HomeFWJ TakeawayInternational arbitrationWhen is arbitration used?

Arbitration is a contractual agreement. It can therefore only be used in circumstances where the parties agree to resolve their disputes by arbitration.

As arbitration is meant to be a more cost effective and faster alternative to dispute resolution, arbitration is commonly used in commercial disputes, which span a wide range of areas.

  • in international disputes, due to the New York Convention, it is easier to enforce arbitration awards than foreign judgments in most jurisdictions.
  • therefore, it is usually more attractive for parties to agree to submit their disputes to arbitration rather than litigation.

Finally, in disputes that concerns states, due to international law, sovereign states are usually exempt or unwilling to subject themselves to  the laws of another foreign Court. Therefore, arbitration in such cases is the only method of resolving such disputes.

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