Arbitration is a method aimed at solving conflicts between two or more parties. It functions as
an alternative to a judicial process in which a third party, identified as an arbitrator,
intervenes to make a decision. The resolution is not a sentence, but a private act called an
arbitral award.
Arbitration may be similar to a trial as the parties present their cases, provide evidence for
their claims, and based on this a decision is agreed upon. However, in this case, the
resolution is jointly established by the parties involved, not by a judge.
Arbitration protects the independent will of all parties.
> It may be of your interest to read our entry: Advantages of the arbitration service for
firms.
Different types of arbitration may be convenient depending on the particularities of each
case. An adequate legal advice can orientate you as to the optimal form of arbitration you
should use.
Aspects of arbitration:
1. Principles:
○ Equality:
The resolution of any conflict is based on the arbitrator’s knowledge and
understanding, invariably motivated by his or her sense of fairness.
○ Rights:
The arbitrator will resolve the discrepancy based on criteria founded in laws
and rules applicable to the contract.
2. Jurisdiction:
○ National:
The arbitration process is regulated under national law and is subjected to a
country’s legislation, thus the parties must hold the same nationality.
○ International:
It is applicable when the individuals, natural persons or legal entities are
originally from different countries and are thus subjected to independent
legislations.
3. Administration:
○ Ad hoc:
There is no institution capable of administering the system. The parties
become responsible for organizing and acting for the arbitration to proceed.
○ Institutional:
The parties handpick a specialized institution to solve the conflict. There is a
specific set of rules and instruments to properly conduct the process.
4. Will of the parties:
○ Voluntary:
When a conflict arises, each of the parts will choose an alternative method to
solve it. They will resort to it voluntarily, willing to reach an agreement.
○ Obligatory:
The arbitrator and the conflicts to be solved are determined by the law, given
that this is considered to be the only process capable of solving certain
issues.
Mediation is another method that allows the resolution of conflicts without the need to attend
to court. However, there should be a clear distinction between mediation and arbitration
in order to know when either is the optimal approach.
At QuAdrans Law and Finance we have arbitrators capable of solving any type of
discrepancy in a neutral manner without the need to resort to court.
