International arbitration is a widely recognized method of dispute resolution between parties from different countries, usually involving international transactions. Like any arbitration, international arbitration involves an impartial third party, known as an “arbitrator”, or a panel of arbitrators known as a “tribunal”. The arbitrator, or the tribunal, considers the arguments from both sides of the dispute and renders a binding decision, called an “arbitral award”, based on the evidence presented by them.
International arbitration offers an alternative to the traditional court system and is characterized by its flexibility and enforceability. The arbitration process is more formal than other methods of Alternative Dispute Resolution methods like mediation and often follows rules and procedures similar to a court trial.
In international arbitration, the parties to a dispute have the freedom to select the arbitrator(s), choose the applicable law, and determine the procedural rules that will govern the arbitration process. This multifaceted freedom allows the parties to tailor the process to their specific needs and preferences.
International arbitration, especially its enforceability, is a significant advantage of international arbitration, and is governed by various international treaties, conventions, and the rules of arbitration under the auspices of various institutions, making it a preferred choice for transnational dispute resolution. Arbitral awards are generally recognized and enforced in countries through international treaties like the New York Convention, which simplifies the process of enforcing awards in different countries.
In a nutshell, international arbitration is a highly effective and preferred method for dispute resolution, making it an essential tool for businesses and other entities engaged in international transactions or facing cross-border disputes.