International Arbitration Recognized by State Laws

International arbitration and litigation are the two solutions to commercial disputes. Compared with litigation as a means of public relief, arbitration shall be considered a means of private relief, yet the latter is recognized by state laws. Arbitration has therefore become a legal system. In China, one has to make a choice between arbitration or trial, i.e., to solve an economic dispute by either filing a lawsuit or initiating international arbitration.

The arbitration award is the embodiment of exercising arbitration by the arbitral tribunal and an important legal document to determine the rights and obligations of the parties. The arbitration award not only reflects the level and impartiality of the arbitration tribunal in hearing cases, but also directly affects the reputation and image of the arbitration institution. A reasonable award is not only conducive to the fulfillment among parties but also resolves contradictions between parties quickly and effectively, which promotes social harmony and stability and enhances the efficiency of the market economy. Hence, generating a reasonable arbitration award is of great significance.

(1) The international arbitration award shall be final and binding. Litigation may involve the first instance, the second instance or even retrial, but the arbitration award is final and binding, so that the dispute comes to a definite and final conclusion in a short time.

(2) The expert panel ensures the predictability of results. Unlike litigation cases, which are decided by relatively fixed judges, arbitration is conducted by arbitrators from all walks of life with various professional backgrounds.

(3) Arbitration procedures are negotiable and alterable. First, the parties may agree on and design their arbitration procedures through negotiation, including the number of people in the arbitral tribunal, place of the court session, and language. Second, the arbitration tribunal has greater autonomy to decide the procedures according to the specific situation of the case during proceedings.

(4) Arbitration awards can be recognized and enforced internationally. In accordance with the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention 1958), arbitration awards are recognized and enforced in more than 100 convention countries.