Magazine article Dispute Resolution Journal

Arbitration in a New International Alternative Dispute Resolution System

Magazine article Dispute Resolution Journal

Arbitration in a New International Alternative Dispute Resolution System

Article excerpt

The following article is derived from Francisco Orrego's presentation at the ICC/AAA/ICSID Joint Colloquium held in Paris last year. He discusses the future role of arbitration in an emerging international dispute settlement system and investigates whether arbitration can truly be considered a part of the ADR mechanism.

As trade, investment, and private businesses expand throughout the world at increasing speed, dispute resolution systems face growing challenges. In fact, just as domestic court proceedings have been overwhelmed by the demand on their services arising from expanding economies and social life, so too international dispute resolution is facing the need to develop the appropriate responses.

An international alternative dispute resolution system (ADR), combining renewed traditional mechanisms with new approaches, is already in place and will no doubt be perfected in the years ahead. This article will explore some of the features of this new system, with particular reference to the role of arbitration in it.

Is Arbitration a Part of ADR?

Can arbitration really be considered a part of the ADR scenario? Historically, arbitration was indeed born as an alternative to the submission of disputes to the ordinary courts of justice, both domestically and under international law.

But what is the situation today, particularly in trade and business matters? Domestically, at any rate in the United States and the United Kingdom, arbitration is generally considered a form of ADR. Internationally, however, the answer is not quite so clear. The International Chamber of Commerce Amicable Dispute Resolution system (ICC-ADR), for example, excludes arbitration.1 But other institutions in the field, such as the London Court of International Arbitration (LCIA), do not seem to take the same view and both arbitration and ADR appear to be considered as alternatives, albeit each with its own characteristics.2

The answer probably lies in the path that arbitration is likely to follow.3 It has been noted that arbitration has evolved towards more structured forms that make the differences with court adjudication less meaningful. In point of fact, many times the strategy pursued by lawyers litigating in arbitration is not too different from that used in the ordinary courts of justice. Sometimes arbitrators tend to approach the procedure in a similar manner.

Should this approach prevail in the future, then it is probable that ADR will become an alternative not only to the courts but also to arbitration as it is characterized by a greater degree of flexibility and fewer formalities.

Keeping a Reasonable Distance from Courts

However, there is still another dimension that needs to be considered. The option of alternative dispute resolution generally indicates a degree of dissatisfaction with court systems. The goals of ADR have been described as pursuing the relief of "court congestion as well as undue cost and delay; to enhance community involvement in the dispute resolution process; to facilitate access to justice; and to provide more 'effective' dispute resolution."5 The delay of courts in resolving cases, the complex and costly nature of adjudication and the lack of specialization to deal with new issues have rendered formal adjudication many times inaccessible or ineffective.6 ADR itself is not exempt of course from criticism,'7 but it is generally considered a viable approach to cope with such difficulties.

The point to be made is that arbitration is also a viable approach to cope with those same problems and hence it does not fall within the same degree of dissatisfaction as courts do. The increasing demand for arbitration and the active role of the leading institutions in the field is hardly indicative of dissatisfaction with this particular method.

In this light, it is to be expected that if arbitration keeps a reasonable distance from ordinary court proceedings it will be as much a part of ADR as other methods, safeguarding of course its basic features of due process and adversarial approaches to dispute settlement. …

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