In the field of international trade, especially at the private level, it is very common for different problems or controversy to occur; either due to failures in the negotiations or simply because one of the parties has not complied with part of the agreement, for example.
Given this, we find international commercial arbitration, which stands out as the best formula for resolving international conflicts.
Therefore, through this article, we will try to explain what it consists of and comment on some real cases.
What is international commercial arbitration?
International commercial arbitration is the most widespread form of private dispute resolution at a private commercial level, since it is a useful method due to its flexibility, scope and speed when it comes to disputes of this type.
It is, furthermore, unrelated to the judicial process and whenever it is carried out, both parties must agree.
In this way, it can be said that international commercial arbitration is voluntary on the part of the companies involved in the controversy.
The companies involved will also choose the arbitrators and the language of the process.
International entities that regulate it
For the international arbitration process to have credibility, it is logically subject to a series of rules and institutions.
Among the international entities that we can highlight for regulating or hosting the matter of international arbitration, we find:
- United Nations Commission on International Trade Law.
- Inter-American Commission of Commercial Arbitration.
- Chamber of international trade.
- International Center for Settlement of Investment Disputes and London Court of International Arbitration.
All of them are institutions of international prestige and have great credibility for the resolution of international controversies at the international level.
Operation of international commercial arbitration
The operation of international commercial arbitration It is simpler than traditional courts.
The rules are more flexible and understandable by the parties, reducing certain complexity that courts sometimes have (EAE, 2023).
Once the negotiation phase is over between the parties involved in the controversy, is when the need arises resort to international arbitration.
It is not until the parties come to understand each other that the real need to resort to international arbitration arises.
Phases of international commercial arbitration
Commercial arbitration could be divided into the following phases or stages in the case of: International Chamber of Commerce:
- Go to the international institution chosen by both parties involved that governs international arbitration.
- Then it appoint the referees with the presence of the following entities that will give legal rigor to the arbitration process: Arbitration Court and General Secretariat of the Arbitration Court.
- Presentation to the court arbitration of the facts and statement of the parties involved in the controversy.
- Delivery of Mission Record to the court, El Mission Record, is a document that both parties must sign and send to the Arbitration Court within a period of two months.
- Once received the Mission Record, The Arbitration Court presents the decision taken.
- Issuance of the arbitration award or final decision that cannot be appealedThe final decision is not subject to appeal and is irrevocable, and must be respected by both parties involved in the dispute (International Commerce Chamber, 2023).
Advantages of international commercial arbitration
- The dispute resolution process is simple and easy and faster than through the judicial court system.
- An flexible process, both for those involved in the controversy (by being able to choose whether one arbitrator or more acts), added to the fact that arbitrators have more freedom to apply the rules than usual judges.
- Neutrality, as the great premise of the activity of arbitration, without being subject to the laws of the countries from which those involved in the controversy come.
- Technical quality of refereeing: Arbitrators are usually specialized in very specific areas, so they are great experts in the field, being able to facilitate the resolution of disputes in a more fair way.
- Predetermined cost of the process is known from the beginning, which is an important advantage for the parties involved.
Real case of international commercial arbitration
Real case number 1
Let's go to the real case of Swiss insurance company Zurich against the Bolivian government after the complete nationalization of the Bolivian pension system.
Following a lack of understanding between the parties, They appealed to the Criminal Court of Arbitration (CPA) under the rules of the United Nations Commission on International Trade Law (CIAR Global, 2022).
Real case number 2
Another case that made a strong impact in 2021 It was the controversy between Riverside Coffee (an American company) against the Government of Nicaragua, because the country's paramilitary forces carried out an attack on the American company's avocado plantation.
Finally, Riverside Coffee filed an investment arbitration against the Nicaraguan Government in the International Center for Settlement of Investment Disputes.
Real case number 3
Finally, an arbitration case between two companies that operate internationally.
We head to sector Plans patents and the intellectual property.
Within the framework of the arbitration of the World Intellectual Property Organization (WIPO), two French companies: one pharmaceutical company licensed its know-how and patents to another.
La controversy arose because the licensee (the company to which the patent was assigned) and the decision was ultimately made to resort to WIPO arbitration, since the initial patent assignment contract included a clause stating that any dispute must be resolved by the arbitration of this institution (WIPO, 2023).
Example of an international arbitration case involving Spain
This is the first time that ICSID has adopted this position, supporting the interpretation of Spain and the European Commission on the Energy Charter Treaty (ECT), which recognises the supremacy of EU law in transferred powers.
The investors were seeking compensation of more than 72 million euros, plus 8 million euros in costs.
Spain, represented by the State Attorney's Office, adds these awards to a trend consolidated after similar cases, such as that of GreenPower v. Spain.
So far, Spain has managed to annul three other awards in favour of European investors before Swedish courts.
Frequently Asked Questions (FAQs)
most widespread form of private dispute resolution at a private commercial level, since it is a useful method due to its flexibility, scope and speed when it comes to disputes of this type.
Simple, straightforward and flexible dispute resolution process. It has maximum neutrality and technical quality and the determined cost of the process is known from the beginning.
In the case of companies, it is a very helpful resource when solving problems at a commercial level.
Conclusions
Having seen this and to conclude, we can say that arbitration is a great resource to solve commercial problems between companies.
It is a real alternative to the courts of law to use.
Usually more flexible, faster and more comfortable for the parties.
Perhaps its big problem lies in the reliability it can show in order for companies to accept this alternative.
Even so, it continues to be and will continue to be a great resource for resolving commercial conflicts at an international level.
RRYP Global, lawyers experts in international right.
