COMMERCIAL ARBITRATION

JUDr. Stanislav Kuba

senior lawyer

1. DISPUTE RESOLUTION

LITIGATION
Lengthy, costly, irreparable
breakdown of a relationship
ARBITRATION
Short, cheaper (not cheap), more
amicable
MEDIATION
Not binding, not obligatory

2. ARBITRATION (part I)

REPUTATION OF ARBITRATION
EFFECTIVE METHOD OF RESOLVING
BUSINESS DISPUTES
CORRUPT AND UNFAIR TREATMENT OF
CUSTOMERS BY ONE BIASED ARBITRATOR

2. ARBITRATION (part II)

DESCRIPTION an alternative to legal action before state
courts to settle an unresolved civil dispute.
Relationship commercial contract + arbitration clause. CIVIL
property, contract, construction, NOT insolvency, criminal,
matrimony (divorce)
Dispute parties interact and one of them feels that is damaged
that a breach of the contract has occurred. It is not certain.
Engagement of lawyers when and how?
First strategic step arbitrate or not to arbitrate? State court?
Arbitration

Arbitration agreement before/after dispute

Filing an action
Constitution of the tribunal NO JUDGES
Proceeding + oral hearing specifics
Decision of the tribunal
No appeal
Enforcement

2. ARBITRATION (part III)

TERMINOLOGY:
arbitrator
arbitral tribunal
award
arbitration agreement

2. TYPICAL FEATURES
PRIVATE PROCEEDINGS secret (behind closed doors),
confidential
ADJUDICATED BY EXPERTS choice of arbitrators sole
arbitrator, three, five, parties know who will solve their
dispute:

Positive expert (technical fields, special knowledge), renowned

scholar, practitioner, parties influence the choice

Negative after the tribunal has been chosen the dispute is

decided, influence on arbitrators, relations and lack of independence

FLEXIBLE all is about consent and agreement

EASY INTERNATIONAL ENFORCEMENT not
everywhere (EU enforcement of court decisions is much
easier)
CHEAP arbitrators expenses, administrative costs for the
Arbitration Court, legal counsels fees (these are significant

3. PRINCIPLES OF ARBITRATION
HISTORY
PURPOSE
NATURE
Quasi judicial method
Settling civil disputes

ARBITRATION AGREEMENT
signed
in writing

4. ARBITRATION CLAUSE
Any dispute arising out of or in connection with
this contract, including any question regarding its
existence, validity or termination, shall be referred
to and finally resolved by arbitration in [ country ]
in accordance with the arbitration rules of
[ arbitration institution ] for the time being in force,
which rules are deemed to be incorporated by
reference in this clause.
ICC:
All disputes arising out of or in connection with the
present contract shall be finally settled under the
Rules of Arbitration of the International Chamber of
Commerce by three arbitrators appointed in

5. ARBITRATORS AND AWARD

ARBITRATORS

Courts/ad hoc
Number not even 1,3,5,7,
Conditions to be met person
Impartiality
Who would you pick? Why? What would be the
criteria?

ARBITRAL AWARD
Law/equity
Final and binding
Signing who and how to force them?

6. SPECIFICS OF ARBITRATION
SPECIFICS

Attending party + lawyer (no public)

Parties usually sit
Atmosphere should be much more informal
Tendency to seek compromise it is a good and
fair settlement when neither party likes the
outcome, but agree to it. Not sure.
Procedural steps much more informal rules
loose. All is about agreement.
No appellate proceedings