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Arbitration Arbitration is generally accepted as a legitimate way to settle legal disagreements. Also known as disputes. In arbitration, a dispute is settled without being brought before a court, as it is the arbitration tribunal which makes the final decision.

The arbitration tribunal is made up of one or more arbitrators, who are jointly appointed by the parties to the dispute. If you have entered into an agreement on the use of arbitration, the arbitration tribunal’s decision will be binding on the parties in a similar manner to a decision made by a court.

In order to use arbitration, both parties must have agreed that this is the chosen solution to settle disputes.

Arbitration may be agreed on either before or after the legal dispute having arisen. However, when one party to an agreement or contract is an end consumer, arbitration can only be agreed upon once the dispute has arisen.

An agreement to use arbitration, or an arbitration clause, may be included in all civil contracts, both private law contracts and commercial contracts. Arbitration clauses, though, tend to be more prevalent among commercial disputes such as e.g. construction law disputes, larger ICT-contracts etc.

Arbitration is a popular means of solving disputes, particularly in disputes pertaining to international law. It offers internationally collaborating companies the option of settling disputes without becoming involved in the procedural rules of their respective national judicial systems. In those circumstances, the decision of an arbitration tribunal achieves international application.

The advantages of arbitration are:

  • Disputes are settled much quicker than in the judicial system
  • The parties decide where and how the dispute is to be resolved
  • The parties decide the rules according to which the dispute is to be processed
  • The parties appoint the arbitrators
  • The dispute is settled behind closed doors

If you elect arbitration, you should be aware that there is no option to appeal the final decision. The unsuccessful party loses his or her right to have the dispute reconsidered if he or she feels that the wrong decision was made. In addition, the costs of arbitration are often significant as the parties must pay the various fees and charges themselves.