Ten good reasons to rely on arbitration

In recent years, arbitration has become one of the most favored means of settling disputes by companies all over the world. In a context where international financial transaction are evaluated in billions and secret trade has become the key to any successful business negotiation, arbitration has appeared to be the best way to settle a dispute.
Here are some of the reasons why arbitration is such an attractive means to settle a dispute between business partners:
1. Specialized competence of arbitrators
The judicial system never allows the parties to choose their judges. But in a world where the existing fields of business are more and more acute, resolution of disputes that arise in those areas implements a very good understanding of all the facts of the case.
Arbitration has taken that reality into account and therefore, it presents a major advantage in this regard. Parties have the opportunity to designate persons of their choice as
arbitrators. This enables parties to have their disputes settled by people who have specialized competence in the relevant field.

2. Impartiality and independence of the arbitrators
Parties who decide to use arbitration have the right to choose arbitrators or to ask the Institute to appoint one or more on their behalf. Thus, each party is given the chance to pick a person who has absolutely no ties nor interests in the dispute. The chances of getting a fair award are thereby greatly increased by the assurance that all arbitrators are independent and impartial.

Prospective arbitrators must sign a statement of independence and must mention any fact
or reason that might compromise his or her chances of being regarded as independent by
the parties. The parties are being offered the possibility to challenge arbitrators and to have them removed after close examination of the guaranties of impartiality and independence that they present.

3. Neutrality
Arbitration may take place in any country, in any language and with arbitrators of any
nationality. Therefore, parties are placed on an equal footing in five aspects: the place of arbitration, language used, procedures or rules of law applied, nationality of the arbitrators and legal representation. That flexibility is generally the best guaranty that the procedure will offer no undue advantage to any party.

4. Final and binding awards
Arbitration, like most dispute resolution alternatives to the courts, ultimately relies on the goodwill and the cooperation of the parties. Arbitral awards are not subject to appeal and though they may be subject to being challenged for some reasons.

5. Economy
Arbitral awards are usually final and binding. It is a guaranty for the parties that they will not be involved in a long and very costly series of appeals once the arbitral tribunal has reached a decision.

6. Speed
It is an undisputed fact that arbitration is faster than litigation in the regular courts. The limited scope for challenge available against arbitral awards, as compared with time-consuming court judgments, guarantees a relatively rapid resolution of the dispute. It all depends on the circumstances of the dispute.

7. An amicable dispute resolution mechanism
Business disputes present specific difficulties and challenges. Whether they arose in an international or a domestic context, those disputes involve business partners who sometimes have had long-term business relationships. Arbitration helps maintain a "tension free" climate between longtime business partners.

8. Confidentiality
Arbitration hearings are not open to the public. The parties are the only ones to receive copies of the awards. Therefore, trade secrets or any other valuable information that the claimant(s) or the respondent(s) would wish to remain private are safely protected. That is the case even after the award is given if the parties so demand.

9. An award enforceable by court order
Arbitration is based on the parties' goodwill and cooperation. However, the enforcement of some arbitral awards can prove to be difficult. In such circumstances, the first instance courts can be of great help. After examining if the arbitration proceedings' have regularly been applied, the courts have the power to help enforce proper arbitral awards.

10. Involvement of the parties in every step of the proceeding
The parties are involved in every step of the arbitral process. The claimant and the respondent have the power to "guide" the resolution of the dispute in terms of nominating arbitrators, choosing the place or language of arbitration, etc. This aspect of arbitration reflects the very objective of this mechanism. By being involved in the whole arbitral process, parties are given an extra chance to resolve the dispute in amicable way. In some cases, claimant and respondent have managed to resolve their problem outside the arbitral tribunal.

As previously mentioned, arbitration clauses have become the backbone of a well-drafted business contract. On an international level, the existence of an arbitration Institute is generally considered to be an asset for a country. The first concern for any foreign company that wants to conduct business negotiations with domestic companies is to know how disputes are resolved in that country, what is the procedure to be followed, etc. An effective use of arbitration will end most of those concerns and help develop trade transactions and foreign direct investment. For that matter, these are the reasons why the Addis Ababa Chamber of Commerce established its arbitration institute to resolve commercial disputes.