How to settle international trade disputes through arbitration
In business transactions, differences or disputes are inevitable. Generally, they need to be settled by the parties through negotiation, through legal channels. There are two main ways to solve civil disputes in law. One is court litigation, and the other is dispute resolution, which mainly includes reconciliation, third-party mediation and arbitration. Reconciliation mainly refers to that both parties reach an agreement on relevant disputes or differences through negotiation; Third party mediation mainly refers to the mediation of the intermediary, and both parties reach an agreement on relevant disputes or differences.
Compared with court, arbitration has unique advantages, such as high autonomy of will, final adjudication, flexibility, enforceability of award, professionalism, economy, confidentiality, independence, etc.
- high willingness
Because arbitration is based on the willingness of both parties, that is, whether the disputes between the parties are submitted to arbitration, which disputes are submitted to arbitration, who is to be submitted to arbitration, how and by whom the arbitration tribunal is composed, as well as the hearing method, hearing form, hearing place, hearing language, the main contents recorded in the award are determined by both parties through consultation on the basis of the willingness of the parties.
- A final decision
Once the award is made, it will have legal effect. Even if the parties are not satisfied with the award, they cannot bring a lawsuit to the court again. Therefore, the final award excludes the possibility of the first instance and the second instance, so as to avoid the intentional use of procedural rights by one party in court proceedings. Reduces the cost of dispute resolution and improves the efficiency of dispute resolution.
- Confidentiality
The trade secrets, trade activities and award results of the parties will not be disclosed due to arbitration activities. Based on the above advantages, arbitration should be the first choice for dispute resolution in international trade.
- Enforceability of award
If the award cannot be enforced, it is useless. However, at present, there are few countries to recognize and enforce the judgments or rulings made by foreign courts. From the perspective of enforcement, arbitration has almost become the only optional dispute resolution to solve international trade disputes. In 1927 Convention on the enforcement of Foreign Arbitral Awards (as the “New York Convention”) Signed and entered into force internationally, the Contracting States recognize that arbitral awards made in the territory of the Contracting States shall be recognized as valid and enforceable in other Contracting States. On April 22, 1987, China officially acceded to the Convention. According to the Convention, arbitral awards made by arbitral institutions in the territory of any Contracting state must be recognized as valid and enforceable in China.
