Identification of possible issues
By its very nature, an arbitration will invariably arise under an arbitration agreement between the parties.
Save for ad hoc arbitrations, the starting point will most likely be that you are in an arbitration with a counterparty with whom you have had a relationship, whether contractual or otherwise. No matter how much control you had over the relationship during the period of that relationship, for example a contract for a limited period, when it comes to arbitrating any dispute arising under the contract, you are immediately talking about a longer timescale.
Therefore, even if you enter into your contract on the basis that your counterparty is ‘good for the money’ for the period of the contract, have you thought about where things will be in, say, one or two years when a possibly protracted and complicated arbitration process has been concluded?
- Will your counterparty even exist when you come to enforce any award?
- What assets does your counterparty have?
- Where are they located?
- Is that location one in which enforcement of an award is easy, or even possible?
- Where will you locate the seat of your arbitration?
- Does the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (the New York Convention) even apply in the most natural seat or forum?
- What disputes can you reasonably anticipate?
- Which law will be most advantageous to you?
Depending on whether you are likely to enforce under the New York Convention or under a bilateral or multilateral treaty, you also need to consider what the requirements for enforcement will be.To read the full article, please visit Global Arbitration Review.