Arbitral proceedings

In addition to 'standard' legal proceedings, there is also an alternative form of dispute resolution: arbitration. In arbitration a set of unique rules is followed, and it differs from standard procedures taking place in courts or courts of appeal. The following section outlines both the advantages and disadvantages of arbitration.

Arbitration Act
Arbitration is considered a private form of jurisdiction, in which disputes are settled by an impartial arbitrator or panel of arbitrators. This procedure takes place outside the traditional courts and follows specific procedural rules, laid down in separate manuals. Only a modest chapter ('Book 4') in the Code of Civil Procedure outlines the creation of arbitration and its fundamental requirements in general.

Advantages of arbitration
Arbitration offers significant advantages over conventional jurisdiction, including:

1. Confidentiality of the dispute and its outcome.
2. Pre-selected arbitrators based on expertise, leading to efficient dispute resolution.
3. Limitation of protracted proceedings, as in general there is no appeal against an arbitral ruling.
4. International recognition of an arbitral award, making it readily executable in other countries.
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Disadvantages of arbitration
The main disadvantage of arbitration is the costs. Arbitrators often charge high hourly rates, which lead to significant fees. A substantial retainer, often in many thousands of euros, is usually requested upfront before arbitral proceedings are initiated.

Arbitratal agreement
Arbitral proceedings can only be initiated if the parties agree on this in advance. Such an agreement must be clear, as its absence may prevent parties from turning to arbitration. An arbitral clause not only imposes this procedure on the parties, but also adds the challenge of significant costs for them.

The arbitral award
In general, an arbitral award is not subject to appeal - it is binding. The parties must conform to the arbitral award, which has an international scope, so that it is recognised in many countries. This makes arbitration attractive for parties doing business internationally, especially outside the EU.

At Heron Legal, we have the right specialists who can assist you every step of the way in the arbitration process. Want to know more or have other questions about the arbitration process? Please feel free to contact us.