Place of arbitration: Overview, definition, and example
What is the place of arbitration?
The place of arbitration refers to the physical location or jurisdiction where an arbitration proceeding takes place. Arbitration is a method of resolving disputes outside of court, where an impartial third party, called an arbitrator, makes a binding decision. The place of arbitration is important because it determines the legal framework, rules, and procedures that will govern the arbitration process, such as which country’s laws will apply, where hearings will be held, and how certain procedural matters will be handled.
For example, if two companies from different countries enter into an arbitration agreement, they may agree to have the arbitration conducted in a neutral location, such as London or New York, depending on their preferences.
Why is the place of arbitration important?
The place of arbitration is important because it influences several key aspects of the arbitration process, including:
- Legal framework: The country or region where the arbitration takes place will determine which laws govern the process, such as the rules for appointing arbitrators, enforcing awards, and handling disputes.
- Procedures: Different jurisdictions have different rules and practices for arbitration, such as how hearings are conducted, timelines for filing documents, and how evidence is presented.
- Enforcement: The place of arbitration also affects the ease with which the final arbitration award can be enforced. Some countries have international treaties (like the New York Convention) that make it easier to enforce arbitral awards in other countries.
For businesses, choosing the right place of arbitration helps ensure that the arbitration process is fair, efficient, and enforceable. For individuals, it guarantees that their dispute will be resolved in a location with a solid legal infrastructure for arbitration.
Understanding place of arbitration through an example
Imagine two companies, one based in Germany and the other in Japan, sign an international contract with an arbitration clause stating that any disputes will be resolved through arbitration in Singapore. If a dispute arises, the arbitration hearings will be held in Singapore, and Singapore’s laws and arbitration rules will apply. The choice of Singapore as the place of arbitration offers both companies a neutral and accessible location, with established arbitration institutions and a legal framework supporting the process.
In another example, two U.S.-based companies may agree to arbitrate their dispute in New York. This means the arbitration will follow the legal procedures in New York, and the award will be easier to enforce within the U.S.
An example of a place of arbitration clause
Here’s how a place of arbitration clause might appear in a contract:
“Any disputes arising from this Agreement shall be resolved through arbitration in Zurich, Switzerland, in accordance with the rules of the International Chamber of Commerce (ICC). The place of arbitration shall be Zurich, and the arbitration proceedings will be conducted in English.”
Conclusion
The place of arbitration is the designated location where arbitration proceedings take place and plays a critical role in determining the legal and procedural framework for resolving disputes. Choosing an appropriate place for arbitration ensures that the process is efficient, fair, and legally supported, making it an essential consideration for businesses and individuals entering into arbitration agreements.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.