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agree not to submit such disputes to national courts. The ICC also produces and promotes standard trade definitions relating to carriage and the passage of risk, called Incoterms. These can be included in international agreements by contracting parties. It also produces guidance on the use of documentary credits, called the Uniform Customs and Practice for Documentary Credits (UCP 500). International Institute for the Unification of Private Law (UNIDROIT) The UNIDROIT is an independent intergovernmental organisation which studies the need for and how to modernise, harmonise and coordinate private international law, particulary trade law, between states and groups of states. It is based in Rome and has operated since 1926. Membership of UNIDROIT is restricted to 60 states which have signed up to the UNIDROIT Statute. They represent all five continents and a variety of different legal, economic and political systems. Because UNIDROIT is an intergovernmental structure, its rules have traditionally tended to take the form of international conventions which apply automatically in preference to a state¶s national law once they have been implemented. Of particular note are UNIDROIT¶s Hague Convention relating to the uniform law on the international sales of goods, and the Geneva Convention on agency in the international sale of goods. UNIDROIT has over the years prepared over 70 studies and drafts, many of which have resulted in international instruments, and its work has also served as the basis for international instruments adopted under the auspices of other international organisations already in force, including the UNCITRAL Convention on Contracts for the International Sale of Goods. Civil law Civil law exists to settle disputes about the rights and obligations of persons when dealing with each other, and to provide remedies. The state plays no part in such proceedings except to ensure that there is a system of rules and of courts in place for cases to be heard. The is no concept of punishment. In civil cases there is a claimant who sues a defendant, and the case is reported in the names of the two, eg A (claimant) versus B (defendant). There is usually a lighter burden of proof than is found in criminal cases. In the UK for instance cases must be proven on the balance of probabilities. Civil law comprises contract, company, family, tort and property law among others. The court system for civil cases is usually distinct from that for criminal cases. In the UK the civil court system mainly comprises the County Court, the High Court and the Court of Appeal (Civil Division). The parties in all but small cases are usually legally represented, and the system of pre-trial disclosure of documentation means the process is
lengthy and costly. In the UK it mainly comprises the Magistrates¶ Courts. Advantages 1. 2. even if the wrong was harm to a person such as assault. Arbitration Arbitration is an alternative dispute resolution procedure for settling civil cases. It is an alternative to the full process of civil law but it is still focused on resolving disputes between persons. notably the US. The case is reported as The State versus A. All but the pettiest crimes are heard by a judge and a jury. the judge decides on the law and the jury on the facts. there may be a jury as well. The court system used is generally separate from civil cases. and the arbitrator is not normally a judge. fines etc. during court time etc. the Crown Court and the Court of Appeal (Criminal Division). In criminal law the state prosecutes a person who has done wrong against the state by breaking its law. The case is heard by a judge in the UK. whereby the dispute is taken not to a court and a judge to decide. the arbitration process is generally cheaper.Speed Arbitral decisions are usually made and acted on much quicker than is the case with court proceedings. Costs of venue and the arbitrator fall on the parties but as the venue is a place that is convenient for the parties. For instance an accident at work may result in an employee claiming against the employer for damages by way of compensation for the injuries caused and it may also give rise to a criminal prosecution against the directors for breaches of health and safety legislation. that person plays no actual part in the proceedings. The same act may give rise to both a civil and a criminal case. A person can only be convicted of a crime if the case is proved beyond reasonable doubt. in some systems. so the flexibility of the arbitration procedure speeds up the process. . but to an independent and mutually agreed third party. This is helped by the fact that the venue does not need to be in a court room. The parties to the case are the state (the prosecution) and the accused wrongdoer (the defendant). The state punishes a convicted criminal by imprisonment. Criminal law A crime is defined as conduct prohibited by the laws of the state.C os t Because there is not the same process surrounding pre-trial disclosure of documentation and representation by solicitors and barristers in court. there is therefore a higher burden of proof in criminal cases. the benefit should outweigh the added costs. There is no element of criminal law in arbitration.
This is often essential to the parties.En forceab ility Depending on the arbitration agreement. This in itself can often lead to better solutions. an arbitral decision should be binding on both parties and enforceable in the courts. Disadvantages 1. Also. 3. promise. This is a major advantage over the court system where the judge is an enlightened amateur or well-informed layperson. correction of mistake etc) than would be available at law. the right to appeal to the courts may be limited. The right to appeal may be important. the arbitrator or adjudicator. explanation. 6. which in itself can mean bad publicity. The proceedings are more like a business meeting than a legal battle. One party may actively want the publicity that court proceedings entail. Usually the decision is a form of compromise and not based on the adversarial µwinner-loser¶ split. where decisions are ad hoc and may be inconsistent.Privacy Arbitration proceedings are kept as private as the parties wish. Arbitration agreement . 2. 7. although there may be a limited right of appeal to the courts. Under an arbitral process.I n formality Arbitration proceedings are usually very informal without the fuss of court rooms etc. change in behavior.Exp ertis e The person conducting the arbitration. 4. should be an expert in the matter under dispute. In common law systems based on precedent there is greater predictability of the outcome in court proceedings as opposed to arbitration. Judges are experts in interpreting and applying the law so may be preferred if the root of the dispute is of a legal rather than a commercial nature.I nnovation The decisions of arbitration are often more innovative and cover a wider range of solutions (apology. 5. as what may be at issue are commercially sensitive details. 4. taking a dispute to court should result in a precedent being set that parties can rely on in future dealings.3. Court proceedings are public and the fact that there have been proceedings is a matter of public record.
or it can be by a separate contract. No one can be stopped from being an arbitrator solely on the grounds of his nationality. he may . such as the UK¶s Arbitration Act 1996. Model Law on International Commercial Arbitration The Model Law sets out that arbitration agreements must be in writing.Arbitration is commercial if it covers matters relating to trade.as a reference in another written contract between the parties µIn writing¶ includes a number of methods. they must disclose any relevant facts or circumstances that might impair their independence or impartiality. When someone is asked to be an arbitrator. for example telex. If the parties have not agreed about how the tribunal shall be composed. An arbitration clause which refers to a commitment to submit future disputes to arbitration must be generally written into the contract at the outset. the Model Law states that there shall be three arbitrators. However.The arbitration agreement may be governed by one party¶s national law. If there is no specification in the agreement. . If it becomes impossible for an appointed arbitrator to act. the composition of the arbitral tribunal depends on what the parties have agreed between themselves in their arbitration agreement.Arbitration is international if the parties have their places of business in different countries. Challenging an arbitrator If a party does not feel that an arbitrator meets the requirements of independence or impartiality. for example.in an exchange of documents relating to legal proceedings referring to it . no special qualifications are required. The two arbitrators should then choose the third arbitrator within a further 30 day period. . one chosen by each of the parties and the other chosen by the two arbitrators chosen by the parties. An arbitration clause is said to be in writing. he can withdraw or the parties can agree that the appointment is terminated. if it was contained: . Composition of the arbitral tribunal Under the UNCITRAL Model Law on arbitration. telegram or other means of telecommunication which provide a record of the agreement. Person of the arbitrator Thequ alification s the parties require of the arbitrators will be set out in the arbitration agreement.in an exchange of documents giving a record of the agreement . or does not possess the qualifications required in the agreement. or it may be international arbitration under the UNCITRAL Model Law on International Commercial Arbitration. if they are required to be an expert in a particular product or area of law. arbitrators are required to be independent and impartial of the parties and their dispute.in a document signed by the parties . The parties should elect their arbitrator within 30 days of being asked to do so.
The challenger must send a written statement of challenge to the tribunal within 15 days of becoming aware of grounds for a challenge or of becoming aware of the tribunal¶s composition. the tribunal shall decide. The tribunal or one of the parties with the tribunal¶s consent. but they shall be conducted orally if requested by one of the parties. state the reasons behind the award and the place of the award. and be sent to both parties. Once the court has decided on a challenge there is no further right of appeal. The parties will be given full access to all documents presented by the other party. the tribunal will proceed as it sees fit. if they choose. . setting out the facts supporting his claim. If there is no withdrawal the tribunal must decide on the challenge. the tribunal will continue on the basis of the evidence available to it. may request assistance in taking evidence from the courts. Enforceability of awards The award by the tribunal shall be made in writing. The tribunal proceedings end either by order of the tribunal or when an award is made. subject to the requirements of the Model Law. may continue its proceedings and make an award. 3. including the challenged arbitrator. In the absence of a challenge procedure. the Model Law procedure applies as follows: 1.challenge the appointment of that arbitrator in accordance with the challenge procedure laid down in the arbitration agreement. If the parties do not agree on a procedure. At this point. when and in what language. While any challenge is being decided the original tribunal. The claimant (the person initiating tribunal proceedings) will make a statement of claim. 5. If either party fails to present their statement or fails to provide evidence required. the points at issue and any remedy claimed.The tribunal may make use of expert witnesses. The tribunal will decide whether proceedings will be conducted orally or in writing. No party may make a challenge on the basis of information that they possessed at the time the arbitrator was appointed. the arbitrator may withdraw voluntarily. The parties will also decide upon practical issues such as where proceedings are to take place. be dated and signed by a majority of the arbitrators. The nature of proceedings There are three general principles in the Model Law with regard to the nature of arbitral proceedings: 1. 4. and both parties given a full opportunity to present their case. If the challenge is not successful the challenger has 30 days to apply to the courts to decide it. If they do not agree. The defendant will set out a statement of defence. The parties are free to agree on a procedure. 3. Parties will be treated with equality. answering these points. 2. 2. or the other party may agree to the challenge so the arbitrator has to withdraw.
A party was not given proper notice of an arbitrator¶s appointment or of the proceedings or that party was otherwise unable to present its case.Regardless of where the award was made. . The party may apply to the courts to enforce the award. The award deals with a matter not contemplated by the parties or not falling within the terms of the original arbitration agreement. 4. 6. A party to the arbitration agreement was under some incapacity or the agreement was not valid under the relevant laws. The subject matter of the dispute is not capable of being dealt with by arbitration under the law of the state. by making a written application and supplying a certified copy of the award to the court. Parties may apply to the relevant court or authority to have the arbitral award set aside in the following circumstances: 1. The composition of the tribunal was incorrect. 5. When the award is not enforceable The parties may have recourse against the arbitral award. The award conflicts with public policy in that state. it shall be binding on both parties. 3. 2.
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