International arbitration is a means of resolving disputes between parties, usually organisations of some kind, in different countries or jurisdictions. It is the referral by disputants to a decision maker who pronounces a legally binding decision. Rather than using the traditional court model parties can determine their own procedure and choose their decision maker.
What law applies?
The parties decide in their contract what law applies to govern their substantive rights and what law applies to govern how the arbitration is to run. Many states have mandatory arbitration acts that set minimum standards for how arbitrations are conducted in their jurisdiction. Scotland benefits from a modern regime set out in the Arbitration (Scotland) Act 2010 and England & Wales from an earlier Act in 1996.
How do parties agree to arbitrate?
Typically, parties will agree to use arbitration by having an agreement to that effect in their contract. Most international arbitrations are agreed in advance by including such a clause at the outset.
It is also possible to agree to proceed to arbitration after the dispute arises through entering an agreement to do so, though this is rare.
How does International Arbitration work and where does it take place?
International arbitration disputes are resolved by appointing a suitable third party to provide a legally binding decision. Parties present their case before a single arbitrator or typically a panel of three arbitrators (a tribunal), rather than in court and because it is not tied to the courts of any jurisdiction, international arbitration is geographically flexible.