“Arbitration is a non-judicial process for the settlement of disputes where an independent third party – an arbitrator – makes a decision that is binding.”
Chartered Institute of Arbitrators
In this non-court alternative method of dispute resolution, an arbitrator, or panel of arbitrators, is appointed by the parties who are involved in the dispute. The parties can agree their own arbitration rules or agree that the arbitration is to be subject to the rules of an arbitration body or institution – e.g. the London Maritime Arbitrators Association (LMAA) (ad hoc arbitration) or the International Chamber of Commerce (ICC) (institutional arbitration). If the arbitration is in London (a very popular choice for international arbitration), there are only a limited number of mandatory provisions applicable by virtue of the Arbitration Act 1996; the parties are otherwise free to agree the regime they wish to apply.
The benefit of arbitration is that it can be quicker and less costly than going to court, yet the award is binding and enforceable in many jurisdictions thanks to the New York Convention. This is the difference between arbitration and mediation, where in mediation the settlement agreement is not immediately enforceable. That said, the mediation settlement agreement can often in practice be drawn up as a consent judgment or award and thereby be widely enforceable.
Arbitration is often used for the resolution of commercial disputes, particularly in the context of international commercial transactions.
Choosing the right arbitrator is key, particularly where certain expertise is required.
With over 40 years’ experience in a wide range of disputes including complex, high-value and international matters, Jonathan Lux of Lux Mediation, is frequently appointed as an arbitrator in complex international trade, maritime and motorsports disputes.
The great advantage of Arbitration is that, under the New York Convention, an Arbitration Award is more widely enforceable than any court judgment.
Contact us to start discussing your arbitration case today.