Disputes can be resolved in arbitration or arbitration proceedings. Especially in international disputes, arbitration may be more suitable than a court proceeding.
Disputes also occur with international business partners. Resolving the conflict through a state court is not always the best way. This is because the courts do not always have sufficient knowledge of the international legal situation. Furthermore, court judgments are often not enforceable abroad. Arbitration offers advantages here compared to court procedures, explains the commercial law firm MTR Rechtsanwälte, which specializes in litigation.
Thus, arbitration awards can often be enforced more easily outside the European Union. This is because more than 160 countries have committed in the ‘New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards’ of 1958 to recognize and enforce arbitral awards from other countries. Thus, arbitration awards can be enforced practically worldwide.
Moreover, arbitration is often significantly less expensive than court proceedings abroad and can also be conducted more quickly. This is also because there is no option to appeal or revise after the award. The arbitral award is binding for the parties and has the same effect as a judgment. Only in the case of serious formal errors or violations of fundamental legal principles can arbitral awards be annulled by a state court.
The arbitration procedure resembles a state court procedure in its course. However, a major difference is that the parties can select the independent arbitrators themselves. This ensures that the arbitrators have sufficient expertise to be able to make a balanced decision.
Another advantage is that arbitration is not public. Thus, the reputation of the parties involved is not damaged by the dispute, and no details are leaked. The arbitral award itself is also not public. The confidentiality of an arbitration can also make it easier to continue the existing business relationship with the other party after a decision.
If arbitration is not desired by one party, it is possible, according to § 1032 ZPO, to file a request for the inadmissibility of the arbitral proceedings.
With lawyers experienced in litigation, MTR Rechtsanwälte also represents its clients in arbitration proceedings and advises on defense strategies, if necessary.
