Reed Smith Client Alerts

International arbitration offers numerous benefits for resolving cross-border disputes, particularly in the current global environment. While parties typically avail themselves of those benefits by putting a pre-dispute arbitration clause into their cross-border commercial contracts, parties can also access the system for existing disputes through an often-overlooked option – the submission agreement. This update explains why parties should explore that option and offers tips for drafting submission agreements.
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International arbitration’s benefits

International arbitration is for many parties the preferred method for resolving cross-border disputes for several reasons, including:

  • Neutrality – international arbitration avoids giving either party a home-court advantage;
  • Enforceability – international arbitration awards, including interim and emergency awards, are globally enforceable in 164 countries under the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), while no such treaty of equivalent reach currently exists for court judgments;
  • Specialized adjudicators – international arbitration permits parties to select their arbitrators, who are generally commercial lawyers or industry experts that have much more industry and subject matter expertise than randomly selected national judges;
  • Confidentiality – international arbitration can help keep the fact of disputes and the evidence presented in them confidential, protecting it from third parties and promoting an environment that facilitates better resolutions and settlement;
  • Remote access – international arbitration traditionally conducts phases remotely and is therefore well-suited to the current environment, in which court delays and the need in many cases for physical appearances and locations can impede efficient dispute resolution; 
  • Reasonable disclosure – international arbitration typically allows appropriate disclosure and limits excessive discovery, which leads to a more efficient and targeted process; and
  • Commercial environment – the aforementioned factors generally foster a commercially-minded dispute resolution environment that preserves long-term business relationships by allowing disputes to be aired and resolved in a way that lets commercial parties continue doing business together afterwards, which is often not the case when disputes are resolved in national courts.