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International Arbitration: Is it Cost-Effective for Our Dispute?

Posted by M. Margaret Gonsalves-Sabola | Jul 20, 2018 | 0 Comments

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International arbitration has become increasingly popular as a way to efficiently resolve cross-border disputes. In recent years, critics claim that the method costs too much and takes too long. Is international arbitration suited for your dispute? A lot may depend on the parties and their attorneys' backgrounds.

Arbitration is an alternative to traditional litigation in a court. Like mediation, it is a more informal process than litigation. The parties work with an arbitrator, who is a retired judge or experienced attorney, to exchange information and documents. At the arbitration hearing, the arbitrator acts like a judge in ruling on objections and points of law while the attorneys question the witnesses and introduce exhibits. Unlike litigation, the parties can work with the arbitrator on phone calls and through email to resolve pre-hearing disputes, and the hearings usually occur in a conference room rather than in a large courtroom.

Problems with international arbitration arose recently because attorneys were demanding broader discovery and use of more strict rules, stretching the length of arbitrations to more than a year and building up expensive legal costs. Critics accuse attorneys trained in the common law or American court systems for trying to adopt methods better suited to litigation. People considering international arbitration should determine their attorneys' strategy. The choice will greatly affect costs.

Further, parties considering arbitrating a dispute that crosses international borders should consider the location of the arbitration and the law that applies in determining whether costs will be high. For example, relatively low arbitrator, attorney, and venue fees in some countries make arbitration there much more attractive than in the United States where arbitrators and attorneys charge very expensive fees.

Generally litigation is still more expensive and time-consuming than arbitration, particularly in international disputes. Local courts are ill-equipped to handle cross-border communication needs and the flexibility demanded when witnesses travel from overseas to testify. Courts still have more cumbersome procedural rules than in arbitrations, for the most part. When evaluating whether to use international arbitration, consider how efficient litigation is in the location where the case would be filed, versus where it would be arbitrated.

To find out more about international arbitration and mediation, visit Gonsalves-Sabola Chambers online or call the office at +1 242 326 6400.

About the Author

M. Margaret Gonsalves-Sabola

M. Margaret Gonsalves-Sabola is a civil and commercial litigation attorney and an accredited civil and commercial mediator. Margaret has over 21 years' experience in legal practice in the United Kingdom, Jamaica and The Bahamas.

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