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Arbitration
Institutional arbitration is conducted under rules of procedure issued by an arbitration institution.
It is this institution expressly designated by the Parties in the arbitration agreement of their contract which will then manage the procedure. These institutions generally have their own arbitration rules to which reference should be made for the choice of arbitrators in particular. A team of professionals is present within each arbitration institution to organize and administer the procedure.
When arbitration is said "Ad Hoc" it is a procedure conducted without recourse to an administrative authority and therefore usually without the aid of rules institutional procedures. These rules may therefore be the subject of a debate during the procedure between the Parties who will then have to cooperate to appoint in particular the arbitrators who will resolve the dispute without institutional control.
The use of arbitration is valuable, particularly in the context of disputes that require the experience of business experts. It is also an asset concerning the procedural delays which can be more controlled.
The choice of one or the other form of arbitration therefore deserves careful analysis by the Parties when drafting the arbitration clause (or arbitration clause), beyond the sole criterion of the institution's costs.
Avantages essentiels
Arbitration proceedings are not public.
The arbitration proceedings (including the hearings) are not accessible to the public . The parties and the arbitrator are often subject to strict rules of confidentiality. Thus trade secrets and sensitive information can be protected from the curiosity of the public, the press and/or competitors.
Referees are experts.
The parties are entirely free to choose the arbitrator, provided that the latter is impartial and independent. Arbitrators can be chosen from various nationalities and professions. This guarantees the personal and professional expertise of those who decide a dispute.
Arbitral awards are subject to forced execution.
Arbitral awards are subject to forced execution in France and abroad. Thanks to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958, arbitral awards can be enforced in many countries more easily than state court decisions.
Arbitration procedures can save time and money.
The tailor-made procedures and the impossibility of appealing and/or requesting a review of the award allow conclude arbitration proceedings within a relatively short period of time. Other costs can be saved by choosing a common negotiation language and/or an easily accessible meeting place, as this unnecessary costs of translation and/or travel can be avoided.
