International Commercial Arbitration – ICA
Is the process delivering justice?
FICM-MCN is changing the world order, creating an ecosystem, setting new dynamic norms for managing disputes in the modern digitized world.
The rapid growth of international trade and exposure to new partners, countries, cultures, legal systems and trade practices is bringing new challenges and risks for the international cross-border trading and commercial transactions.
The recent surveys show that there is growing concern over the process. International Commercial Arbitration (ICA) is losing its credibility and attraction among the parties due to excessive costs, time and unpredictable arbitral awards. Even as arbitration awards find criticisms from the losing side, so little has changed in terms of the mechanisms and procedures used by institutions, tribunals and practitioners.
There is a strong concern about impartiality and the perception that decisions are being made by an ‘old boys’ club’. A limited pool of arbitrators with institutions is one of the causes of resulting delays in scheduling hearings and receiving awards.
Dispute management, prevention and resolution is one of the very important aspect of risk management in international commerce and transactions and dealing with international cross border disputes is becoming highly expensive and effects small businesses to its core, sometimes endangering their existence.
How can businesses avoid or resolve disputes during various contractual phases, from negotiation through to performance?
The lack of a delocalized international court system with the power to resolve private cross-border disputes of all kinds has led to a fragmentation of dispute settlement forums, and arbitration became the preferred method for the resolution of such disputes. Mainly due to the fact that legal fraternity world over pushed this private adjudicative method of dispute resolution – the most loved method of qualified legal professionals around the world.
Until recently, international arbitration was widely seen as fair, neutral, and effective. The field’s rapid growth reinforced this perception, helping establish international arbitration as the default mechanism for resolving transnational disputes. Today, this perception is changing. International Arbitration is becoming too costly, time consuming and inefficient. Many now doubt the fairness of the arbitration process, the integrity of some decision makers and institutions, the binding effect of awards, the options of appeals when awards are arbitrary and the legitimacy of awards obtained in international arbitration. The arbitration system has become too arbitrary and broken down to a degree and needs a new avatar – a new way to deal with international cross border dispute resolution.
There are several methods and mechanisms of dispute resolution, not just arbitration, many of these methods can be combined with arbitration, to ensure early and cost effective resolution with the binding effect and enforcement of the awards.
In the last few decades, the use of other consensual hybrid ADR mechanisms has increased, but not much happened in the International Commercial Dispute Management arena. Most of the arbitrators and institutions have acted alike, to predominantly focus on the adjudicative approaches only. The reason is simple – the law professionals ingrained habit of using adjudication as a default measure. Most of the institutions are lead and driven by law professionals and the RESOLUTION through consensual methods is missing or rarely used.
Dealing with cross border dispute brings lot of additional stress and anxieties due to the uncertainties and lack of understanding of laws, institutions and processes followed by international tribunals, institutions and professionals.
There is a strong need of one “Delocalized international commercial dispute management system” governed by the businesses and business stakeholders themselves.
We cannot rely on just one process “Arbitration” and just few institutions administering this process with limited pool of arbitrators for resolution of commercial disputes. We need an inclusive, integrated comprehensive system in place that is free of all the systemic bias and overload.
Currently, international commercial arbitration embodies, to a large extent, western standards, but a key question is whether or not those standards are the correct standards of finding commercial solutions around the world. Today, we need a system and an institution that attracts and appeals to a growing base of users from the developing world. Merging different arbitration cultures (eg East, West, developed and developing) and using a hybrid or combination of different processes (not just Arbitration) will make this world a safer place to transact and trade across borders. The practice and regulation of international arbitration must better respect its broad international user base: to recognize the international nature of arbitration and to fully integrate different approaches and attitudes towards arbitral law and practice.
Parties need a wider range of DR options besides Arbitration, to select a method most appropriate to their cause and to resolve commercial and trade disputes in the best interest of International trade community and all its stakeholders and to deliver actual justice to all parties – big or small.
Parties in the international commerce need to feel secure, having a safety net to protect their genuine business commercial interests within a well defined and dynamic commercial dispute resolution eco-system.
When you are in an international arena, wanting to protect your own commercial interests related to cross border transactions. Maybe only you and the other party will have to care about the safety and management of conflicts between themselves in most apt manner. The business communities in cross border disputes cannot leave this most important aspect to the states or independent institutions as no one other than businesses themselves will be able to see or care for the ever changing perspectives, needs and interests of businesses in the International transactions. Complacency is the buzz word. The international rule makers will be complacent about the process and the outcome until we ourselves find the solution. No outsiders will be able to continually recognize the changing demands of the users of the process.
International Businesses need a system that is governed by them.
We all need a system that is all time concerned and flexible about the ever changing needs and demands of communities in the international cross border transactions and ensure that the complacency is never the barrier to this most important safety need of businesses in international transactions.
How FICM-MCN ecosystem is enabling dispute resolution for international commercial transactions?
Governed by all its members, FICMMCN is transforming the International Commercial Arbitration landscape. It will now be no more an old boys club or the sole domain of handful arbitrators operating from handful arbitration Institutions and select jurisdictions.
The new world thinkers and doers, innovators and a diverse plethora of wisdom are changing the way commercial disputes are resolved internationally. The plain “Arbitration” with age old process is giving way to innovative hybrid approaches, designed, devised, developed and administered by the institution that is governed by the international business community itself.
Parties are willing more and more to appoint new faces backed by the FICM-MCN trust for neutrality, quality and efficiency to ensure speedy proceedings and awards that set the disputes to finality. The strong conflict rules; procedural controls and unique mechanisms of appointments of Neutrals are enhancing the legitimacy of the process and overall satisfaction of parties with the process and its outcome.
As international commercial transactions have grown in complexity, self- governed international commercial dispute system is emerging as a governance structure that possess the requisite flexibility, technical expertise, privacy, confidentiality, and speed to allow these transactions to operate efficiently.
By employing a wide range of highly professional new world dispute resolvers (mediators, arbitrators etc.) FICM-MCN is creating a highly effective system in which rarely awards may be challenged.
Governed by its members from around the world, the organization is one of its kind neutral body shaping the International Commercial Dispute System design, that serve the best interests and needs of international trade and commerce.
FICM-MCN will keep on establishing a hierarchy of commercial legal norms that integrate both transnational and domestic public policy concepts. This hierarchy of norms, along with democratic structure governed by all members, will form the core of our emerging constitutional order beyond the nation-state, to accomplish the mission of one world, one institution – to deliver commercial meditative justice.
The goal is to all time maintain international commercial dispute resolution as a flexible, speedy and cost-efficient mechanism where the FICM dispute resolvers conduct the process according to the requirements of the particular case and not try to use a one size fits all approach. FICM-MCN is developing and enriching the practice of international integrated arbitration (integrated dispute resolution) to address issues of integrity, high costs, uncertainty and delays etc. that plague the system today.
A change in the culture is desperate need of the time that ensures selection of due process, seat of arbitration, venue, selection and appointment of dispute resolution experts as neutrals (negotiators, mediators, arbitrators etc).
To achieve this support for the International Commercial Dispute Resolution, it is necessary to construct one autonomous global-wide ecosystem, a network and a culture that defines International Commercial Dispute Resolution. A governing structure which will define modern arbitration, to move towards instituting own mandatory norms and to defend the continued expansion of capitalism and legitimize the private resolution of International Commercial Disputes.
FICM-MCN is addressing this key issue of impartiality and perception that disputes are handled by a small club or old boy’s school, by the appointment of the largest, widest and deepest pool of talent as Neutrals from around the world.
Rules of Dispute Resolution Processes
The FICM-MCN Rules are the most comprehensive range that can custom fit almost all kinds of cases emanating from contracts and jurisdictions. This approach needs a very tightly managed dispute management system governed by the users only, as the commercial agreements at times, rarely describe in detail how the dispute resolution procedure will be conducted, and once a dispute has arisen, parties often find it hard to agree on such matters.
Enforcement and the true time line of resolving an arbitral dispute.
The enforceability of arbitral award is something that one needs to consider at the very outset of the proceeding because if there is no prospect of finding assets against which to enforce the award, then one is going to be throwing good money in a deep hole. The enforcement of arbitration awards is something that often involves skilled conduct of the proceedings.
At the time of contract negotiation, one must make sure that waivers of sovereign immunity are in the contract to provide with the opportunity of going after a governmental agency and ultimately enforcing an award against its assets or against the assets of the sovereign without being faced with the defense of sovereign immunity.
Out of the anxieties, corporate parties’ try to choose governing law (seat) of their home jurisdictions. When that is not possible, parties in countries those are not favored as seat of arbitration have a tough time to decide the choice of seat. Although governing law is one most critical factor for parties, but its impact can be limited to some extent with a carefully drafted contract. Horror stories of enforcement delays are many, where an arbitral award rendered in 2004 and valued at over several hundred millions was still subject to an enforcement stay in England in 2015.
As courts have found, the role of arbitration is to foster international trade and that role is underwritten by institutions, courts, arbitrators, advocates and parties alike. The competitive diversity of stakeholders created by FICM-MCN in international commercial dispute resolution is the cornerstone of neutrality and speedy justice and constitutes the force that makes it a most reliable forum for dispute resolution.
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