Facing with a commercial dispute, choosing form of dispute settlement is a matter worth considering due to the issues of economy, reputation and the level of minimizing damage to business activities. Commercial arbitration is a popular form of dispute settlement, but what are the advantages and disadvantages of this form in practice? Please refer to the article below with Lincon.
1. Form of dispute settlement by commercial arbitration
Commercial arbitration is a method of dispute resolution agreed upon by the parties and conducted according to regulations.
Dispute settlement by commercial arbitration must comply with the following principles:
– Arbitrators must respect the parties agreement if such agreement neither breaches prohibitions nor contravenes social ethics.
– Arbitrators must be independent, objective and impartial and shall observe law.
– Disputing parties are equal in their rights and obligations. The arbitration council shall create conditions for disputing parties to exercise their rights and fulfill their obligations.
– Dispute settlement by arbitration shall be conducted in private, unless otherwise agreed by the parties.
– Arbitral awards are final.
2. Authority of Arbitrator
The arbitrator will have authority to settle a dispute if:
– The parties have an arbitration agreement. This agreement must meet the form and content requirements. The Agreement must not be void or unenforceable;
– The dispute falls within the scope of the Arbitrator’s dispute resolution jurisdiction.
3. Dispute settlement using Commercial Arbitration, what are the advantages and disadvantages?
Firstly, the form of dispute settlement by Commercial Arbitration prioritizes agreement between the parties. The priority for agreement is that this method allows the parties to choose a convenient and optimal arbitrator, language, and location for dispute settlement. This makes commercial arbitration a popular choice, especially for disputes with foreign elements or cases where the parties want flexibility in implementation procedures.
Secondly, disputes settlement at Commercial Arbitration has the advantage of time. If a dispute settled at the Court goes through many procedures and levels of trial, dispute settlement at Arbitration will only have one level and the decision will be final. This will help save time for the parties and limit business interruption due to the lengthy dispute resolution process.
Thirdly, this method ensures maximum confidentiality for the parties according to the specifics of the implementation procedure. Arbitration shall be conducted privately unless otherwise agreed by the parties. This makes the form of dispute settlement by Arbitration more dominant as it helps the parties ensure trade secrets and business reputation.
>> CONDITIONS FOR DISPUTES SETTLEMENT BY ARBITRATION https://linconlaw.vn/conditions-for-disputes-settlement-by-arbitration/
>> SALE, PURCHASE CONTRACT OF OFFICETEL (OFFICE APARTMENT COMBINED WITH ACCOMMODATION), HOW IS REGULATED? https://linconlaw.vn/sale-purchase-contract-of-officetel-office-apartment-combined-with-accommodation-how-is-regulated/
Besides the outstanding advantages of choosing to resolve disputes by commercial arbitration, the parties also need to consider the following issues:
Firstly, dispute resolution and enforcement are not high but depend largely on the goodwill of the parties, because agreement and voluntariness are given high priority.
Secondly, the Arbitrator’s award may be required to be reviewed by the Court. A party can request the Court to review the award, accordingly, in reality there is a possibility that the Arbitral Award may be annulled even though it is final.
Thirdly, the cost of resolving disputes at Arbitration is often quite high compared to carrying out procedures at Court.
- Law on Commercial Arbitration 2010;
- Decree 01/2014/NQ-HĐTP.
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