When it comes to resolving disputes, arbitration is becoming a more often utilized tool over litigation. Although arbitrations are simpler and more straightforward, you need to realize that they are not always ideal for every situation. The following is some information about arbitration and how it can make a difference in your dispute:
Timing is Everything
One of the first considerations when contemplating arbitration is when you intend to deal with your dispute. Most businesses will include an arbitration section in a contract that will also include the possibility of disputes in the future. Arbitrating after the dispute has happened is easier to do because all of the evidence and facts are very clear at this point. It is harder to agree to future arbitration if someone involved wants to hold off on dealing with the dispute or would prefer to litigate the matter instead.
The Arbitration Clause
An arbitration clause in a business contract will need to be properly formed so that it can be enforced should a dispute occur. The writer of the contract will need to make several considerations when including an arbitration clause. One consideration is if the debtor holds property or other assets in the country where the creditor could obtain payment should he or she win the arbitration. The clause has to be recognized as valid in all situations for it to be utilized.
There are many advantages with an arbitration. One is the use of a neutral territory. All parties to the arbitration have the right to request a non-biased territory to have an equal and fair advantage. This advantage is best when one or both parties are from different areas and want to have a fair hearing in a forum that is not party to the dispute.
The arbitration clause can also let those involved can choose the selection of arbiters and how they are selected. Also, it also will provide some feeling of certainty that the dispute will be repaired. Litigation is much more expensive and can be drawn out over decades. Arbitrations are much less complicated and, barring any issues with jurisdiction, can be completed much more quickly.
If you are considering litigation, have a serious discussion with your attorney to see if arbitration would be a better option. You and the other party can negotiate the terms of the arbitration and have much more say in how the dispute will be dealt with. For more information, contact a securities law attorney.