12.4.2 Arbitration仲裁
Arbitration is an Alternative Dispute Resolution(ADR)mechanism that aims to resolve disputes outside the courts.The dispute will be decided by one or more impartial persons—the “arbitrators”,or the “arbitral tribunal”,which renders the “arbitral award”.An arbitral award is final and binding on both sides and enforceable in a court,which implies that neither party can bring up an appeal at a law court or any other organizations and it is also more enforceable than a court ruling awarded by a foreign law court.
Table 12-1 A Comparison of Mediation,Arbitration and Litigation
Take the ADR center of ICC as an example,the fairness and effectiveness hinge highly on the procedures followed by the Arbitration Court under the Center,particularly the constitution of the arbitral tribunal.The Court administers the arbitration including theestablishment of the arbitral tribunal,which is set up for a particular dispute.According to the Rules,the number of arbitrators could be one or three.In the case of a sole arbitrator,it could be jointly nominated by the disputing parties or in the absence of such agreement,appointed by the Court.In the case of three arbitrators to make an arbitral tribunal,each disputing party can nominate one arbitrator independently.The third arbitrator,serving as the presiding arbitrator,shall be jointly nominated by the parties or appointed by the Court.The arbitrator or arbitrators must undertake to work impartially and independently on the case,which is ensured by certain key procedures,one of which requires the arbitrators to disclose any information that might lead to the questioning of their impartiality and independence; another allows for challenge raised by the disputing parties concerning an arbitrator’s impartiality and independence,and if the questioning and challenge is well grounded,the Court may administer a replacement of the arbitrator or arbitrators in question.Some of the merits of arbitration compared with mediation and litigation are summarized in Table 12-1.
It should be noted,however,the tricky side about an arbitration lies in the difficulties of enforcing a foreign arbitral award.As an arbitral tribunal doesn’t possess the enforcement power,a foreign law court is still needed for executing the award.Even though there is the Convention on the Recognition and Enforcement of Foreign Arbitral Awards in place and 142 countries have signed the Convention as of 2007,attitudes of member countries toward a foreign award vary.Some countries,such as France,Germany and Greece,treat it as a domestic award and therefore are more supportive in enforcement.Others,such as the UK and US,treat it as a liability under a contract which has to be converted into a domestic award before it can be enforced,but the conversion normally requires a review of not the contents but just procedures of the arbitration.Still others,like Italy,Spain,Portugal,Turkey,Egypt,Iran,the Philippines,Thailand,India,etc.,even though are signatory countries to the Convention,treat a foreign arbitral award as a court ruling,so,they review not only the procedures but also the contents.Obviously,enforcing a foreign arbitral award is most difficult in the third group of countries.Sometimes,a case resolved by arbitration is even not as good as one by litigation in terms of money,efforts andtime required.Therefore,when you draft the arbitration clause of your contract,don’t forget to learn about the judicial environment of the importer’s country or a third country.