Arbitration is a fast method to resolve disputes
Arbitration is an alternative dispute resolution method to court proceedings. Arbitration has constantly become more popular and strengthened its position. It is an important dispute resolution method in contractual disputes between companies. From companies’ point of view, arbitration is preferred to other dispute resolution methods because of the expertise of the arbitrators, confidentiality of the proceedings, effectiveness with regard to the length of the proceedings and the possibility to get the award recognized and enforced internationally.
Length of the proceedings
One of the most essential advantages of arbitration compared to court proceedings is the speed. The length of the court proceedings is normally long already in one court. A significant factor with regard to the length is the appeal system, which means that in private law related disputes three courts may handle the case. Especially in high interest commercial disputes the possibility to appeal is very often used.
Arbitrators resolve the dispute in less than a year
The award given by the arbitrator or arbitrators is final and the main rule is that there is no chance to appeal. The lack of an appeal system makes the total length of proceedings relatively short. According to the rules of the Arbitration Institute of the Finland Chamber of Commerce the award must be given in less than nine months from the beginning of the proceedings.
Parties can affect the length the of the proceedings
The parties can affect the length of arbitration by agreeing on certain parts of the dispute. The choice of the number of arbitrators can affect the length because possible difficulties with regard to the compatibility of arbitrators’ timetables can delay the process. The arbitral tribunal often gives the award faster in one arbitrator tribunal than in arbitrations with several arbitrators.
The parties can also agree on the maximum length of the proceedings in the arbitration agreement although too strict a schedule can lead to requests of extension of time and therefore lengthen the process. When the interest in the dispute is relatively small and the case relatively clear, can parties choose the expedited arbitration in which the dispute is resolved by one arbitrator and the award is given in three months.
The dispute resolution clause
Parties to a contract can agree on arbitration as a dispute resolution method when the dispute is about a matter that can be resolved by an agreement.
It is common that parties include an arbitration clause in their main contract stipulating that any dispute, controversy or claim arising out of or relating to that contract, or breach, termination or validity thereof, shall be finally settled by arbitration. Arbitration clauses are especially applied in shareholder, consultant and distribution agreements and also related to different transactions such as mergers and acquisitions.
Do you need advice with regard to arbitration? We at Lindblad & Co Attorneys Ltd have handled many arbitration processes in Finland and abroad. We are familiar with proceedings conducted according to the rules of Finland Chamber of Commerce, the COMI Rules of Arbitration and the rules of Stockholm Chamber of Commerce.
Please do not hesitate to ask how to prepare for arbitration in contracts and how different alternatives and options have effect on costs, international enforcement and the length of the proceedings.