Management concepts and applications

International commercial arbitration has been helping the international trade and commerce by being mediator in the occurrence of disputes. To know and learn of its powers, duties, and jurisdiction is essential to parties concerned in arbitration in the event of resolving disagreements.

This paper aims to provide information on International Commercial Arbitration. The powers, duties, and jurisdiction of the organization are included in this paper. Also, we shall examine in this paper the procedural aspects prevailing in the international arbitration, specific issues, as well as court proceedings. Part of which, being a judicial body, is the discussion of the basic and fundamental approach of laws of most governing arbitral institutions.

INTRODUCTION

In events when business parties from different countries have disputes concerning commercial problems, litigation process often leaves them in expensive and frustrating procedures of finding international courts to resolve their cases. Unfortunate sometimes, the judgment imposed by courts is impossible to enforce. As a solution to this difficulty, arbitration was organized to facilitate the resolution of commercial disputes.

The International Commercial Arbitration flourished with the development and expansion of international trade and commerce. International methods of resolving disputes continuously develop and being nourished by the experience gathered from the various arbitration cases. Its purpose and function is to act as an arbitrator between parties from different nations with commercial disputes.

Arbitration has a number of advantages over court proceedings. First, arbitration allows both parties in dispute to select their arbitrators with technical backgrounds, permitting the handling of proceedings by experts. Secondly, the award rendered is enforceable. Thirdly, everything remains confidential because arbitrations are normally private. Unlike court proceedings and judgments, they are usually public. An arbitrator cannot disclose information to any third parties. Further, international arbitration is oftentimes cheaper and less time-consuming, and provides more satisfactory justice than court proceedings. These are some of the reasons why international arbitration has gained worldwide acceptance and has been the choice in resolving commercial disputes.

Some of the international arbitration institutions are The International Chamber of Commerce (ICC) Court of Arbitration, American Arbitration Association (AAA), The London Court of International Arbitration, The Inter-American Commercial Arbitration Commission, and the International Center for Settlement of Investment Disputes (ICSID). The largest and oldest arbitration body is the International Court of Arbitration of the International Chamber of Commerce.

POWERS OF ARBITRATORS

In the proceedings of arbitration, it is important to remember that the arbitrators and the parties concerned must follow the governing arbitration law in the course of the resolution. The arbitrators have certain powers stated by the law in their duty of mediating in an international commercial dispute. The arbitrators must proceed their function in compliance to ethic code such as impartiality, independence, competence, diligence, and discretion.

Following are the powers of arbitrators. (http://www.kluwerarbitration.com/arbitration/arb/home/ipn/default.asp?ipn=20072)

An arbitrator hears disputes between the concerned parties.

The arbitrator's duty is to be neutral in the proceedings, in his decisions, and in granting award.

In the interests of enforcement, the arbitrator may attach penalties to his injunctions provided that measures are incorporated. Although there has been controversies about the imposition of penalties by the arbitrators due to their lack of imperium, it has been considered that where the arbitration agreement is drafted in terms sufficiently broad so as not to exclude that option (such as "all disputes arising out of the present contract"), there is no reason why international commercial arbitrators should not attach penalties to their injunctions.

Arbitrators faced with a party refusing, for no valid reason, to comply with their order to disclose certain documents can also "draw all necessary inferences" from that refusal and thus effectively penalize that party in their award on the merits.

During arbitral proceedings, the arbitrators assess the weight of the evidence submitted to them by the parties, which may entail resolving challenges as to the authenticity of documents.

CHOICES OPEN TO RESPONDENT

In arbitral proceedings, the parties are given equal treatment and freedom of choice on some aspects of arbitration. From the UNCITRAL Model Law on International Commercial

Arbitration, Articles 18 to 26 of Chapter V provides the parties with freedom of choice in the conduct of arbitral proceedings. Following are excerpts of the choices open to the respondents.