International Commercial Arbitration or National Court
where to protect your business?
Fundamental Differences:
International Arbitration
The mechanism of resolving international commercial disputes that is agreed upon by the parties in an international contract
Public Court
A government body that dispenses justice in accordance with the procedural order established by the law of a specific country
1. Legal Framework
The UNCITRAL Model Law
The UNCITRAL Model Law on International Commercial Arbitration that many U.N. member states incorporate in their national legal frameworks, thus bringing about harmonization of standards regulating international arbitration (for example, in Russia, Law No. 5338-1 of the Russian Federation "On International Commercial Arbitration", dated 07.07.1993). Model Law provisions reflect the current pro-arbitration legal structure
Varies depending on which legal framework it belongs to. As a general rule, a dispute or a party in a dispute must have a connection with the country where the court is located. As a result, one of the parties may have the "home field" advantage and may be viewed with prejudice.
2. Procedure
Rules of Arbitration Institutes
Procedural rules are established independently by international arbitration centres. That said, they are based on the Rules of Arbitration developed by UNCITRAL. Similarities in the procedure make possible a virtually identical understanding of the rules of international arbitration proceedings everywhere in the world. The parties have the right to adjust procedural standards with respect to a specific dispute
Public courts apply national procedural codes or laws. They cannot be adjusted to fit specific cases upon the expressed will of the parties.
3. Enforcement of the Decision
Arbitral Award
Implemented in accordance with the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). 167 out of 193countries are parties to the Convention, which allows for the recognition and enforcement of an arbitral award in any one of them.
Possible only in the country where the decision was rendered. The other party may secure recognition of the court's decision provided there is a bilateral agreement between the countries, which is quite rare.
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