ARBITRATION IS CONFIDENTIAL.
In these days of global competition, you do not want to advertise your disputes by disclosing sensitive corporate information made public during a trial in court, or even before that when parties file documents in a court action. Arbitrations are not open to the public and the information the parties reveal to have their cases decided is kept strictly confidential. Even if the opposing parties learn certain proprietary information, they are not free to divulge it to anyone else. Research shows that corporate clients find this to be one of the main attractions of arbitration.
IF YOU NEED TO, YOU WANT TO FIGHT ON NEUTRAL GROUND.
Often your disagreement will be with a corporation, customer or individual who resides somewhere else than where you are located. In such a situation, they may sue you in a court in their home country where standards of justice may be different, even hostile to foreigners. Or, you may find that you cannot bring the case at home but must file suit in their country, often because a judgment obtained at home may not be enforceable in their home country where they have their assets. In arbitration, you can choose and agree with your contracting party where the case will be heard, thereby avoiding potential disputes related to venue.
YOU CAN CHOOSE YOUR OWN JUDGES.
You can choose who will decide your case. In a multi-panel arbitration, each party may choose its own arbitrator, and both selected arbitrators will hear the case together with a third neutral Chair-person chosen together by the two arbitrators who the parties selected. Or, both parties may decide to have only one arbitrator resolve the matter. Arbitrators are neutral and impartial, and have extensive experience with disputes often in your own industry. Who to choose as an arbitrator is a very important decision, like choosing a jury, and clients consult with experienced arbitration counsel who can assist and guide them in this process.
IT IS MORE EFFICIENT AND INEXPENSIVE THAN GOING TO COURT.
Arbitrations are relatively quick and therefore less costly than comparable court litigation. Moreover, arbitrations are far less formal and designed to get to the point quickly. There is no expensive and time consuming motion practice, and instead involve limited and targeted disclosure – unlike United States court proceedings where disputes may entail extensive discovery procedures, such as review and production of hundreds of thousands of documents, time-consuming depositions, and interrogatories. In short, the procedure is designed for efficiency. As a result, a similar case in court would often take much longer and be far more costly.
THERE IS NO APPEAL.
In court, even if you win, be it as a defendant or plaintiff, the case may drag on – and so will the costs – for many years to come. The other side may appeal, then if it loses the appeal, it may appeal again to a higher court, and the case may then be sent back to the lower court, and so on. On the other hand, an arbitration award is final. And while it can be challenged on very limited narrowly prescribed statutory grounds (for example in cases of fraud), this is extremely rare.
AN ARBITRAL AWARD IS ENFORCEABLE VIRTUALLY ANYWHERE IN THE WORLD.
While you may prevail in court, if your opponent is abroad or the assets you want to take to satisfy your judgment are located outside the jurisdiction of the court, chances are that you will not be able to enforce the judgment. Court judgments are good only in the country where they are given, unless there is a recognition and enforcement treaty in place between the two countries, which are rare. The United States does not have a single such treaty. As a result, United States judgments are generally unenforceable abroad, and the same is generally true for foreign judgments in the United States. However, an arbitration award is enforceable almost anywhere in the world, as arbitration treaties cover almost any country, including the United States. Even if you are a defendant this is an advantage, because once you have arbitrated a case and won, your opponent cannot pursue the same claim again.
ARBITRATION CAN PROTECT YOUR VALUABLE BUSINESS AND CUSTOMER RELATIONSHIPS.
Disagreements arise from time to time even among the best of friends, long-time business partners, or with customers. It is a reality of life. Much as you would like, often you cannot ignore your differences because there is just too much money at stake. It may also be a matter of principle, and what are friends if you cannot frankly discuss and resolve your disagreements? But for most people, a barrier is crossed and a relationship can break once the dispute is taken to court. Filing a lawsuit can be damaging for both parties and unnecessarily destroy mutually beneficial relationships that took years and much effort (and expense) to build. Arbitration is designed to resolve business disputes in a civilized and professional manner. The process is private and far more respectful of the parties than can be accomplished in court. Those involved in the arbitration process are aware of this and work to make it a reality. As a result, many parties who arbitrate their disputes remain on good terms and are often able to repair their relationship. While many lawyers may do some arbitration from time to time, experienced arbitration lawyers keep this aspect firmly in mind, and even suggest additional measures to protect your business relationship if that is what you desire.