International arbitration has grown with time, and so have its critics. When given a reality check, arbitration is undoubtedly a great dispute resolution mechanism. However, as with other sister systems, it has its vulnerabilities, and the majority of its critics have pounced on these concerns to question the Legitimacy of international arbitration.
There have been several concerns by critics on the process and proceedings of international arbitration, which have led to Challenges to the Legitimacy of International Arbitration. This article will outline some of the criticism of International arbitration that tends to challenge its Legitimacy.
Challenges to the Legitimacy of International Arbitration
One of the major criticism of International arbitration is how its decision makers are selected, and this has led to a call from the system’s staunchest critics that it should be reviewed at the very least. Critics state that the ability to dispute parties to choose their own decision makers tends to give more power than is necessary to the parties and weakens the power of arbitration in itself compared to the national courts.
This claim, however, has been heavily refuted by professionals and stakeholders in the system with a counterclaim. Proponents of the party’s ability to choose their decision makers states that it makes the system fairer as the parties in disputes know they were responsible for the decision. With such acknowledgment, the party that has the ruling against it will be more willing to accept the award.
Another question on arbitration legitimacy and pretty much one of the strongest claims, is how costly and slow it can be for proceedings to be completed. Following a survey performed by
Mary/White & Case institution, 68% of the total respondents criticized the system for its high cost, while 39% stated that the system was extremely slow, leading to cost ultimately.
Lack of Regulation
Another criticism of arbitration legitimacy is its high level of independence. Critics are of the opinion that the system should be more under the control of states and domestic courts as it is presently too autonomous, and a bias arbitrator may give an unfair ruling that could be extremely unfair. The opinion of critics is that the system should be more relegated to avoid such situations.
This concern is a major issue in international arbitration as arbitrators’ refusal to adhere to disclosure obligations has only attracted more suspicion.
The ITA 29th annual Workshop: Challenges to the Legitimacy of International Arbitration
In an aim to address the challenges that international arbitration faces in terms of its Legitimacy, the Institute of Transactional Arbitration (ITA), in its Annual Workshop held annually, addressed these concerns. The workshop, which marked the 29th annual meeting, was held in Dallas from the 14th to the 15th of June 2017. The theme of the vent was unsurprisingly dubbed the “Challenges to the Legitimacy of International Arbitration” and was co-chaired by a number of top names in arbitration.
The meeting kicked off with Arbitrator Gary Keynote outlining some extremely important relationships between Legitimacy and international arbitration and how the system legitimacy has been challenged over time even before the recent concerns that now exist. He stated that despite the criticism on international arbitration, the system has remained and even outlived most concerns, courtesy of the evolution of its procedures.
Born expressed that the reason while the Legitimacy of international arbitration is valid and will continue to exist is because of its system of operation and how it gives every transacting individual anywhere in the globe the right to go into transactions, commerce, and trade. According to his argument, International arbitration is a healthy system for society. Even though
there may be a couple of limitations, states and different jurisdictions are yet to find a better system than it is.
While the National courts stand as an important part of dispute resolution, International arbitration trounces it as a notably fairer dispute resolution method that considers objectivity to bias. Concluding his speech, Born stated that until there is a better way for financing parties to protect their right, International arbitration will continue to stay and won’t be going anywhere soon.
Following Born Address, other speakers identified a number of Challenges to the Legitimacy of International Arbitration and sought to brainstorm ways to navigate through these concerns.
Challenges to the Legitimacy of International Arbitration are not new concerns, and most of the talks on it usually stem from its procedures and ruling process. However, the reality is that International Arbitration as it stands is more likely to improve than it will be abolished. The system has continued to serve both individuals, institutions, and states, and as far as Legitimacy is concerned, it can only get better.
However, it is important that you know the workings of international arbitration before going ahead with it. The ability to benefit from an arbitration clause highly depends on the treaty entered and the party you or your firm seek to go into business with. To get a full scope on international arbitration, hiring professional arbitrators or an arbitral firm that guides you through the system is best. With professional counsel and advice, you will be able to avoid the legal pitfalls of international arbitration and ensure you are not at the wrong end of an arbitration contract.
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Rattsakuten is a leading law firm focused on Commercial Arbitration and Dispute Resolution. Based in Sweden, Rattsakuten handles dispute resolution and Arbitration matters before the SCC (Swedish Chamber of Commerce), ICC, HKIAC, and several other Arbitration tribunals.