What is arbitration

What is arbitration

Arbitration is the administration of justice by private judges, called arbitrators, and is a form of alternative dispute resolution. Arbitration is a way of resolving a legal dispute in which the parties themselves choose to have arbitrators decide instead of a judge. Arbitrators decide on the claims made by the parties in an arbitral award. The ruling is final and binding on the parties. Arbitration is an effective alternative to court proceedings.

NAI arbitrage vergeleken met de rechter

Why arbitration?

Companies choose arbitration to resolve business disputes because of the following advantages:

1. Confidentiality: Safeguarding trade secrets and protecting reputation
2. Speed: Efficiently resolving a business dispute in one year instead of years of court proceedings.
3. Lower total costs: Save on legal fees because the dispute is resolved in one go and there is nog appeal.
4. Customisation: Procedures tailored to the parties and the dispute.
5. Reimbursement of legal costs : Protection against futile claims and full reimbursement of reasonable legal costs for the winning party.
6. Expertise: Disputes are settled by expert arbitrators with relevant expertise.
7. Enforceable worldwide: An arbitral award is also enforceable outside of Europe.

Advantages of arbitration

The arbitration agreement

Arbitration requires an agreement. In most cases, the agreement consists of a contract clause stipulating that all future disputes will be submitted to arbitration (the arbitration clause). The NAI model arbitration clause can be generated with a few clicks using the button below. An agreement to arbitrate is concluded as an arbitral compromise for existing disputes. Arbitration under the NAI Arbitration Rules also requires that the parties have referred to arbitration by or at the NAI or according to the Rules.

A common misunderstanding among company lawyers and even lawyers who draw up contracts is that the place of arbitration is where the hearings must be held. The place of arbitration is only the legal place of arbitration and, in many cases, determines which arbitration law applies. Hearings can occur anywhere worldwide and are increasingly taking place digitally to limit costs.

Draft an arbitration clause