Arbitral Proceedings – Your Rules, Your Case

Most people have heard of a possibility to resolve a dispute in arbitral proceedings, instead of in classic court proceedings. This text is to introduce a fundamental feature of arbitral proceedings – its flexibility.

When you want to exercise control over your dispute

Typically, speed and lower costs are cited as the advantages of arbitration. But there is also another – rather underestimated – aspect of arbitral proceedings, the parties' control over the case. They may set the key parameters of this alternative dispute resolution method, thus adjusting the procedure to their needs.

More freedom than before court

Unlike court proceedings, arbitration enables the parties to exercise more control over the procedure and the outcome. The so-called party autonomy – the power of parties to agree that their dispute would not be decided in court but before an arbitrator or arbitral tribunal – represents a key principle. In doing so, the parties may decide who would resolve their dispute, under what rules, what law shall be governing the procedure.

By this, the parties may ensure that the entire process would be swift, with reasonable costs, and tailor-made to the facts of the case. Enterprises may then focus on their business – and not on lengthy court disputes. Practical experience also shows that arbitration often does hinder further business relationship between the parties. Continuous trade between the parties in dispute is no exception.

Aspects one may define in arbitration

Parties may affect almost all aspects of an arbitral proceeding, unlike a case in court, where the process is predefined by the law. First, there is arbitrator(s) selection. While in court, a case is assigned to a judge based on a schedule of work, the parties may select the arbitrators in arbitral proceedings. This means that one may select an expert in area which is relevant for the case at hand, thus contributing to an actually expert evaluation of the case and decision. This advantage is all the more significant in complex or highly specialized disputes. Also, arbitrators usually confirm their availability prior to accepting their nominations, thereby reducing the risk of delays.

The selection of place and language of the arbitration is crucial, particularly in international disputes. The place of arbitration would determine the respective authority, which would potentially review the arbitral award, grounds for such review, and the procedural law applicable. The same applies to the choice of procedural rules of the arbitration proceedings. Instead of an universal procedural rules applied in court proceedings, the parties in arbitration may choose the rules of a renowned arbitration institution or set up their own rules. By this, the parties may regulate e.g. the number of written submissions, time limits, process of conducting oral hearing, or rules for taking evidence.

Confidentiality of proceedings is another crucial aspect. The arbitral proceedings are private as a rule. This may form a key advantage in business relationships.

Last but not least, the parties may agree on the governing law, that is the legal rules applied for resolution of the dispute. The parties may even decide that the case be decided ex aequo et bono, so that the decision would not blindly follow the law but would also be fair and equitable.

Arbitration clause – basis for success

For an arbitration to be truly efficient, the arbitration clause (or agreement) must be formulated properly. The parties shall define in the arbitration clause the disputes to be resolved by arbitration, and the basic parameters of the proceedings.