The significant development of commercial activities has made a variety of business opportunities for enterprises, on the other hand, that made potential risks and arisen disputes. There are many modes of dispute settlement, with the same destination being an effective judgment or decision of the dispute settlement agency, but Commercial arbitration is a superior dispute resolution mode to the Court. In this post, TNTP will give the reasons “Why should enterprise choose to settle disputes by Commercial arbitration?”.
1. Mechanisms and procedures of settle disputes by Commercial arbitration are flexible
According to Clause 1, Article 3 of the Law on Commercial Arbitration 2010, Commercial arbitration is a mode of dispute settlement agreed upon by the parties and conducted by the Law on Commercial Arbitration, so when the parties agree to settle disputes by Commercial arbitration, arbitration mechanism will be applied to resolve disputes. This is a select mechanism, not the same as the Court, which will default to a dispute settlement mechanism if the parties do not have another select agreement. It can be seen that the arbitration mechanism gives the parties more selections and initiative in dispute settlement.
According to the provisions of arbitration law, the parties can take the initiative in time and venue for dispute settlement to accelerate the time of dispute settlement; the parties have the right to select the Arbitral council; the language used in dispute settlement and the law applicable to the dispute if a party to the dispute has a foreign element; arbitration procedures do not undergo as many levels of trial as by the courts, that therefore saving time and money for enterprises.
2. When settle disputes by Commercial arbitration, Enterprises have the right to a designated dispute settlement person
Having the right to select a dispute settlement arbitrator allows the parties to select experts with expertise and practical experience on the dispute (insurance disputes, shares, stock disputes; disputes in construction, etc…), and have a prestigious profession to become the arbitrators who settle disputes of the parties.
Thereby, contributing to ensuring the quality of dispute settlement promptly and accurately on the principle of voluntary and free agreement of the parties in the dispute.
3. Commercial arbitration shall be adjudicated on the principle of private
The Commercial arbitration mode respects the confidentiality of the entire process, the arbitration meeting is also held in a non-public manner and only with the participation of the parties receiving the decision, which is different from the publicity judgment principle of the Court proceedings. When the dispute and the identities of the parties are kept private, this will satisfy the need for trust in commercial relations, which has great significance in competitive conditions (especially for companies listed on stock exchanges).
In particular, there are lawsuits related to trade secrets and inventions or other factors that need to be kept confidential at the request of the parties.
4. Arbitral awards are final
The arbitral award is different from the judgment or decision of the court which is final and cannot be appealed or protested against.
In the case an international commercial contract arises, the judgment of the National Court is commonly difficult to achieve international recognition. Due to the Court’s essence within a country’s jurisdiction, it is common for the Court’s decision to be recognized in another country which has to be adopted by bilateral agreement and under very strict rules. In contrast, arbitral awards gain international recognition through a wide range of international conventions and in particular the New York Convention 1958 on the Recognition and Enforcement of Arbitral Awards (with 150 countries and territories that are parties to the Convention).
Here is the content of the post “Why should enterprise choose to settle disputes by Commercial arbitration?”. TNTP hopes this article is useful to readers.