In many international cases, arbitration has become a nomal practice and mainstay in resolving international legal disputes, compared with the court litigation, which is the mainstream in the domestic disputes resolution legal proceedings. However, every coin has two sides. It is necessary to learn about the advantages and disadvantages of the two dispute resolution techniques. And it’s always helpful for deciding whether or not to sign a contract that contains a arbitration clause if bear in mind such information.
Arbitration is a method of resolving disputes outside of a certain court. Parties refer the disputes to an arbitration tribunal which reviews the evidence, listens to the parties, and then makes an arbitration award in accorance with the arbitration rules of the chosen arbitration tribunal. Compared with a courtroon hearing or trial, the arbitration process is less formal and more flexible than a courtroom hearing or trial (and often less expensive), but much more formal than ADR such as mediation or negotiation.
Arbitration is more flexible, faster, more simplified rules of procedures and more private than the court proceedings, but it is usually more expensive than 1st instance court proceedings, with very limited channel for recourse and sometimes lack of transparency.
In the arbitration cases in China and most of the countries, the arbitration rules allow more than two interests-representatives of both the applicant and respondent and the said representative may be non-legal professionals while in court legal proceedings the number of representatives are limited within two and most of the cases they should be licensed Chinese lawyers. Also the place of arbitration, governing laws, language for arbitration, arbitration rules and all related arbitration key issues can be mutually agreed through the arbitration cluase, while the court always restrict in official language, procedure laws, etc. Arbitration take around six and nine months for getting a final award but it would be much more expensive than the court hearing process.
It is advisable to engage a lawyer before the disputes resolution process, better when preparing the contract rather than until a bit late when disputes arirse. Hiring attorneys for representing interests through the arbitration and litigation process is always recommended since the legal processionals knows how to protect your interest and get the best result under each specific situation.