With the globalisation of the world economy, all kinds of the international disputes come out frequently. Solving such dispute efficiently and fairly is very key to the development of the global trade. It is noted that many traders usually like to choose the international arbitration institution instead of the national court. Such a common opinion depends on the inherent advantages lying in the international arbitration.
The first advantage is impartiality. It is well known that the international arbitration institutions are usually organised by the independent organisations. For example International Chamber of Commerce (ICC) that was founded in 1923 and headquartered in Paris, the Stockholm Chamber of Commerce (SCC), the HongKong International Arbitration Centre (HKIAC), and so on. They are not the hands of the government. Whereas the national court is usually regarded as the part of the national government, which is supported by the native finance and will works for its native benefits. There is a common opinion that there is always something in the biased judiciary behind the different customs and languages in the different national courts.
The another important advantage of international arbitration is that the parties are free to contract where, when and how the arbitration will be conducted, which is called party autonomy. For instance, ICC, one of the most famous international arbitration institution, has its own set of rules which provides for greater flexibility in allowing parties to choose which method of dispute resolution will apply to their disputes. Like the ICC, the Stockholm Chamber of commerce (SCC) allows for significant party autonomy in selecting the applicable procedural rules to be followed by the arbitrators. Such common principle makes international arbitration be accepted by the international business community more and more. The relative parties can choose the rules that are fittest for them.
The other important reason which makes the international arbitration so popular is there are many multilateral conventions, regional multilateral conventions and some bilateral conventions that confirms the arbitrational awards shall be recognised and enforceable in the ratified countries. Now the most popular convention is New York convention of 1958 that is adopted more than one hundred states. It succeeded on the basis of the 1927 Geneva Convention and the 1923 Geneva protocol. Under the article III, each contracting state " shall recognise arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon." There are someimportant regional multilateral conventions. For example, the Panama or Inter-American Convention of 1975 that was promulgated in 1975 has sometimes been described as a carbon copy of the New York Convention, the European or Geneva Convention of 1961 which was adopted in Geneva on 21 April 1961, the main purpose of that convention was to facilitate the efficiency of arbitration within Europe and in particular between the Western and Eastern European countries. The States from the Middle East have also been willing to cooperatebetweenthem in the field of arbitration and the most developed stage of their cooperation was the execution of the Amman Convention on 14,April 1987. We can find out that theconventionsthat deal with the enforcement of the international arbitration award almost cover all over the world. Such widely conventions set up the confidence to theinternational arbitration in the international business community and make international arbitration much more popular.
There are also some other obvious advantages, such as private, finality and less cost. Generally speaking, The international arbitration is hold in private, which will be benefit for the resolution of the disputes. Both parties can have a friendly talk. Compared with the common litigation, the arbitration should be finality. Both parties should enforce the award once it be issued. Also the fee for international arbitration usually is cheaper than international litigation.
In fact the international arbitration institutions are playing more and more important roles in the solving the international disputes. The international arbitrationinstitutions also try their best to modify their own rules to catch more shares. With the development of the Asia-Pacific economy, more and more international commerce dispute arise. Since 1994, the Hong Kong international Arbitration centre (HKIAC) and the China international economic Trade and Arbitration Commission (CIETAC) together have processed approximately 1000 new cases a year, with the vast majority being disputes between foreign parties. In 1991, Singapore established the Singapore international arbitration Centre. To compete for a greater share of the international arbitration SIAC prints its communications and awards in both Chinese and English, what’s more it adopted the international arbitration act (IAA), which is based on the 1985 Model law on international commercial arbitration published by the united nations commission on international trade law.
From the above introduction, we can find out that the international arbitration play the important role in the international businessandeveryinternationalcommercialarbitrational institution try its best to develop its share in the international arbitration, but the way seems almost the same. They always pay attention to the parties?autonomy. Theycontinuously modify the rules for arbitration so as to give the more choice to the parties to decide. To some degree, the measure took some effect. But there are not some inherent changes. It is well known the party autonomy is the basic advantage for the arbitration. So if one institution wants to increase its share in the international arbitration, it has to find out the existing real disadvantages and overcome them.
As mentioned above, arbitration has so many advantages comparing with the litigation. But it still has very serious shortcomings, and the well-known main shortcomings are expense and delay. Especially, with the rapid development of digital technology, the procedure of international commercial arbitration seems obsolete. Mr. Justice Lander’s ever stated: the arbitration process has been perceived ?as having similar shortcomings to the litigation process. The perception is that the procedures in arbitration are not much less cumbersome than the procedures in the litigation process.
Arbitration is still slow and inconvenient.
Arbitration proceedings often take years. Although it may be short than the litigation, it is too long for the rapid development of new digital technology society. If it deals with the hi-tech case, arbitration will become unsatisfactory procedure. Paul D. Carrington ever stated: a few years ago, he met a lawyer from San Francisco who had made twenty-four trips to Asia to participate in the resolution of a single dispute. He reported that the arbitrators who would listen to one witness a week. The witness came from diverse places in Asia and North American. Although this case is a very extreme example, it reflects the reality in some sense. The parties of arbitration live in different countries, the arbitration institution is located in another country, and maybe the arbitrators live in other countries. All of them have to meet in certain place at certain time, but it maybe need a long time to meet together. For instance, if one party is in China, the other party is in Brazil; the arbitrators live in Australia, Russia and the United States. The parties select the arbitration committee in Stockholm, maybe Chinese party needs very long time to get the visa, and Brazil Party is the same. Thus, all of them need spend a long time to start hearing and it is obvious that how inconvenient it is. Sometime, the hearing will be held several times. In some circumstance, in order to correct consequential errors of the expediter, it might be necessary to suspend the hearing while additional is added to the submission. But such interruption will prolong the procedure and make the procedure more inconvenient. The absolute claim that arbitration is quicker than adjudication is simply no longer true.
Arbitration is still expensive.
The direct cost of arbitration mainly includes: (1) the arbitrator’s fee; (2) expenses for arbitrator travel and hearing room rental; (3) the cost of site inspection or experts appointed to assist the arbitrator; (4) legal fee.
Among these fees, legal fee usually takes up most part of the whole cost. The parties have to appoint lawyers to deal with the dispute except very simple case, because the law is very complexity. Legal fee main depends on how much time the attorneys spend. The longer the procedure lasts, the more legal fee is charged. At the same time, the disputes are often concern with professional knowledge, arbitrators have to appoint experts to assessment. The expense of employing these professionals is very high. In addition, the parties and their lawyers and arbitrators usually live in different countries, they have to make international trip to deal with the disputes. The transport fare is also very high. Hence, slow processing of arbitration will waste time and leads to the higher expenditure.
At present, because of these disadvantages, arbitration has been facing significant competition over the last few years from new tools of alternative dispute resolution (ADR) such as negotiation, mediation, conciliation, and mini-trials. These ADR mechanisms have been consistently advanced as alternative meant either to complement arbitration or to displace it altogether. So, arbitration institutions must make use of the advantage of new digital technology to short the processing, decrease the inconvenience and low the expense.
With the quick development of the Internet, e-commerce plays a more and more important role in economic growth. The development of e-commerce also makes online arbitration possible and necessary. The benefits of online arbitration are obviously. The first, convenient. The Internet has created new opportunities for parties to communicate and to engage in transactions at great distance. At the same time, the potential for disputes arising out of such communications or transactions between parties that are physically remote from each other has been increased. On-line facilities can eliminate the barrier of distance. There is no need for the parties and their lawyers and the arbitrators to travel from one side of the Planet to the opposite side. The second, speed. Speed is equal to distance divided by time. The elimination of the barrier of distance by the Internet and the use of the Internet as the medium for resolving disputes will increase the speed with which the dispute-resolution process can be conducted. The third, affordable. Since the cost of post and travel is reduced, and the duration of the proceeding is decreased, the arbitration cost will be decreased accordingly, thus the total
cost will be reduced to an affordable level.