Originally from Arbitration Clauses for International Contracts - Second Edition

Preview Page

CHOOSING BETWEEN ARBITRATION AND LITIGATION

The U.S. Supreme Court has stated that, when parties choose arbitration over litigation, they “trade . . . the procedures and opportunity for review of the courtroom for the simplicity, informality, and expedition of arbitration.” While it is true that appellate review and the formalities of the courtroom are absent in international commercial arbitration, experienced practitioners know that international arbitration is rarely simpler and quicker than litigation. The reasons that parties regularly choose arbitration over litigation for international contracts lie elsewhere.

The purpose of this Chapter is to summarize the salient ways in which international arbitration differs, or is said to differ, from litigation and thereby provide guidance to counsel and parties who seek at the contract drafting stage to make an informed choice between international arbitration and litigation. A comprehensive comparison of international arbitration and litigation would require inter alia a description of litigation and arbitration options on a nation-by-nation basis, and would require a multi-volume treatise. This Chapter offers the observations of one practitioner on the subject.