It is not uncommon today for businesses of all sizes to have partnerships with other businesses in other countries. Advances in transport and communication have made it possible to travel and communicate over long distances within a very short time. It is now easier to share information across thousands of miles and therefore carry out transactions as well as manage partnerships across borders. However, this means that international commercial conflicts are on the increase.
Settling conflicts between companies in different countries by involving a formal legal system can be challenging. This is because each company’s practices are governed by the legal system in the country in which they are based. The laws may favor one party and put the other at a disadvantage. It can therefore be difficult to reach an agreement if the legal systems of each country are involved.
This is where comes in. Washington is a way of solving conflicts without involving the legal systems of the countries of origin. This method has become the preferred method of resolving conflicts amongst international business partners especially in cases where the legal system in each country differs a great deal.
is usually a condition included in the initial agreement of the companies when they are coming into partnership. The two parties will therefore have agreed on how to select the arbitrator. The arbitrator is a firm or individual that is independent of either of the parties involved in the arbitration.
may be required to settle conflicts involving various issues. Issues may range from the failure to agree on the wording of a contract to the failure of one of the parties to meet their responsibilities as stipulated in their contract. However, the aim of arbitration is one: finding a solution that best suits all the parties involved in the arbitration.
Arbitration has been used for centuries to resolve conflicts and has not changed much. The conflicts usually involve two parties that have disagreed on a matter. The arbitrator is a party that is independent of both parties and is therefore impartial. The arbitrator is also an outsider who has nothing to do with the conflict and will be able to provide a fresh perspective. It is the arbitrator’s responsibility to come up with a solution for the conflict based on what is presented in the hearings. When the arbitrator gives their final ruling, the parties in the case are obliged to abide by the ruling.
The two parties involved in the case are bound by their contract to obey the ruling of the arbitrator. It is therefore important for the parties to ensure that the arbitrator is truly impartial.
When two business partners from different countries of origin are involved in a dispute, an may be required. Find out more here.
