Alternative Dispute Resolution – Arbitration

General understanding of the Arbitration: Civil court lawsuits and trials are the traditional method for resolving disputes. However, concerns about court congestion and delays, rising litigation costs, and the negative psychological and emotional impact of litigation have increased the use of alternative dispute resolution (ADR) techniques such as mediation, arbitration etc. Arbitration is one of the more frequently used ADR processes. However, any person or legal entity which is to choose arbitration for dispute resolution, the understanding of arbitration is important to know and aware the procedure to follow.

Arbitration is the formal alternative to litigation resettlement. In this process, the disputing parties present their case to a neutral third party or arbitrator, who renders a decision. Arbitration is generally considered a more efficient process than court because it is quicker, less expensive, and provides greater flexibility of process and procedure. The parties often select the arbitrator and exercise control over certain aspects of the arbitration procedure. Arbitrators typically have more expertise in the specific subject matter of the dispute than do judges. They may also have greater flexibility in decision-making.

Typically, a party initiates the arbitration process by sending the other party a written demand for arbitration. The demand generally describes the parties, the dispute, and the type of relief sought. The opposing party usually responds in writing, indicating whether they believe the dispute is arbitrable. If the dispute is arbitrable, the parties then select an arbitrator or panel of arbitrators.

In most jurisdictions, the format for arbitration is similar to a trial. The parties make opening and closing arguments, present testimony and witnesses, and offer documents. The evidentiary rules, however, are not applicable and the discovery and cross-examination opportunities are limited.

The well-known regional arbitrations are Hong Kong International Arbitration Center (HKIAC), the Singapore International Arbitration Centre (SIAC), London Court of International Arbitration (LCIA) and the International Chamber of Commerce (ICC) etc.

The brief introduction and model clauses to use of highly ranked arbitrations including ICC, SIAC and HKIAC follows. The introduction of Mongolian International and National Arbitration and current legislation of arbitration is briefly summarized.

Dispute resolution by the International Chamber of Commerce (ICC)

ICC International Court of Arbitration is the world's leading arbitral institution. Since 1923, ICC has been helping to resolve difficulties in international commercial and business disputes to support trade and investment.

ICC performs an essential role by providing individuals, businesses and governments alike with a variety of customizable services for every stage of their dispute.

Although ICC is called a court in name, they do not make formal judgments on disputed matters. Instead, they exercise judicial supervision of arbitration proceedings. Their responsibilities include:

confirming, appointing and replacing arbitrators, as well as deciding on any challenges made against them; monitoring the arbitral process to make certain that it is performed properly and with the required speed and efficiency necessary; scrutinizing and approving all arbitral awards to reinforce quality and enforceability; setting, managing and if necessary adjusting fees and...