International Arbitration and its Advantages

International trade and commerce are growing day-by-day with companies from different countries all over the world entering into cross-border trade agreements. Disputes can, and have, arisen in such agreements and there is a need to resolve them to prevent them from obstructing trade. When an international trade dispute occurs, it is important that the parties involved choose the best method of resolving the dispute. This article discusses international arbitration as a means of conflict resolution and its advantages in Singapore.

What is International Arbitration?

International arbitration is a method through which trade disputes that arise from international trade agreements are resolved. It is an alternative means of resolving dispute(s) between different parties involved in cross-border trade.

In international arbitration, parties involved are allowed to avoid local court proceedings. This method of dispute resolution applies different rules as compared to domestic arbitration. In this method, the parties involved agree to remove their dispute(s) from the jurisdiction of courts of law. The parties also have the autonomy to determine how the arbitration process will be conducted, and to a certain extent, the composition of the tribunal deciding the dispute. They have a say in the form, system and the structure of the process.

The arbitration award, the decision of the tribunal made to resolve the dispute, is final and binding on the parties. Once the parties agree to use international arbitration to solve their disputes, they agree to accept and honor the arbitration award.

Advantages of International Arbitration

International arbitration as a means of resolving disputes has gained popularity in the recent past. Many companies and businessmen involved in international trade have preferred to use this process to resolve their disputes.

The advantages of international arbitration are as follows:

  1. Award Enforcement

One of the key advantages of international arbitration is that the award is readily enforceable in many countries of the world. An award is a judgment passed by an arbitrator or arbitrators. For example, over 140 countries of the world are members of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and an award made in any of these countries is recognized and can be easily enforced in multiple countries.

  1. Complete Autonomy and Freedom

The parties involved in an international arbitration have the autonomy and freedom to decide on the form, system, and structure of the arbitration process. As such, they have full control of the process in terms of cost and time it will take to finish it.

  1. Flexibility

Judges are bound to follow the procedures set by national courts. International arbitration, on the other hand, provides parties with a lot of flexibility. One example is that parties involved in a dispute can decide where the dispute will be heard, i.e. where the seat of the arbitration is. In deciding where the hearing will take place, parties involved can chose any place in the world they are comfortable with.

  1. Neutrality

There is a fear that national courts can be partial when it comes to cross-border trade disputes. On the other hand, international arbitration provides assurances against the fear of any bias. Parties can choose arbitrators from different countries and even set up the seat of arbitration in a country with which the parties involved have no connection

  1. Privacy

If the parties involved prefer to maintain the privacy of their dispute,  international arbitration is the best method for resolving their dispute. An arbitration takes place in private and neutral venues. Details of the arbitration proceedings are kept between the parties involved and whatever is decided (i.e. the final award) will not be available to the public or any third party.

  1. Expert Arbitrators

There are disputes that require special expertise. In international arbitration, parties can select arbitrators who have specific knowledge or expertise in relevant areas.



From the above discussion, it is evident that international arbitration is the best alternative for resolving cross-border disputes. The neutrality, flexibility, privacy, and the autonomy enjoyed by the parties involved make it the most popular method of alternative dispute resolution among businessmen.