The principal question is whether disputes should be settled in court or by means of arbitration. Many lawyers make their choice on the basis of hearsay or after one or two bad experiences in arbitration.
Decisive factors. The decisive factors for choosing arbitration instead of public court proceedings are:
- Enforceability of a decision. Arbitration is almost inevitable if there is no treaty between the countries in which the final decision must be executed and the country of an agreeable court (g. a convention on the enforcement of foreign judgments). The New York Convention of 1958, facilitating the enforcement of arbitral awards, has been ratified by an impressive number of countries.
- Confidentiality. With arbitration, there is no newspaper coverage of a dispute.
- Greater expertise of arbitrators.
- ‘International’ approach of a dispute. In court procedures, the foreign party will likely feel uncomfortable about a somewhat chauvinist attitude the court may take. An arbitral tribunal may be more receptive to international standards.
- Speed (although arbitration is sometimes slower. It is not generally true that arbitration is slower than court proceedings.
- Adaptability of the arbitral procedure.
Whatever the parties agree, they should certainly not provide both for arbitration and a choice of court. Also, if the choice is made for arbitration, it is highly unusual to provide for a right of appeal (not even in court) and the decision not to choose arbitration should not be driven by the lack of such right of appeal.