement of arbitral awards across multiple jurisdictions. This facilitates the global enforcement of awards and enhances the credibility and effectiveness of arbitration as a dispute resolution mechanism.

Overall, arbitration serves as an efficient, flexible, and internationally recognized method for resolving disputes in the field of international law. It promotes party autonomy, ensures expertise, and facilitates enforceability, making it an invaluable tool for international business transactions and cross-border.

“Picture a world where nations transcend borders and embrace arbitration as a catalyst for international cooperation and understanding. Let’s champion the power of dialogue and peaceful resolution, paving the way for a more harmonious global community.” By emphasizing the importance of arbitration and peaceful dispute resolution, we can inspire a collective effort towards building a more collaborative and interconnected world.

FOOTNOTES:

[i] Art. 2, Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 6, 1958, U.S.T. 2117, 330 U.N.T.S. 38.

[ii] See, e.g., [BGB] [CIVIL CODE], 1032(2) (providing that prior to the constitution of arbitral tribunal, an application may be made to the court to determine whether or not arbitration is admissible.)’

[iii] Ariori v. Elemo (1983) 1 SCNLR 1

[iv] Moyinoluwa Adegboye, ’The Role of The Court In Arbitration, Under The Arbitration And Conciliation Act 2004’ cited at https://djetlawyer.com/the-role-of-the-court-in-arbitration-under-the-arbitration-and-conciliation-act-2004/

[v] Julian D M Lew QC, Does National Court Involvement Undermine the International Arbitration Process? 24 Am. U. Int’l L. Rev. 489 2008-2009.