People are always looking for faster and more effective ways to resolve disputes
Alternative dispute resolution is becoming more important now than ever before. One method of ADR is arbitration.
Arbitration has been used as a dispute resolution tool for thousands of years. As soon as there was social life, there was arbitration. People generally sought out someone known for their honesty to settle their disputes.
Arbitration is a quick and inexpensive substitute to resolving e-commerce disputes through courts. Businesses are using more arbitration clauses when entering into contracts. Disputes about payment and contracts can be universally resolved using arbitration clauses.
E-commerce leads to many cross-border disputes that are difficult to handle through traditional courts due to jurisdictional challenges.
Arbitration deals with most aspects of e-commerce disputes.
While arbitration provides speed, confidentiality and more flexibility to the parties, challenges remain beyond the arbitration process, such as enforcement of awards internationally.
The 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards provides for the recognition and enforcement of foreign arbitral awards in over 170 countries. The convention was adopted by the UN and binds courts to recognize these awards as if they were domestic judgments with limited reasons for refusal (e.g., the agreement was invalid, denied due process, exceeded the authority conferred on the tribunal, etc.).
Such legal recognitions promote international arbitration by lowering both the time and expense involved in the process, supporting companies with making calculated risk decisions to engage in global trade and investment with international stakeholders.
Despite its almost universal adoption, some countries still utilize reservations like reciprocity or seek to limit it generally to commercial arbitral awards.
In addition to strong arbitration clauses in agreements, it is important for businesses to have clearly defined terms and conditions, responsive customer service, and processes to resolve disputes internally.
Litigation should be a last resort.
