Alternative Dispute Resolution In International Business Transactions

Tuesday, November 17, 2009 - 01:00

Introduction

Alternative dispute resolution ("ADR") is a procedure for settling a dispute by means other than litigation, such as arbitration, mediation, or minitrial.1Although arbitration and mediation are both considered forms of alternative dispute resolution, arbitration and mediation are fundamentally different. Arbitration is a determination of legal rights whereas mediation is a form of facilitated negotiation which looks beyond rights and allows the parties to focus on their underlying interests. Arbitration leads to a binding determination whereas mediation results in a binding determination only if the parties agree to settle their dispute on mutually satisfactory terms. In the last 30 years, ADR has become a standard part of commercial dispute resolution. In order to properly serve companies in international commerce, in-house counsel and staff should become familiar with arbitration and mediation in the international setting.

Section I of this paper discusses the differences between international arbitration and international litigation. Section II briefly addresses a comparison of international dispute resolution and domestic arbitration. Section III highlights the involvement of the United States in international arbitration. Section IV discusses the importance of explicitly indicating the preferred method of dispute resolution in your commercial contracts, even if the parties would rather litigate than engage in ADR. Section V reflects upon drafting considerations for the arbitration clause. Section VI provides, as examples, specific information related to three international arbitral institutions.

i. International Arbitration Versus Litigation

The resolution of disputes in existing court systems has its advantages. Judges are mostly independent, filing fees are much less than arbitration fees and there exists a right to appeal. However, notwithstanding these and other positive attributes, the effort to obtain a court judgment takes time and requires legal expertise in the jurisdiction where litigation is filed. In addition, it is often more difficult for businesses to maintain their working relationships in the midst of a public legal battle. By contrast, the confidential nature of arbitration may take at least some of the sting out of a public business conflict. The ability to select the arbitrator, language of proceedings, and place of hearings are other important reasons that favor commercial arbitration. In addition, complicated rules of procedure and evidence can be modified or excluded in arbitration but not in court proceedings. The extent of the award or type of damages may be contemplated beforehand, which allows parties to draft a proper arbitration clause and plan ahead with appropriate reserves. Perhaps the greatest strength of international arbitration is the ability to fashion procedural and substantive flexibility. Carefully drafted arbitration clauses will likely result in significant control over the way your dispute is decided and how much it will cost to achieve resolution. Finally, it is typically easier to enforce an arbitration award than a civil judgment obtained in another country. For these and other reasons, estimates are that 90 percent of international contracts include an arbitration clause.2Investors and corporations have increasingly turned to international commercial arbitration as the preferred method of dispute resolution of international business disputes.3

Speed of resolution makes arbitration more attractive than use of the courts of most, if not all, nations. Data collected by the U.S. federal court system shows the median time to get to trial is over 23 months.4In the U.S., the time it takes from filing an arbitration claim to reaching a decision is, on average, 16.7 months.5According to the London-based Centre for Effective Dispute Resolution ("CEDR"), of the 3,000 commercial disputes that are subjected to mediation in London each year, around 70-80 percent reach a settlement within one or two days, with a further 10-15 percent settling a few weeks later.6The Korean Commercial Arbitration Board maintains that matters brought for international arbitration are on average processed in five months whereas similar matters brought in the Korean court system can take two to three years.7Clearly, commercial arbitration offers distinct time-saving benefits.

The difference between enforceability of a court judgment and that of an arbitral award also favors use of arbitration. There is no effective international treaty that facilitates the enforcement of foreign judgments whereas the same is not true with respect to arbitral awards. This year marks the 50th anniversary of the signing in June 1958 of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the "New York Convention"). The New York Convention has been described as "the single most important pillar on which the edifice of international arbitration rests."8Since there are currently 142 countries out of the 192 United Nations Member States that have adopted the New York Convention, the majority of international arbitration agreements are within its application.9Under the New York Convention, if an arbitration award is issued in any country that is a party to the Convention, every other party to the Convention is legally obligated to enforce the award. Increasing numbers of bilateral investment treaties negotiated between foreign states often include arbitration as a means to resolve disputes between foreign states and private overseas investors.10This ease of enforcement is yet another reason why international arbitration continues to grow.

Article V of the New York Convention enumerates the procedural grounds that serve as the only means to prevent enforcement of an arbitral award:

1. The parties to the agreement were, under the law applicable to them, under some incapacity, or the agreement is not valid under the law to which the parties have subjected it or the law of the country where the award was made; or

2. The party against whom the award is invoked was not given proper notice of the appointment of the arbitrators or the proceedings or was otherwise unable to present his case; or

3. The award deals with matters not within the scope of the arbitration agreement, provided that if those matters can be separated, then partial enforcement of the award that is within the scope of the parties' agreement may occur; or

4. The composition of the tribunal or its procedure was not in accordance with the agreement of the parties or, absent such agreement, not in accordance with the law of the country where the arbitration took place; or

5. The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which or under the law of which the award was made; or

6. The competent authority in the country where recognition and enforcement is sought finds that the subject matter of the difference is not capable of settlement by arbitration under the law of the country where enforcement is sought; or

7. Recognition or enforcement of the award would be contrary to the public policy of the country where enforcement is sought.

II. Comparison Of International And Domestic ADR

Domestic arbitrations often take on attributes of litigation including use of depositions, written discovery and document production. With international arbitration, there may be significant surprises for the parties and counsel including whether witnesses will be permitted to testify and if so, whether they will be subject to cross-examination. If witnesses are permitted to testify, rules govern whether they will be subject to examination by counsel and/or the arbitrator(s). Questions such as these make it extremely important to become familiar with the procedural rules of the arbitral institution before you draft an arbitration clause that binds you to such venue to resolve your future dispute.

Besides different rules and language, there are other significant differences. The cultures, perceptions and values of the participants, their counsel and the arbitrator(s) are richly variant. Legal procedures and traditions vary greatly across the globe. The civil law of continental Europe and the common law from the U.K. have basic differences in the style and content of pleadings, the role and probative value of documents and testimony, examination of witnesses, disclosure of information, rules of evidence, and the relationship and roles of counsel and the arbitrator(s).

The common law prevails in the U.K., U.S., and most English-speaking countries. The main features of the common law approach to litigation and arbitration are:

1. Early definition of the claims and issues;

2. Equality of access to and full disclosure of relevant information;

3. Avoidance of surprise; and

4. A gradual presentation with rigorous examination of the evidence at hearing (both documents and oral testimony), largely at the discretion and control of counsel.

The civil law prevails in Continental Europe, Asia, Africa and South America. Key aspects of the civil law approach to litigation and arbitration include:

1. An emphasis on privacy;

2. The claimant carries the full burden of proving its claim, and one should not have to incriminate oneself or assist its adversary in the process;

3. Claims and issues evolve as proceedings progress;

4. The evidence is presented in "dossiers" in advance of the hearing;

5. Counsel argue about the evidence and the law rather than to introduce and question witnesses;

6. Documentary evidence is given great weight, whereas oral testimony is given much less weight;

7. The judge or arbitrator(s) play an active role in questioning witnesses; and

8. It is more of a consensual process in which the parties are expected, and urged, into agreement on procedural matters during the course of the proceeding.

III. United States Involvement In International Arbitration

International arbitration is not "American litigation." Further, in international business and legal communities, there is at least some distrust of American-style litigation and "American" lawyers. U.S. parties and their legal teams should therefore recognize and be sensitive to different values, comprehend different dynamics, adjust their expectations, and be flexible when litigating in international arbitration. Successful international counsel possess cultural sensitivity and an ability to appreciate and bridge cultural differences. Counsel should also be familiar with different legal traditions and be ready to adapt the presentation of evidence accordingly.

Evidence of American presence in international commercial arbitration comes from data published by the ICC's International Court of Arbitration. Dezalay & Garth describe the ICC as the "central institution" in international commercial arbitration.11On the previous page Table 1 reports the number of American parties in ICC arbitrations from 1980-2004.12

While the number of American parties to ICC arbitration has increased significantly from an average of 70.4 per year from 1980-1988 to an average of 189.0 per year from 2000-2004, so too has the number of ICC arbitrations. As a result, the relative share of American parties has remained largely flat, increasing only from 11.2 percent during 1980-1988 to 12.1 percent during 2000-2004. That said, Americans have been the nationality most frequently involved in ICC arbitrations for every year since 1998.13

IV. Control Of The Dispute Resolution Process

Dispute resolution must be considered in the overall risk assessment for the deal or project and is essential to determine before any contract is signed. Regardless of whether the contracting parties prefer arbitration, mediation, or litigation, the parties should identify their preferred method of dispute resolution in the contract. If the contract is silent on this subject, a party may be unable to engage in litigation in a preferred forum due to personal jurisdiction objections. Moreover, confusion, delay and expense may be visited upon both parties in the event of parallel litigation in competing jurisdictions with the possibility of conflicting judgments. As long as there are differences in procedure and types of damage awards across the world's courts, parties will have an incentive to file parallel proceedings.14Besides forum shopping for the best substantive law, parties will file according to any perceived problem with enforcement of a favorable judgment.15Thus, it is imperative that a preference for litigation also be explicitly recorded in the contract, specifically addressing choice of law and venue.

V. Drafting The Arbitration Provision

When a dispute arises between the parties, the arbitration provision suddenly becomes one of the most important terms of the contract. Counsel should not repeat the mistake of many who simply cut and paste ambiguous or flawed arbitration clauses into their contracts. In this context, the word "contract" is extremely important since arbitration rights and duties arise from the contract itself. When drafting the arbitration provision, special consideration must be given to the: (i) choice of forum; (ii) choice of law; (iii) selection and number of arbitrators; (iv) language of the proceedings; (v) discovery rights and obligations; (vi) remedies; and (vii) arbitration rules and/or the arbitral institution.

The location of the arbitration is extremely important. Parties should select a country that is party to the New York Convention to help guarantee enforcement of the arbitral award. In addition, the procedural rules of arbitration are usually governed by the laws of the place of the arbitration. Accordingly, a court in the country where the arbitration is held may overturn an arbitral award based upon local procedural law governing the arbitration.16Drafters should also contemplate any unique circumstances related to the transaction including the likely location of any witnesses and evidence, travel expenses, accessibility to satisfactory facilities, and a cost-effective pool of available arbitrators.

Although the rules of arbitral institutions usually serve to guide the arbitrator in selecting what substantive law to apply, parties should take advantage of the fact that arbitrators must defer to agreed upon choice of law provisions. Because an arbitral institution's default rules may point to application of a country's substantive law that is disadvantageous to both parties, the choice of law issue should be explicitly set forth in the arbitration provision.

Parties can have the agreed upon arbitral institution select the arbitrator or they may do so themselves. Drafters who intend to select the arbitrator(s) should bear in mind any special qualifications they want the arbitrator(s) to have (e.g., educational background, experience and perhaps substantive familiarity with the subject matter of the transaction). Although the selection of one arbitrator may save some costs and may speed up the dispute resolution process, drafters may want to opt for a panel of three to maximize the likelihood of receiving an evenhanded award. Moreover, a panel may be deemed preferable where the dispute is complicated or centers on a large amount of money.

If the parties speak different languages, drafters should indicate the language of the proceedings. Not doing so may present difficulties with the arbitrator(s) selection process and unanticipated expense related to communication between the parties and with the arbitrator(s). Note that it is still beneficial to draft a language provision even if the contracting parties share a common language since the arbitration may take place in a country with a language that is unfamiliar to the parties and their witnesses. As discussed herein, the procedural rules of arbitral institutions usually address what language the arbitration will be conducted in unless otherwise agreed upon by the parties.

Discovery of evidence from the adverse party in international arbitration is typically much more limited than what a contracting party may be accustomed to, particularly a party from the United States.17If contracting parties desire to broaden the scope of such discovery, drafters should explicitly set forth certain procedures (e.g., access to opposing party's hard and electronic documents and the timing and perhaps duration of depositions). However, the parties must take care not to draft a discovery provision that is contradictory with the laws of the arbitral forum.18

With respect to remedies, the parties may want to limit exposure to only compensatory damages. Accordingly, drafters might want to include a clause that limits certain types of relief. On the other hand, if the drafters do not wish to limit an arbitrator's power to grant relief, they may include a provision that the arbitrator has "the power to adopt any appropriate remedy."

The United Nations Commission on International Trade Law ("UNCITRAL") Arbitration Rules is an example of a set of arbitration rules that is not part of an administrative institution. The rules provide a basis upon which parties may agree to conduct arbitral proceedings and are used in ad hoc arbitrations as well as administered arbitrations (many arbitral institutions allow the proceedings to be governed by the UNCITRAL Arbitration Rules). The rules cover all aspects of the arbitral process, including the appointment of arbitrators, conduct of arbitral proceedings, and effect of any award.19With the UNCITRAL Arbitration Rules having been adopted in more than 60 countries, a uniform system of judicial review of awards is developing.20

International arbitral institutions act much like a court concerning the management of the arbitration proceedings. Services may include oversight of the arbitrator selection process, forum for the hearing, collection of applicable fees and awards, and interface between the parties or between the parties and the arbitrator. Parties can choose from a number of international arbitral institutions, including the: International Chamber of Commerce; London Court of International Arbitration; Stockholm Chamber of Commerce; Commercial Arbitration & Mediation Center for the Americas; Hong Kong International Arbitration Centre; Japan Commercial Arbitration Association; American Arbitration Association International Centre for Dispute Resolution; British Columbia International Commercial Arbitration Centre; and the China International Economic and Trade Arbitration Commission.

Model Arbitration Clauses

When contracting parties desire to have the UNCITRAL Arbitration Rules govern, the following provision is useful:

Any dispute, controversy or claim arising out of or relating to this contract, or the breach, termination, or invalidity thereof, shall be settled by arbitration in accordance with the UNCITRAL Arbitration Rules as at present in force. The appointing authority shall be [name of person or institution]. The number of arbitrators shall be [one/three]. The place of arbitration shall be [city and/or country]. The language to be used in the arbitral proceedings shall be _______.21

The following clauses are meant to serve as model arbitration clauses for arbitration in the American Arbitration Association's ICDR. Drafters, however, should keep in mind any transaction-specific needs that should be further addressed.

Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be determined by arbitration administered by the International Centre for Dispute Resolution in accordance with its International Arbitration Rules. The number of arbitrators shall be (one or three). The place of arbitration shall be (city and/or country). The language of the arbitration shall be ________.22

Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be determined by arbitration administered by the American Arbitration Association in accordance with its International Arbitration Rules. The place of arbitration shall be (city and/or country). The language of the arbitration shall be ________.23

Contracting parties that would like the China International Economic and Trade Arbitration Commission (CIETAC) to govern any disputes should contemplate use of the following language in their contracts:

Any dispute arising from or in connection with this Contract shall be submitted to China International Economic and Trade Arbitration Commission for arbitration which shall be conducted in accordance with the Commission's arbitration rules in effect at the time of applying for arbitration. The arbitral award is final and binding upon both parties.24

VI. Three International Arbitral Institutions

While there are a number of international arbitral institutions, I elaborate on the following solely for the purpose of providing examples: (1) the British Columbia International Commercial Arbitration Centre; (2) the China International Economic and Trade Arbitration Commission; and (3) the American Arbitration Association International Centre for Dispute Resolution. This section highlights a select number of the arbitration rules of each of these institutions.

The International Centre for Dispute Resolution ("ICDR"), the international division of the American Arbitration Association ("AAA"), was established in 1996. The ICDR has established cooperative agreements with 62 arbitral institutions in 43 countries. These agreements enable arbitration cases to be filed and heard in any of these 43 nations. Once a case is filed, case managers serve as the court clerk and keep parties apprised on the progress of their case. The ICDR maintains a panel of more than 400 independent arbitrators and mediators located across the globe.

The British Columbia International Commercial Arbitration Centre ("BCICAC") in Vancouver, British Columbia, is a not-for-profit organization that was established in 1986. It was founded with the support of the governments of British Columbia and Canada. Parties can petition the BCICAC to administer a mediation or arbitration. The BCICAC may assist with the selection of an appropriate and qualified mediator or arbitrator. The BCICAC's services also include rules of procedure and assistance in determining where and when proceedings are held.

The CIETAC was established in 1954 as the Foreign Trade Arbitration Commission and was renamed in 1989 to its current name. It operates under the China Council for the Promotion of International Trade (CCPIT). Since 2000, the CIETAC has also been referred to as the Arbitration Court of the China Chamber of International Commerce (CCOIC). The CIETAC headquarters is located in Beijing with two sub-commissions in Shanghai and Shenzhen. The CIETAC also has 19 liaison offices located in different regions throughout China.25

1. Number of Arbitrators

Unless the parties can agree on the number of arbitrators, the general rule under the BCICAC Rules of Procedure is for there to be three arbitrators unless the BCICAC determines, in its discretion, that there shall be a sole arbitrator.26Where three arbitrators are to be appointed, each party is to name one arbitrator, and the two appointed arbitrators appoint the remaining arbitrator who is to act as the presiding arbitrator.27If a party fails to name an arbitrator, the other party can request the BCICAC to appoint the arbitrator.28Under circumstances where the BCICAC is to select an arbitrator, it will heed any qualifications required of the arbitrator as agreed to by the parties.29Under the CIETAC's Commercial Arbitration Rules, the arbitration tribunal may be composed of one or three arbitrators as agreed upon by the parties.30If the parties fail to agree and notify the CIETAC or if the rules provide otherwise, the tribunal will be composed of three arbitrators.31Where the arbitral tribunal is composed of three arbitrators, the Claimant and Respondent have 15 days from the date of receipt of the Notice of Arbitration to appoint one arbitrator. If a party fails to appoint or entrusts the CIETAC Chairman to appoint an arbitrator on the party's behalf, then the Chairman will automatically appoint an arbitrator.32Within 15 days of the Respondent's receipt of the Notice of Arbitration, the presiding arbitrator will either be jointly appointed by the parties or appointed by the Chairman upon the parties' joint authorization.33

With respect to the ICDR, though the parties may mutually agree upon any number of arbitrators, the general presumption is that only one will be appointed if the parties fail to reach a consensus.34Notwithstanding the foregoing, the administrator may determine that three arbitrators are appropriate because of the large size, complexity, or other circumstances of the case.35

2. Commencement of Arbitral Proceedings

The requirements for commencing the arbitration under the ICDR largely mirrors those of the BCICAC.36An arbitral proceeding at the BCICAC is commenced when a claimant delivers a notice of request for arbitration to the respondent(s) and BCICAC.37The notice of request for arbitration must include: a request that the dispute be referred to arbitration; the names and addresses of the parties to the dispute; a reference to the arbitration clause or separate arbitration agreement relied upon; a reference to the contract out of or in relation to which the dispute has arisen; the general nature of the claim and an estimate of the value of the dispute; the relief or remedy sought; and the preferred number of arbitrators, if not already agreed upon. Additionally, the notice of request for arbitration must be accompanied by the required non-refundable commencement fee per the fee schedule.38

Although the manner in which arbitration is commenced under the CIETAC's rules closely follows the process under the BCICAC's rules, there are differences. For example, the CIETAC Request for Arbitration does not require a reference to the contract out of or in relation to which the dispute has arisen, an estimated value of the dispute, the relief or remedy sought, nor the preferred number of arbitrators. Rather, in addition to other BCICAC requirements, a CIETAC request for arbitration must include a statement of facts and main issues in dispute, facts and grounds upon which the claim is based, and relevant evidence supporting the facts upon which the claim is based.39

3. Representation, Witness Testimony, & Experts

Parties may be represented or assisted by any person during arbitral proceedings at the BCICAC, CIETAC or ICDR. A BCICAC tribunal may allow the evidence of a witness to be presented in the form of a written statement signed by the witness.40With regard to experts, a BCICAC tribunal may appoint one or more experts to report to it on specific issues to be determined by the panel and require a party to give the expert any relevant information or to produce any relevant documents or other property for inspection by the expert.41As is the practice in a proceeding before the BCICAC, evidence of witnesses in an ICDR proceeding may also be presented in the form of signed written statements.42If the ICDR tribunal elects to employ an independent expert, the parties have a right to question the expert at a hearing.43A CIETAC tribunal may appoint experts or appraisers to advise the tribunal with respect to any necessary issues. Findings are reported in an expert's or appraiser's report. Additionally, after the submission of findings, at the request of either party and with the approval of the tribunal, the expert and appraiser may be requested to provide explanations of their reports at an oral hearing.44Note that under the BCICAC Rules of Procedure, a tribunal may permit a party to examine an expert but the party is not necessarily entitled to do so.

4. Apportionment of Costs

Under Art. 38 of the BCICAC's rules, the costs of the arbitration are to be borne by the unsuccessful party unless the tribunal determines that it is appropriate to apportion the costs between the parties.45The CIETAC differs from the BCICAC on this subject. Whereas the presumption in the BCICAC is that the losing party bears the burden of remuneration, the presumption in the CIETAC is that the arbitration tribunal will determine the allocation of the arbitration costs.46Similarly, the ICDR tribunal will apportion costs among the parties if it determines such apportionment to be reasonable.47These costs may also include the reasonable fees for the successful party.

5. Language of the Proceedings & Applicable Substantive Law

Determination of the language to be used in the proceedings is based on the submissions of the parties and the language of the arbitration agreement in both BCICAC and CIETAC proceedings. However, absent such agreement, the Chinese language shall be used in CIETAC proceedings.48In ICDR proceedings, the language shall be that of the documents containing the arbitration agreement, unless the tribunal determines otherwise.49

The ICDR and BCICAC take similar positions with respect to ascertaining what substantive law applies to the dispute. Where there is no agreement, the BCICAC applies ". . . the rules of law it considers to be appropriate given all the circumstances . . . ."50Article 28 of the ICDR's rules uses similar language. The CIETAC arbitration rules are formulated in accordance with the Arbitration Law of the People's Republic of China and the "provisions of other relevant laws. . . ."51In addition, Article 4 of the CIETAC rules provides: "Where the parties have agreed on the application of other rules, or any modification of these Rules, the parties' agreement shall prevail except where such agreement is inoperative or in conflict with a mandatory provision of the law of the place of arbitration." Article 145 of the PRC General Principles of Civil Law provides: "The parties to a contract involving foreign interests may choose the law applicable to settlement of their contractual disputes, except as otherwise stipulated by law. If the parties to a contract involving foreign interests have not made a choice, the law of the country to which the contract is most closely connected shall be applied."52In the absence of any express choice of law by the parties to a foreign-related arbitration, the tribunal will apply such law as it determines appropriate.

VII. Trends And Strategies

Commonly praised as a more effective and efficient alternative to international litigation, international arbitration has been recently scrutinized for shortfalls traditionally associated with litigation including excessive costs and lengthy duration of proceedings. This criticism comes concomitantly with an increased number of parties that have turned to international arbitration as their preferred method of dispute resolution.53The new found popularity of international arbitration is directly attributed to the growth in size and complexity of disputes.54

To meet the expectations of international commerce and to preserve certain advantages over traditional forms of dispute resolution, arbitration proceedings must remain time and cost efficient. Strategies to best manage cost and duration of proceedings are currently being addressed by a number of developments in the international business, court, and institutional communities. Examples of such developments include a prospective review of the New York Convention to ensure that the demands of modern arbitration are being met and an increased adoption of the UNCITRAL Model Law to further the development of a uniform system of judicial review of awards, and the maintenance of the policy choice of limited review of awards. The U.S. Supreme Court's March 2008 decision in Hall Street Associates LLC v. Mattel, Inc ., held that the scope of judicial review of an arbitral award is exclusively determined by the FAA. The decision effectively nullifies any contractual provision which expands or narrows judicial review of arbitral awards under Title 9.55

Although every arbitration proceeding is different, counsel can and should plan for the appropriate level of complexity and associated costs required for the proceeding. The exercise of risk assessment and proper planning can assist parties to create a well-tailored strategy and approach to the arbitration. For example, parties may choose to take advantage of procedural flexibilities and elect to have one instead of three arbitrators, limit discovery and number of experts and/or elect to change the site of the arbitration from a large expensive metropolitan city to an alternate location more convenient for the parties and witnesses. This combination of small-scale and large developments in the international arbitration arena can help better meet the expectations of the international commercial community while avoiding the excessive costs and lengthy duration associated with litigation.

Conclusion

The international business community requires the quick and efficient resolution of commercial disputes. Attorneys involved in international commercial disputes should properly advise their clients on the availability and attractiveness of international ADR, whether it be in the form of arbitration or mediation. Whatever type or combination of ADR is chosen, parties should be sensitive to the differences in understanding of the ADR process often held by opposing parties to an international commercial dispute. Up-front planning and communication on this subject, before the dispute arises, will go a long way toward controlling costs and will likely lend to a more satisfactory dispute resolution process.
1 Black's Law Dictionary 78 (7th ed. 1999).

2 Klaus Peter Berger , International Economic Arbitration, 8 & n. 62 (1993) (citing Albert Jan van den Berg et al., Arbitragerecht, 134 (1988)); see also Christopher R. Drahozal & Richard W. Naimark , Towards a Science of International Arbitration: Collected Empirical Research, 59 (2005) (finding that 88.2% of a small sample of transnational joint venture contracts include arbitration clauses).

3 PricewaterhouseCoopers & Queen Mary University of London, Press Release , International Arbitration: Corporate Attitudes and Practices (2006).

4 See http://www.uscourts.gov/caseloadstatistics. html.

5 The Economist, February 2007.

6 The Economist, February 2007.

7 Chul-Gyoo Park , A Comparative Analysis of Arbitral Institutions and Their Achievements in the United States and Korea, 15 Am. Rev. Int'l Arb. 475, 488-489 (2004).

8 J. Gillis Wetter , The Present Status of the International Court of Arbitration of the ICC: An Appraisal, 1 American Review of International Arbitration 91, 93 (1990).

9 See http://www.uncitral.org/uncitral/en/uncitral _texts/arbitration/NYConvention_status.html.

10 See http://www.unctad.org/Templates/webflyer. asp?docid=8270&intItemID=4431&lang=1.

11 Yves Dezalay & Bryant G. Garth , Dealing in Virtue: International Commercial Arbitration and the Construction of a Transnational Legal Order, 45 (1996).

12 The sources for the data in Table 1 are W. Laurence Craig et al., International Chamber of Commerce Arbitration, 732, 734, table 5 (3d ed. 2000) (hereinafter ICC Arbitration, 3d ed.); W. Laurence Craig et al., International Chamber of Commerce Arbitration, app. 1-8, I-11, table 5 (2d ed. 1990); and 2000-2004 Statistical Reports, 12(1)-16(1), ICC Int'l Ct. of Arb. Bull. (2001-2005).

13 See 1998-2004 Statistical Reports, 10(1)-16(1), ICC Int'l Ct. of Arb. Bull. (1999-2005).

14 Louise Ellen Tietz , Taking Multiple Bites of the Apple: A Proposal to Resolve Conflicts of Jurisdiction and Multiple Proceedings, 26 Int'l Law. 21 (1992).

15 Id .

16 Alghanim & Sons, W.L.L. v. Toys "R" Us, Inc , 126 F.3d 15 at 23 (2d Cir. 1997).

17 Javier H. Rubinstein, "International Commercial Arbitration: Reflections at the Crossroads of the Common Law and Civil Law Traditions." 5 CHI J. INT'L L. 303 (2004).

18 Deborah L. Holland , Comment, Drafting a Dispute Resolution Provision in International Commercial Contracts, 7 Tulsa J. Comp. & Int'l L. 451, 472 (2000) (citing Donald Francis Donovan & David W. Rivkin , International Arbitration and Dispute Resolution, 786 PLI/Comm 143, 155 (1999)).

19 United Nations Commission on International Trade Law Arbitration Rules , available at http://www.uncitral.org/uncitral/en/uncitral_texts/arbitration/1976Arbitration_rules.html.

20 See http://www.uncitral.org/uncitral/en/about/origin_faq.html.

21 Deborah L. Holland , Comment, Drafting a Dispute Resolution Provision in International Commercial Contracts, 7 Tulsa J. Comp. & Int'l L. 451, 476 (2000) (citing Robert Donald Fischer & Roger S. Haydock, International Commercial Disputes: Drafting an Enforceable Arbitration Agreement, 21 Wm. Mitchell L. Rev. 941, 983 (1996).

22 American Arbitration Association, International Dispute Resolution Procedures, (2003) (pamphlet).

23 American Arbitration Association, International Dispute Resolution Procedures, (2003) (pamphlet).

24 The China International Economic and Trade Arbitration Commission Model Arbitration Clause, http://www.cietac.org.cn/english/model_clause/model_clause.htm.

25 See http://www.cietac.org.cn/english/rules/ rules.htm (last visited on August 23, 2008).

26 Art. 5, International Commercial Arbitration Rules of Procedure, British Columbia International Commercial Arbitration Centre, http://www.bcicac.com/bcicac_ica_rules.php#FeeSchedule ("BCICAC Rules").

27 Art. 7, BCICAC Rules.

28 Id.

29 Art. 8, BCICAC Rules.

30 Art. 20, The China International Economic and Trade Arbitration Commission Arbitration Rules, available at http://www.cietac.org.cn/english/rules/ rules.htm ("CIETAC Rules").

31 Id.

32 Art. 22, CIETAC Rules.

33 Id.

34 Art. 5, American Arbitration Association, International Centre for Dispute Resolution, International Dispute Resolution Procedures, available at http://www.adr.org/sp.asp?id=28144 ("ICDR Rules").

35 Id.

36 Art. 2, ICDR Rules.

37 Art. 17, BCICAC Rules.

38 Id. In addition, please see Art. 40, BCICAC Rules.

39 Art. 10, CIETAC Rules.

40 Art. 27, BCICAC Rules.

41 Art. 29, BCICAC Rules.

42 Art. 20, ICDR Rules.

43 Art. 22, ICDR Rules.

44 Art. 38, CIETAC Rules .

45 Art. 38, BCICAC Rules.

46 Art. 43, CIETAC Rules.

47 Art. 31, ICDR Rules.

48 Art. 67, CIETAC Rules.

49 Art. 14, ICDR Rules.

50 Art. 30, BCICAC Rules.

51 Art. 1, CIETAC Rules.

52 Art. 145, PRC General Principles of Civil Law, available at http://en.chinacourt.org/public/detail.php?id =2696.

53 PricewaterhouseCoopers & Queen Mary University of London, Press Release, International Arbitration: Corporate Attitudes and Practices (2006).

54 Michael Goldhaber, Sneak Peek, Focus Europe , available at http://www.americanlawyer.com/focuseurope/privatepractices.html.

55 128 S. Ct. 1396 (2008).

Randy J. Aliment, a Partner with Williams Kastner, practices in the field of commercial law, business litigation and arbitration and higher education law. He has represented clients before numerous courts in the U.S. and Canada and negotiated agreements for clients in transactions in Europe, the Middle East. Canada and China. He is one of four ABA delegates to the Council of the UIA International Lawyers Association headquartered in Paris. This article, Alternative Dispute Resolution in International Business Transactions, was previously published in the American Bar Association publication The Brief, volume 38, number 4, Summer 2009. ©2009 by The American Bar Association. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in any electronic database or retrieval subsystem without the express written consent of the American Bar Association.

Please email the author at raliment@williamskastner.com with questions about this article.