Arbitration in law is a form of dispute resolution – an alternative to litigation, which settlement is done by a third party (arbitrator), authorized by the parties to the right.
Historically, the arbitration preceded the state (legal) justice and to this point is a contractual alternative to the parties where the dispute is not always the case to state court (such are, for example, the issues and disputes concerning immovable property).
Arbitration is a manifestation of non-state, voluntary, contractual, private justice and the arbitration proceedings are non-judicial claim process based on contract arbitration. The legal effects of arbitration, however, are procedural and aligned to that of the judgment.
At present, the arbitration is very applicable in foreign trade relations and maritime law.
What are the advantages of the arbitration:
Avoid some shortcomings in the work of the regular state courts, as the both parties entrust the dispute to a non tribunal, they rely.
The Parties participate in the constitution of the Arbitral Tribunal by the choice of arbitrators.
Settlement of the dispute becomes simplified, well-known by both sides. They can modify it and adjust it to the characteristics of the dispute.
The Parties assign dispute to the arbitrators awarded with special knowledge which do not always have the ordinary judges.
The rapidity is one of the advantages of arbitration. The process occurs on one instance.
The arbitration decisions are final, subject to a voluntary compliance and are distinguished by the stability, as can be attacked only in a civil action.
The arbitration proceedings is more economical. The amount charged is not a constant rate, and decreases with increasing wants. The defense costs, expert witnesses, translators and others are made in only one instance.
The arbitration case is non-public and confidential, and therefore the arbitration is able to avoid the deterioration of relations between the parties.
For the arbitration shall not apply the restrictions on the international jurisdiction of the state courts.
The defaulting party of the contract may avoid the need, the inconvenience, the cost, and the inequality to a lawsuit against the delinquent party abroad.
Since the both parties voluntarily obeyed the arbitration, the greater is the likelihood that they will maintain good business relationships.
The enforcements of the arbitration award abroad is secured by the New York Convention in a much higher degree than the enforcement abroad of decisions of the state courts.
Can not be subject to arbitration:
- moral disputes (for terminating the marriage, down the origin, etc..)
- disputes which have as their object rights in REM or possession over immovable property;
- claims that seek a support;
- disputes which have as their object the rights under the labor relations;
- claims for an annulment of the decisions of the bodies of legal persons.