The Benefits of Arbitration in Commercial Disputes
There are a number of reasons why parties to a commercial agreement should consider having their disputes adjudicated through the arbitration process rather than before the courts. The following are five of those reasons:
- You choose the arbitrator– In arbitration, the parties choose the arbitrator or arbitrators who will hear and decide the commercial dispute. Arbitrators often develop an expertise in commercial law matters and have a detailed understanding of the practical and legal considerations associated with the dispute. Litigants who appear before the courts do not have the liberty of choosing their judge. Judges generally hear a variety of matters and are less likely to develop an expertise on specific commercial law issues.
- The arbitrator will hear the entire dispute – The arbitrator will hear the commercial dispute from beginning to end. This continuity allows for efficient hearings. Commercial litigants who opt for the courts will likely appear before various judges or masters during the course of the litigation.
- The arbitration may be kept confidential – As a general rule, court proceedings are public whereas the parties to a commercial arbitration may choose to keep the proceeding confidential. Depending on the nature of the commercial dispute, confidentiality may be an important consideration.
- The arbitration process is flexible – The arbitration process is more flexible and than the rules of court. The parties to an arbitration can agree on the procedural rules which will apply to their dispute.
- The arbitration process is quicker – As a general rule, arbitration proceedings are much quicker than court proceedings. Along with the other advantages of arbitration discussed above, the speed at which an arbitration can take place often results in significant costs savings.
In order to benefit from the arbitration process, parties should include an arbitration provision in all commercial agreements. This arbitration provision will ensure that once a dispute arises, the parties must submit the dispute to arbitration.
There are a number of issues which may be included in the arbitration provision. These include the number of arbitrators, the process of choosing the arbitrator(s), the locations of the arbitration and, in an international context, the applicable law and language of the arbitration.
Joël M. Dubois is a member of the Litigation Law Group at Perley-Robertson, Hill and McDougall LLP/s.r.l. He may be reached 613-566-2815 or at firstname.lastname@example.org.
This article was originally published in the March 23, 2009 edition of the Ottawa Business Journal.