Arbitration in the law is a sometimes unrecognized procedure that offers an alternative to going before a judge when resolving disputes.
What Is Arbitration In Law?
The sole arbitrator or panel of arbitrators is commonly referred to as an “arbitral tribunal”. An arbitral tribunal is intended to play the same role as a judge of a state tribunal that is to say to decide the dispute independently and impartially, on the basis of the arguments and evidence of the parties to the dispute depending on the rules of applicable law or, if the parties have authorized it, on equity.
The decision of an arbitral tribunal is called an “arbitral award”. An arbitration award is binding on the parties to the dispute, as is a decision by a state judge. If a party refuses to comply, it can be enforced by implementing the same enforcement measures available to enforce the decisions of a state judge.
What Is The Difference Between “Institutional Arbitration” And “Ad Hoc Arbitration”?
The international arbitration is said to be “institutional” when it takes place under the aegis of an arbitration institution which proposes its own arbitration rules and ensures the smooth running of the procedure. Arbitration is said to be “ad hoc” when it takes place without the assistance of an arbitration institution.
There are many arbitration institutions (local, regional, international, specialized in certain sectors or type of dispute, etc.). The largest international arbitration institution is the International Court of Arbitration of the International Chamber of Commerce (ICC). It is headquartered in Paris and receives several hundred arbitration requests from all over the world every year. It has thus developed an unequaled experience and reputation.
In institutional arbitration, the role played by the arbitration institution varies from one institution to another, with some institutions being more “interventionist” than others.
In general, the institution intervenes:
- When the Arbitral Tribunal is set up, to appoint one or more arbitrators if one party is in default, if the parties do not agree on the choice of a sole arbitrator, or other similar circumstances.
- The institution may be seized of a request to challenge an arbitrator in the event of doubt as to his impartiality, his independence or other, to allow his replacement, if necessary.
- The institution administers the provision for arbitration costs (fees and costs of arbitrators, administrative costs of the institution, etc.). The institution collects the provisions paid by the parties, pays the arbitrators, and transfers any possible surplus to the parties at the end of the procedure.
- Some institutions provide formal control of arbitral awards before their notification to the parties.
- The institution notifies the award to the parties
In addition, the arbitration institution, which is familiar with its rules, can enlighten the parties on certain procedural points.
Thus, institutional arbitration offers certain guarantees of procedural efficiency, at a generally controlled cost (depending on the amount in dispute), where ad hoc arbitration is largely based on the goodwill of the parties to the dispute. However, ad hoc arbitration benefits from other intermediaries in the event of difficulties in setting up the tribunal. For example, the “support judge” may be called upon to appoint an arbitrator in place of a recalcitrant party.