chapter
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INTERNATIONAL COMMERCIAL ARBITRATION

ARBITRATION AND INTERNATIONAL TRADE

Arbitration is the most common method of dispute resolution in international trade. It is a private means of dispute resolution based on the agreement of parties to refer their disputes to a private tribunal and to abide by its determination. It is preferred to litigation for a number of reasons. Arbitration tends to be speedier than litigation conducted in national courts. An arbitral tribunal is appointed to hear a particular dispute and will devote its full attention continuously to that dispute. Courts, by contrast, have long and varied lists of cases demanding their attention and sometimes a case may be protracted to the point where it has to be heard by a succession of judges. Although arbitral tribunals must observe the requirements of natural justice and decide according to law, they can adopt flexible and expeditious procedures. Arbitration allows the use of experts as adjudicators. Although arbitration can be more expensive than litigation to conduct, traders stand to gain in the long run because of the time saved in reaching finality. Besides, the costs of arbitration are borne by the parties and not the taxpayer. Traders often prefer the privacy of the arbitral process to the publicity that attends court proceedings.1