It has been written by Sanskriti Koul, a third-year law student of Asian Law College, Noida

Introduction:

In today's world, individuals and businesses are connected for cross-border collaborations and transactions, which makes the problem of cross-border disputes very common. Resolving global disputes via traditional court can be costly and time-consuming. But with the help of Arbitration, disputes can be fixed in less time. International arbitration is a method to resolve conflicts where the parties give their consent to resolve their conflicts before private arbitrators. International arbitration has become an important and effective method for resolving cross-border disputes in the context of globalization and the rapid development of international trade.[1] International arbitration provides an impartial and methodical forum for parties to resolve disputes, by avoiding the complexities of litigation in courts.

Features of International Arbitration:

· Enforceability- Arbitration awards are much easier to enforce than Court judgments. Over 170 countries have ratified the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (also known as the New York Convention), a multilateral treaty for the recognition and enforcement of international arbitration agreements and awards.[2]

· Confidentiality- Ruling, submissions, and orders that are issued by the International Arbitral Tribunal are not available to the public and are communicated only to the parties.

· Neutrality- A neutral forum is provided by international arbitration to resolve cross-border disputes. A neutral forum is very important in cases related to International commerce and trade because parties might not know the laws of another country. (A neutral forum in international arbitration is an efficient and private platform for parties to resolve conflicts, aloof from their home state governments or parties.)

· Finality- An arbitration award has no right of appeal and it is binding and final. Arbitral awards cannot be set vacated except in some limited circumstances, like in the case of violation of any public policy an arbitral award can be set aside.

· Autonomy- International arbitration is less formal as compared to judicial proceedings and it allows the parties a form of autonomy and flexibility to agree upon things like how the arbitration will be conducted.

Process of Arbitration:

1. Arbitration agreement- Arbitration agreement determines the key element of the process. According to the arbitration agreement, parties must agree to resolve their disputes through arbitration.

2. Arbitrator selection- Parties have the power to choose a panel of arbitrators or a sole arbitrator. The selection process could vary based on the chosen rules.

3. Preliminary hearing- A preliminary hearing is held to set timelines, discuss procedural matters, and form the rules and regulations that will govern the arbitration.

4. Evidence and discovery- As compared to litigation, arbitration discovery is limited. Parties can present their evidence and witness testimony in support of their claim.

5. Hearing- In hearing both parties present their cases. This includes documentary evidence, oral arguments, and witness testimonies.

6. Award- After considering every argument and evidence, arbitrators issue an award that resolves the dispute. The award is usually binding and final.

Case studies:

· South China Sea Arbitration – On 22 January 2013, the Republic of the Philippines instituted arbitral proceedings against the People’s Republic of China under Annex VII to the United Nations Convention on the Law of the Sea (the “Convention”). The arbitration concerned the role of historic rights and the source of maritime entitlements in the South China Sea, the status of certain maritime features in the South China Sea, and the lawfulness of certain actions by China in the South China Sea that the Philippines alleged to violate the Convention. China adopted a position of non-acceptance and non-participation in the proceedings.[3]

· Red Sea Islands Arbitration –The State of Eritrea and the Republic of Yemen both claimed sovereignty over a group of islands in the Red Sea and disagreed as to the location of their maritime boundary.[4] An ad hoc tribunal was established that ruled the issues in two stages i.e. sovereignty and Maritime boundary. In the year 1998, the PCA (Permanent Court of Arbitration) ruled that most of the Islands belong to Yemen and some smaller islands that are closer to Eritrea belong to Eritrea.

· Indus Waters treaty arbitration- On 19 August 2016, the Islamic Republic of Pakistan instituted arbitral proceedings against the Republic of India under Paragraph 2(b) of Annexure G to the Indus Waters Treaty 1960. A Court of Arbitration was constituted under Annexure G.[5]

Conclusion:

Arbitration is evolving as one of the most popular and preferred modes of dispute resolution. International arbitration helps to resolve cross-border conflicts; and provides an efficient, neutral, and flexible forum for parties. Whether a person is a businessman involved in international trade or a person who is facing cross-border legal conflicts, International arbitration can save an individual’s money and time. As the global economy evolves, the scope of international arbitration will only continue to increase.

REFERENCES:

[1] Lexology, The role of international arbitration in resolving cross-border disputes, (2024) https://www.lexology.com/library/detail.aspx?g=7dbcda6b-1db7-49d3-82df-8a72218257ba#:~:text=International%20arbitration%20allows%20parties%20to,different%20countries%20and%20legal%20cultures accessed 30 July 2024

[2]Cooley, What Is International Arbitration? (2023) https://www.cooley.com/news/insight/2022/2022-12-31-what-is-international-arbitration, accessed 30 July 2024

[3]The Republic of Philippines V. The People’s of Republic of China (2013) PCA Case No.2013-19

[4]Sovereignty and Maritime Delimitation in the Red Sea (1996) PCA Case No.1996-04

[5]Indus Water Treaty Arbitration (2016) PCA Case No.2023-01