Arbitration
Arbitration
Arbitration – pros and cons
We are often faced with the question whether companies or individuals should include an arbitration provision in a contract. Being an arbitration centre, we would naturally advise you to do so, but we would like to explain why. If you include a dispute resolution clause requiring arbitration as the first step in any dispute that may arise,, then any disputes “arising under or relating to” the agreement will be arbitrated.
Benefits of Arbitration
Arbitration avoids the whole process of a lawsuit. An arbitration involves just one or more arbitrators who are professionals trained to evaluate disagreements, and who would eventually rule on yours. They are often retired judges or else experts in different fields – engineering, medicine, etc.
Arbitration is less expensive and quicker by far than a lawsuit. It is a good idea to include this provision in your contracts.
Perceived drawbacks of arbitration
Unlike a court ruling, an arbitration decision cannot be appealed (that’s why it’s called “binding arbitration”) and can be set aside by a judge only if you can prove the arbitrator was biased or the ruling violated public policy. Arbitrators must be paid, so if you choose to use an institution like ours, then the arbitrators’ fees are fixed and capped making it less onerous.
In short, do include an arbitration clause, and specify the institution too – by naming it. This way, you will have access to our expertise, our panel of arbitrators at reasonable fee levels, and the support of our facility itself.