Advantages Arbitration Over Litigation

Arbitration will generally begin when two parties agree to settle their dispute through arbitration. Arbitration clauses are becoming more common in contracts and Courts will normally enforce these clauses. Parties frequently seek to get their disputes resolved through arbitration as opposed to litigation because;

Speed: Arbitration is often faster than litigation in court, and a time limit or frame can be proposed on the length of the process. Disputes, which are taken to arbitration, can be resolved faster than lawsuits. Generally, lawsuits take between nine months to twelve months to go to trial while arbitrations can take place in less than sixty days.

Unlike in court where parties have no control, parties to arbitration can select an arbitrator with an appropriate and adequate degree of pragmatic experience.

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Arbitration is cheaper and more flexible, less formal and more commercial than litigation.

Unlike court rulings which are public, arbitration arbitral awards and proceedings are confidential.

Unlike in court, there are very limited and few avenues for appealing an arbitral award.

Arbitral awards can easily be enforced in other nations than court rulings and judgments according to the New York Convention of 1958.

Forum Selection: The parties in an arbitration can choose to hold the process in any location regardless of where the action took place.

Actions parties can take if one of the arbitrators has been absent for an

An arbitrator who absents himself can be disqualified on the ground of incapacity, manifest lack of the qualities required of arbitrator. Thus in a situation where an arbitrator absents himself for unreasonable time, parties to such proceedings may propose removal of such arbitrator. According to International Centre for settlement of investment disputes, procedure starts with the submission by a party of a proposal to disqualify one or more members of the Tribunal. A proposal to disqualify an arbitrator normally suspends the proceeding.

Parties to arbitration proceedings may also choose to apply to court to appoint his or her successor.

an arbitration agreement a con

An arbitration notice is a written request for arbitration and the claimant normally files it to give to the other party notice of arbitration. Notice of arbitration is important and must be served on the intended respondent as set out in the arbitration agreement so that the right party gets to know of it. Thus the sole purpose of filing a request or notice of arbitration is for the other party to know that a process of arbitration is to be commenced and sufficient notice is a condition precedent to actual process.

An arbitration agreement is not a condition precedent to the filing of an action in court per se since parties can merely agree to go for arbitration as a condition and courts normally have a duty to uphold such agreement. Simply put, arbitration does not oust the jurisdiction of a court to entertain suits. Depending on the circumstances, where a party refers a court to an arbitration clause, courts will normally give such a clause effect considering that arbitration agreements are binding in nature.

An arbitration agreement simply put is a written contract in which two or more parties mutually agree to settle their dispute outside court. An arbitration agreement is customarily a clause in a larger contract.

What are Domestic Arbitral Awards and Foreign Arbitral Awards?

Domestic arbitral awards are arbitration awards devoid of any international or foreign element or content. They are made within the local jurisdiction of a state and neither the parties nor the subject matter of arbitration has any international feature. On the other hand and according to New York Convention of 1958, an arbitral award qualifies as foreign in two situations: a when the award is made or delivered in the territory of another State, or b) when it is not considered a domestic award in the State where recognition cum enforcement is sought.

An example of project location is like having territorial disputes between two countries and independent team of arbitrators is appointed to consider the matter in another country not in dispute. Parties subject to foreign arbitral award should have elements of international content.

Convention award

Convention awards’ aim is that foreign arbitral awards will not be discriminated against and it obliges and mandates Parties to ensure that foreign awards are recognized and enforced in their jurisdiction just like domestic awards. The Convention on enforcement and recognition of foreign arbitral award for example requires courts of Parties to give full effect to arbitration agreements. Therefore, convention awards are important when enforcement of an arbitration agreement is under attack at domestic level.

A contract is a binding agreement between two or more people. An arbitration agreement is a written contract in which two or more parties agree to resolve a dispute outside court. An arbitration agreement can thus be said to be a contract because it contains a provision stating that by signing that agreement, you are agreeing to arbitration in any future dispute.

An arbitrator is appointed once both parties have signed an arbitration agreement and agreed to subject themselves to arbitration. An arbitrator should have capacity and qualities required of an arbitrator. One can be disqualified on grounds of incapacity and manifest lack of qualities.

Circumstances can an arbitral award in arbitration be vacated?

Any arbitrator and their appointments may be challenged if circumstances exist giving rise to justifiable doubts as regard his independence or impartiality from the start and during the proceedings. Article 14 of the International Chamber of Commerce outlines the procedure for such challenge. Whether for lack of impartiality, independence or otherwise, such a challenge shall be made by submitting a written statement to the secretariat specifying the facts and circumstances on which the challenge is premised and for it to be admissible, it must be submitted by within thirty days from receipt of notification of the appointment or confirmation of the arbitrator in question. The Court shall then decide on both the admissibility and merits of the challenge after the Secretariat has afforded the arbitrator concerned an opportunity and the other party or any other member(s) of the arbitral tribunal to comment in writing within a reasonable period of time. Parties and the arbitrators must be informed of such communication.

An arbitral award award may be set aside or vacated if the tribunal fails to deal with all the issues that are put to it for determination. If an award cannot be challenged because the tribunal reached a wrong result, it can be challenged on the ground that the tribunal did not consider natural justice and conducted the arbitration fairly.

Describe the different timescales between Mediation, Adjudication, and Arbitration

Mediation is voluntary and conducted on a ‘without prejudice’ basis meaning that the parties cannot refer to such matters in any future Court litigation. There is no defined timetable but according to International Chambers of Commerce, averagely four (4) months is enough.

Adjudication is where the decision is the sole responsibility of third party knowns an adjudicator selected by the parties to the dispute and normally adheres to strict timelines. It takes up to 28 days.

Arbitration is conducted in private as opposed to being in public and according to International Chamber of Commerce; it gives a deadline of sixty days (60) for an award to be out.

In Arbitration, what does a “stay in proceedings” mean?

Stay of proceedings generally is a ruling by the court in both civil and criminal procedure stopping further legal process in a trial or any other legal proceeding. The court can eventually lift the stay and resume trial or proceedings based on occurrences after the stay is ordered. In arbitration, where proceedings are brought in respect of a matter that is the subject of an arbitration agreement between parties, the other party is allowed to indulge court to stay the court proceedings that commenced so that the dispute may be referred to arbitration as agreed. Where a stay is granted, the court proceedings are halted indefinitely and paves the way for arbitration.

Identify a dispute that occurred in a construction project with which you were involved and explain the nature of the dispute.

A number of disputes have occurred and continue to occur in construction projects. This work covers one in which the author was particularly involved in Cardiff city during the construction of a multi-purpose block involving a private developer and a contractor whom the author had worked with for a while in 2016. The nature of the dispute was contractual in nature. The developer had contracted the contractor to complete the building of the block as soon as possible. This was after the commercial property owner or developer insisted upon acceleration of the construction project. Work expected done included the completion of major retail blocks, offices and the urgent need to meet opening date that had been announced.

The construction costs associated or linked with acceleration were likely to be way less than the commercial risks the developer could face if the date was missed. This meant that the contractor had to incur additional cost for acceleration purposes. The circumstances surrounding the dispute that would later arise was that even though the terms of acceleration were fully and properly analysed at the time the developer floated it and subsequent implementation by the contractor, the developer refused to pay additional costs incurred by the contractor as a result of accelerative measures inevitably leading to dispute.

Adjudication is the most appropriate dispute resolution method to the above dispute. Adjudication is a form of alternative dispute resolution that has seen a lot of successes in construction and building disputes. The Construction Act 1996 introduced it as a form of compulsory dispute resolution involving construction disputes. For purposes of this dispute, adjudication is opted because it involves a distinctly fast process that usually takes 28 days to completion with each party presenting their case usually in the form of a referral notice and/or response. The contract will usually outline how the adjudicator should be appointed but since in this case there was no such express agreement on how to appoint an adjudicator, the parties can decide to choose an adjudicator.

The decision in adjudication in this dispute will remain the sole responsibility of the adjudicator who will issue a binding decision after parties have presented their case. The main advantages of adjudication are speed and cost effectiveness of the proceedings and just like arbitration, privacy of parties is protected since contractors rely heavily on their reputations. It however, does have its drawbacks ranging from lack of oral evidence and tight timescales that may occasion injustice and lack of costs award.

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References

  • Article 14 of the International Chamber of Commerce
  • The Construction Act 1996
  • The New York Convention of 1958.
  • Books

  • Dupret, B. (2016). Adjudication in action: An ethnomethodology of law, morality and justice. Routledge.
  • Goh, B. C. (2016). Law without lawyers, justice without courts: on traditional Chinese mediation. Routledge.
  • Kaufmann-Kohler, G., & Rigozzi, A. (2015). International arbitration: law and practice in Switzerland. Oxford University Press.
  • Tushnet, M. (2017). Comparative constitutional law. In The Oxford handbook of comparative law.
  • Journals

  • Asimow, M. (2015). Five models of administrative adjudication. The American Journal of Comparative Law, 63(1), 3-32.
  • Kaplow, L. (2017). Optimal Multistage Adjudication. The Journal of Law, Economics, and Organization, 33(4), 613-652.
  • Lee, H., Herbert, R. D., & McAuley, J. H. (2019). Mediation Analysis. JAMA.
  • Mance, J. (2016). Arbitration: a Law unto itself?. Arbitration International, 32(2), 223-241.
  • Menkel-Meadow, C. (2018). Mediation 3.0: Merging The Old and The New. Asian Journal on Mediation, 1-20.

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