Concept of Arbitration
Definition of Arbitration and Its Importance in Dispute Resolution: A Comprehensive Review of the Arbitration Mechanism and Its Role in Effectively Settling Disputes.
Arbitration is a mechanism for resolving disputes that serves as an alternative to traditional courts, where a neutral third party, known as the arbitrator, is responsible for settling the dispute and making a binding decision. The essence of arbitration lies in the parties' agreement to resort to this method instead of the traditional judicial system, with the arbitrator or arbitration panel being determined by a prior agreement between the parties. Arbitration is an effective tool for resolving disputes, especially those that cross national borders or involve complex commercial and legal issues. The arbitrator plays the role of a judge in this process and issues a ruling based on the evidence and information presented.
Under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (commonly known as the 'New York Convention'), arbitration awards have become enforceable in over 170 countries worldwide.
Exploring the Foundations that Distinguish Arbitration as an Effective Dispute Resolution Method: Its Key Characteristics and Dimensions.
Flexibility
Speed and Efficiency
Enhancing trust in business relationships.
International enforceability
Confidentiality
Reducing litigation costs.
Types of Arbitration
Analysis of the Differences Among Its Various Forms and Its Effective Role in Resolving Disputes Across Different Sectors and Fields"
To resolve disputes arising from commercial contracts between companies and individuals, it provides both parties with a flexible and quick means to settle disagreements without resorting to the courts.
It pertains to disputes involving parties from different countries, relying on internationally recognized arbitration rules and procedures. This type of arbitration is an ideal option for resolving cross-border disputes.
It is widely used in major construction projects to resolve disputes that may arise between contracting parties, such as the owner, contractor, and consultant.
To resolve family disputes, such as divorce, alimony, child custody, and division of marital property. This type of arbitration is an effective and confidential alternative.
It deals with disputes between investors and states, where it is used as a means to protect foreign investments. This type of arbitration contributes to building trust between investors and host countries.
To resolve disputes between workers and employers, addressing issues such as working conditions, wages, and hours of work, providing an effective means of settling disagreements away from judicial procedures.
To resolve disputes between banks and their clients, or between financial institutions and investors. It includes disputes related to loans, guarantees, and investments.
It is used to resolve disputes in the technology sector, such as software development contracts, intellectual property disputes in technology, and e-commerce disputes.
We are pleased to present to you the internal regulations of the International Federation For Arbitratin
Introduction to the Federation
The International Arbitration Union aims to manage arbitration activities at both the international and regional levels as a legal means to resolve disputes based on the will and agreement of the parties. It is located in [Iraq], [Erbil].
Model Arbitration Clause of the International Federation For arbitration
"All disputes arising from or related to this contract, including its interpretation, execution, termination, or invalidation, shall be definitively resolved in accordance with the arbitration procedures of the International Federation For arbitration, by an arbitrator or a panel of arbitrators appointed in accordance with those procedures."
Non-Proceeding with Arbitration Procedures
"The IFA may, with the approval of the advisory committee, decide to suspend arbitration proceedings if, upon reviewing the documents, it is determined that the IFA is not competent to hear the case."
Notification of Arbitration
Arbitration proceedings commence upon the receipt by the Secretariat of the IFA of a notice of arbitration from the concerned party or their legal representative.
The "Notice of Arbitration" must include the following information:
- The name of the concerned party, their designation, residence, and nationality. If the application is submitted by a legal representative, a copy of the official power of attorney must be attached.
- A copy of the arbitration agreement or the arbitration clause contained in the contract in dispute.
- A copy of the documents that clarify the right or fact in dispute between the parties.
- The name of the other party in the dispute, their designation, residence, and nationality.
3. Response to the Notice of Arbitration:
The respondent must submit their response to the notice of arbitration to the center within fifteen days of receipt. The center will forward this response to the other parties. The response must include the following information:
- The name and contact details of the respondent.
- A response to the information contained in the notice of arbitration in accordance with Article Five.
- Any objections related to the jurisdiction of the intended arbitration panel.
If the respondent fails to provide the required information, the center may request that they submit this information.
No dispute regarding the respondent's failure to reply to the notice of arbitration, the insufficiency of the reply, or any delays shall affect the formation of the arbitration panel. Such disputes shall be finally determined by the arbitration panel.
The arbitration panel consists of three arbitrators, unless the parties agree otherwise, and the procedures for its formation are as follows:
The applicant for arbitration must appoint one arbitrator from the "IFA's list" or from outside it within fifteen days from the date of registering the arbitration request with the IFA. The other party in the dispute must appoint their arbitrator from the "IFA's list" or from outside it within fifteen days from the date they are notified by the Secretariat of the center regarding the registration of the arbitration request.
The two arbitrators selected by the parties shall agree on the appointment of a third arbitrator who will preside over the arbitration panel. If the other party fails to appoint their arbitrator after the fifteen-day period following their notification by the Secretariat of the center, the first party has the right to approach the center's director for the appointment of the arbitrator, with a decision that is final and non-appealable.
If the two arbitrators chosen by the parties fail to appoint the third arbitrator, either party has the right, after fifteen days from the appointment of the second arbitrator, to approach the IFA's director to appoint the third arbitrator with a decision that is final and non-appealable.
Arbitration sessions shall be held at the IFA's headquarters as specified in Article One of the regulations, unless the arbitration parties explicitly agree otherwise.
The arbitrator must disclose any circumstances that may raise doubts about their neutrality or independence without delay and clarify the necessity of disclosing any relevant fact or relationship. The arbitrator shall provide a written declaration within one week of being notified of their arbitration assignment, indicating their acceptance or rejection, and revealing any relevant relationship with the parties to the case or members of the panel.
- In the case of oral hearings, the arbitration panel shall notify the parties of the date, time, and location of the hearing at least seven days in advance. The arbitration panel may hear and discuss witnesses, including experts, according to the conditions and manner determined by it.
- Oral hearings are held in private, unless the parties agree otherwise. The arbitration panel has the right to request the exclusion of any witness, including expert witnesses, from the hearing room during the testimony of other witnesses, except for a witness representing a party in the arbitration, who shall not be requested to leave the hearing room as a general rule.
- If the parties do not agree on the language of arbitration, procedures, and documents, the arbitration panel, after its formation, shall determine the appropriate language or languages to be used based on the circumstances of each individual case.
- The arbitration panel is obligated to issue a final award that fully resolves the dispute within ninety days. This deadline is considered essential and may only be extended if the parties explicitly agree otherwise.
- If the arbitration period elapses without the arbitration panel issuing a definitive ruling on the subject of the dispute, the panel's right to claim the prescribed fees shall lapse, and it must automatically cease to consider the dispute from the date this deadline expires, unless the parties explicitly agree otherwise.
1. Issuance of the verdict:
A- In the case of multiple arbitrators, any ruling or decision by the arbitration panel shall be issued based on the majority of the arbitrators.
All arbitration rulings are issued in writing, are final and binding on the parties, and the parties must implement them without delay.
The arbitration body must justify its ruling, unless the parties agree otherwise.
The arbitrators shall issue the ruling, which must include the date and place of its issuance. If there is more than one arbitrator and one of them refuses to sign, the ruling must clarify the reason for the refusal to sign.
2. Interpretation of the arbitration ruling:
Any party may request an interpretation of the arbitration award from the arbitration panel within fifteen days from the date of receipt. If the arbitration panel finds that the request for interpretation is justified, it will issue a written interpretation ruling within fifteen days from the end of the comment period set by the center, which is fifteen days. The interpretation ruling issued by the arbitration panel is considered part of the original arbitration ruling.
3. The amicable settlement of the dispute subject to arbitration:
If the parties agree to settle the dispute before the issuance of the arbitration award, the arbitration tribunal must either issue an order to terminate the arbitration proceedings or document the settlement in the form of an arbitration award that includes the agreed-upon terms, based on the request and consent of the parties. The arbitration panel is not required to justify this ruling.
Arbitrators, or any members of the board or its employees are not liable to any person for any act or omission related to any means or procedures for dispute resolution.
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The arbitration panel has the right to appoint one or more independent experts to provide a written report on specific issues it determines. The expert must submit a statement of their qualifications and a declaration of their neutrality and independence to the arbitration body and the parties before accepting their appointment. The parties have the right to submit their objections regarding the qualifications of the expert or their neutrality or independence within the period specified by the arbitration panel, and the panel must decide on these objections. After the appointment of the expert, the party cannot object to their qualifications, neutrality, or independence unless the objection is based on reasons that the party became aware of after the appointment. The parties must provide the experts and the arbitration panel with all information, data, or documents related to the dispute to facilitate the resolution of the case.
B- After receiving the report, any party may request to hear the expert's testimony in a session available to the parties, where they are allowed to attend the session and question the expert.
Any waiver by the parties of their right to object to the appointment of the expert or their report is considered a confirmation of their acceptance of the qualifications, neutrality, and independence of the appointed expert.
The arbitration panel determines the costs of arbitration in the final ruling or in any other decision if it deems it appropriate.
"Costs" include reasonable expenses incurred by the IFA related to arbitration, in addition to administrative expenses.
Why do companies and investors prefer using amicable means to settle disputes?
The disputing parties, especially in commercial and economic transactions, prefer resorting to negotiation, mediation, and arbitration to settle their disputes that may arise or have arisen from those transactions. This preference stems from their desire to avoid the complexities of traditional litigation and move towards more flexible and straightforward methods. The parties recognize that the formal judicial system, despite its importance, can be prone to errors and shortcomings, such as injustice in certain cases or challenges faced by the judicial system, like a shortage of judges and a lack of specialization in specific cases, as well as the backlog of cases leading to delays in resolution. Procedural rules can sometimes be exploited to waste rights or delay decisions, creating a sense of dissatisfaction with justice. In such circumstances, disputants turn to mediation and arbitration as a more effective alternative for resolving disputes outside the traditional judicial system.
A review of the most important international agreements that define the framework of Arbitration and enhance its effective mechanisms in dispute settlement
New York Convention (1958)
Also known as the" agreement on the recognition and enforcement of foreign arbitral awards", it is one of the most influential agreements in the field of Arbitration. It aims to promote the implementation of international arbitration provisions and to provide a legal framework for their recognition by member states.
Washington Convention (1965)
Also known as the "agreement on the settlement of disputes related to international investments between states and nationals of other states", this agreement aims to facilitate the arbitration of disputes between investors and states.
United Nations Commission on international trade law (UNCITRAL) arbitration convention (1985)
This agreement is considered one of the most important legal documents in the field of arbitration, as it provides a set of rules that can be used to settle commercial disputes through arbitration.
Cape Town Convention (2001)
It is considered one of the most important agreements in the field of international commercial arbitration, as it focuses on facilitating the execution of arbitration contracts related to trade finance.
Model law of International Commercial Arbitration (UNCITRAL Model Law)
This law is considered a guide for states in the preparation of their national arbitration laws, and has been adopted by many countries.
