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InternationalArbitration or Litigation?

February 4, 2020

An everlasting conundrum that has always captivated the minds of lawyers and businesses alike is the preference of arbitration over litigation.

Litigation is an age-old concept that has been and shall be a part of the legal system. With the various courts and its appeal system running millions of cases across the globe, questions were raised on many occasions as to the relevance or importance of arbitration.

The concept of arbitration was born out of the negative aspects of litigation as time became a huge factor in solving a court litigation especially in common law jurisdictions where the multiplicity of proceedings has plagued the legal system and justice for long.

Litigants getting battered by the efflux of time in a long-drawn court battle is a common feature in every populous country.

Arbitration came as a hope for many businesses as Corporates unlike individuals will not prefer going through the myriads of complex court procedures for ever. What mattered to them most is time is money.

Arbitration is quicker, more focused and time bound.

It is not that it does not get prolonged but compared to the court process, it is certainly faster and probably in the longer run cheaper.

The parties do get a chance of choosing the Arbitrator/s while in a court proceeding there will be a change in the judges according to the Roster. This gives an edge to arbitration as the chosen Arbitrator/s are always hands on in the case.

The concept of evidence in arbitration is also less cumbersome than in court proceedings. The Arbitrators do have an option of deciding more flexibly about the admissibility of any issue in evidence compared to their counterparts in Court.

The award of damages/compensation in the form of legal and arbitral expenses is an important feature in arbitration which is lacking in most court drawn proceedings.

The other advantage of an arbitral award is the limited scope of appeal. Unless there is a gross error on the face of it or a gross error in the law, it is almost highly improbable to set aside an award.

Overall, arbitration is a beacon of light for the Corporates who are more focused in business than litigation.

Institutional arbitrations are day-by-day becoming more popular than Ad Hoc arbitration due to the framework and system which helps the parties to understand and plan the course of action and deliverables in advance.

Thus, one can safely say that arbitration has changed the course of litigation especially for successful businesses.