INTERNATIONAL COMMERCIAL ARBITRATION: FROM A USER'S PERSPECTIVE: Are the Benefits More Theoretical Than Real?

Article excerpt

Concern about the time and cost of arbitration have led to some criticism of international arbitration. The author demonstrates that at least half of the benefits of arbitration are easily realized without extra effort, but to control the time and cost requires the attention of all participants in arbitration.

Sir Christopher Staughton, a former judge on the English Court of Appeal and international arbitrator, stated in 1995: "We arbitrators should take care: If customers do not like our product they will go elsewhere." His statement was right then and is true now.

Dissatisfied users of international arbitration will cease to use arbitration and new users will not materialize unless weaknesses in the process discussed in this article are remedied. A vital step in this direction is for arbitrators and arbitration institutions to focus on what users expect from the process and make every effort to deliver on those expectations. In this particular regard, arbitration is no different from any other service. To give users of the service what they want, those who provide these services must have knowledge of the problem in order to devise needed remedies.

For example, the patient waiting nervously at a doctor's office wants a diagnosis and a cure for his ailment. But in order to be capable of giving the patient what he came for, the doctor must take a medical history that includes finding out the patient's symptoms. Ideally the doctor should also uncover the patient's other concerns, such as the cost of the proposed treatment and whether the patient can afford to comply with it. Only in this way can the doctor come up with alternatives that satisfy the patient's needs.

As part of their training doctors are taught to gather information about the needs of the people who use their services. But arbitrator training has mostly focused on learning arbitration procedures. This is also the focus of most international arbitration conferences I have at - tended over the years as the legal director to a multi-national aerospace company. Even when organized by a venerable arbitration institution, these programs tend to be created by arbitrators (many of them eminent in the ADR field) for arbitrators or would-be arbitrators. Most presenters extol the virtues of arbitration as an alternative to national courts, and its multiple benefits for users. How ever, are these benefits actually realized? Has anyone asked users about this? If not, why not? And how often do users have the opportunity to speak publicly at arbitration conferences about the experiences they have had (both good and bad) with arbitration, and more importantly, about their needs and concerns?

Without users, there will be no arbitration. Therefore, if arbitration is to play a meaningful role in resolving international commercial disputes in the next decade and thereafter, arbitrators and arbitration organizations must listen to users. They must take affirmative steps to learn each user's requirements and expectations. This is essential if arbitration is going to satisfy the user.

While it sounds simple, providing an arbitration process that satisfies each user is not as simple as it sounds. Any process that involves more than one person has the potential for problems, conflicts and differences of opinion. Because arbitration is a voluntary process, even when the parties agree to use the rules of a particular arbitration institution, there is a great deal to agree upon, and therefore many opportunities to lose sight of the user's goals for the arbitration.

My Goals for International Arbitration

My goals for arbitration when my company has an international dispute with a third party are quite simple: to reach an acceptable resolution as quickly and as inexpensively as possible, with the least disruption to the business and the business relationships that have been established. Is arbitration a suitable means of achieving these objectives? …