Will new guidelines improve the international arbitration process? Roger Hopkins investigates
The original purpose of arbitration was to provide a simple, quick and cost-effective method (outside the formality of the court system) for resolving commercial disputes. The attraction of arbitration for international commercial disputes was mainly driven by the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the NY Convention) which has given arbitration awards (unlike court judgments) almost global enforceability.
Unfortunately, as arbitration became the preferred means for international commercial dispute resolution (largely thanks to the NY Convention), so it became increasingly criticised for being excessively slow, complicated and expensive, in direct contrast to its original purpose.
The procedural rules in international arbitration are regulated by the law of the state in which the arbitration takes place (the lex fori) and by any specific provisions in the arbitration agreement, provided the latter do not conflict with the lex fori. With the rise in popularity of international arbitration, users sensibly sought countries in which to hold their arbitrations
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