Arbitration Or Litigation? A Highlight On Technology Transfer Contracts

Technology Transfer Contracts became one of the most vital controlling economic tools used by developed countries - owners of technology- over developing countries in a New Economic Global Order, which relies on the technological gap between developed and developing countries to control the economy worldwide, while developing countries consider these contracts the only tool for satisfying their needs of development at all levels.

Technology is defined from an economic perspective as the group of new knowledge, skills and expertise, which can be inverted to production processes or can be used for the production of goods and the rendering of services, whereas Technology is not the science itself though it is the applicable science.

Dispute resolution method is one of the controversial issues when a technology transfer contract is concluded between a developed and developing countries; the dilemma with developing countries is always whether to insist on choosing their national litigation system to resolve such disputes, or to follow the usual trend of developed countries by going to arbitration.

Arbitration or Litigation?

Technology Transfer Contracts have a certain peculiarity which must be taken into account while choosing the dispute resolution method, particularly the non-stop development of the technology-subject matter of these contracts, which inclines to favor arbitration method rather than national litigation; due to the several attributes of arbitration that suit the special nature of these contracts.

Selection of arbitrators, confidentiality, the speed and flexibility of procedures, the maintenance of good relations between parties, the irrevocability of the arbitration award, are crucial attributes of Arbitration. On top of that, the choice of the applicable law in this context is one of the most important attributes of arbitration which must be taken into account by developing countries.

Choosing the national litigation system by a developing country to handle a dispute arising from a technology transfer contract means the application of the national laws to the dispute in question.

The question is: Are these Laws Updated to the extent to handle technological matters in an international context?

Arbitration provides its parties with the option to choose the applicable law to their respective dispute. On the contrary of the laws of developing countries, local laws of developed countries reflect in their essence the Lex Mercatoria.

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