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Nonetheless, due to the clash of trading principles, it is often difficult to come up with an equitable decision which is favoured by the parties. In view of that, business-minded individuals (merchants) have led the call for an international tribunal who will decide on conflicting claims pertaining to international commercial dealings. Thus, the phrase “international commercial arbitration” has been formulated and put into issue. International commercial tribunals have been created—settling disputes by integrating the different principles in trade and commerce—mostly applying the “lex mercatoria” (law of merchants). In this sense, it can be stated that “the lex mercatoria is indeed a live subject: more so today than at almost any time over the last generation” (Fortier, 2001).
“Disputes are inevitable occurrences” in international relations especially in commercial transactions—failure or refusal to pay in accordance with the stipulations provided in a contract is one of the main causes of conflict (Lew, et al., 2003). To settle the differences of the contracting parties, alternative dispute resolution mechanisms are made available. Arbitration is actually one of the non-judicial methods of settling commercial disputes which has been exhaustively applied by some states and entities. In fact, some of the countries in the world have included arbitration as part of their law on civil procedure like Germany and France. Arbitration is a procedure by which conflicting claims of two or more individuals or entities with regard to their shared rights and obligations is heard and resolved by an arbitrator—the agreement reached by the parties has a binding effect (Halsburys Laws of England, as cited in Lew, et al., 2003, p. 3). As such, it has four fundamental features which include the following: an alternative to judicial proceeding, a private way of resolving disputes, parties can select and control the process, and final resolution of
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‘(Collins English Dictionary, 2011)’2. However, in business contexts, litigation is defined as an action or charge brought in a court of law in order to enforce a particular and specific right. Litigation is also defined as a process by which the case is taken to a court.
The researcher discusses in detail the importance of the arbitration process along with the factors prerequisite for the arbitration to continue. The relationship between the agreement to arbitrate and the arbitration process is established in order to reach a conclusion regarding the notion. The nature of the arbitration agreement and various provisions of it are considered in the overall analysis.
Some of these transactions will take place at issues of important cases concerning involvement related to non-signatories as well as parent and sister companies including its subsidiaries being intrinsic to the corporate veil while adhering to follow convention laws that are used to enforce agreements that may pertain to awards stemming from an official ruling or outcome being consistent in International negotiations, investments, and practices.
In the response to the difficulties caused by conflicts in laws and contract disputes, international commercial arbitration devised a way in which such conflicts could be avoided and disputes solved easily out of court. This paper will assess whether the principle of privity of contract undermines the application and functioning of ICA in that it causes unnecessary disputes that have little to do with the actual contract and more to do with the method of arbitration, the conduct of arbitrations and the recognition of awards and orders.
It is immune to political influence or pressure and the parties to the arbitration proceedings are duty bound to abide by the judgment regardless of how powerful or weak a state participant is. Secondly, arbitration is effective in settling disputes that cannot be effectively resolved in the judicial system on account of lengthy judicial processes.
Recent surveys found that organizations across all divisions refer as many business disputes to international arbitration as they do to litigation or court processes (Price water house Coopers and Queen Mary and University of London 2008, p.8). International arbitration in international businesses is always based on the agreement amongst parties that whenever a dispute arises on any matter in the business contract, the parties must submit the dispute to a tribunal appointed to arbitrate on the matter rather than resort to litigation.
With this advent in global enterprise and necessity for contractual arbitration in commercial enterprise and disputes within that realm several aspects affect such negotiations. Those aspects include confidentiality, a central seat for international commercial arbitration and harmonisation within that consideration.
Arbitration is a private justice born out of the parties' will. If the parties choose to settle the dispute out of court by virtue of in inclusion of arbitration clause in the contract, the parties can go for it. Those disputes will be submitted to arbitrators.
About 120 nations have consented to the” New York Convention “which compels contracting nations to implement arbitration awards and accords subject to limited and specified exemptions.
UK is a party to the” New York Convention on the
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