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International arbitration - what it is and when to use it

When California business owners decide to expand into the global marketplace, understanding how to navigate the cultural and legal environment of international trade becomes essential to their success. When business disputes come into play, this rings even more true; often, global organizations need the assistance of attorneys with experience in international arbitration to help.

What is international arbitration? The definition Cambridge Dictionary provides spells it out simply: "a legal process aimed at solving disagreements between companies from different countries without using a court of law."

An article the Silicon Valley Arbitration and Mediation Center published explains when it is appropriate to consider making use of this particular legal process. Rather than waiting until a disagreement comes up, the article suggests getting assistance from counsel much earlier in the process.

An initial cross-border contract needs to make space for how the parties will handle disagreements. Thinking ahead and including provisions in the original deal can potentially save a lot of headaches later on. In fact, the SVAMC article suggests "agreeing to international arbitration to resolve an existing international dispute increases the likelihood of efficient, reliable and cost effective dispute resolution." 

Some advantages the article points out about settling business disputes in this way include:

  • Reducing costs
  • Giving opportunity for both sides to choose arbitrators
  • Offering a strong chance for fairness in the solution
  • Streamlining the process
  • Resolving the issue with "a single tribunal"

Other important points to consider are choosing the best location that has arbitrators knowledgeable about your industry and getting guidance from attorneys who have international arbitration experience. 

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