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Advantage and disadvantage of the litigation and arbitration

Time:2014-03-13 Hit:208


Advantage and disadvantage of the litigation and arbitration


  Trial proceedings are the embodiment of national jurisdiction. Litigation on the scope of accepting cases, jurisdiction, composing of Chamber, trial procedures, all the procedures are mandatory; the procedural law cannot reflect the autonomy of the parties, the parties do not have voting rights. "Full respect for the autonomy of the parties" is the heart and soul of arbitration law, and throughout the whole spirit of the law, it always embodies the people-oriented thought.

Advantages of arbitration are as follows:

  First of all, impartiality. According to the independent exercise of the right to arbitration of the Arbitration Committee, the arbitration is not subject to interference by any administrative organ, public organization, or individual.

  Secondly, voluntary. Arbitration disputes over the implementation of the voluntary principles and the Conference of the parties or the system, and is not subject to geographical distribution. If the parties are willing to, you can choose to trust the parties for arbitration to resolve the dispute. Also, you can choose to trust arbitrators; the parties are willing to sit and hear the parties. Without arbitration agreements, arbitration, arbitration was inadmissible;

  Third, confidential. Arbitration is generally not heard in public, for the client's business secrets, maintain the image and reputation of the party.

  Forth, arthritic. Upon the making of the arbitration award, it shall come into legal effect. The other party may apply to the court for enforcement of such arbitration award.

  Fifth, efficiency. Under the relevant provisions of arbitration institutions, the arbitral tribunal shall make their decision within a certain period (time limitation).

  There are some major disadvantages to litigation; not only the procedure is expensive, but the whole process would likely be slow and time-consuming. Moreover, the litigation process may very well attract adverse publicity, and it would not be possible to keep the dispute out of the public eye. In fact, once the dispute becomes public, it may also become much more difficult to reach a settlement. Other disadvantages associated with the litigation option are that any judgment may still be subject to appeal. Any coup judgment, therefore, may not immediately produce finality. Furthermore, given the adversarial nature of the proceedings, litigation is very likely to have an adverse impact on the business relationship. Not to mention the fact that it is necessary to rely on Chinese lawyers only; in fact, foreign lawyers are not allowed to act in court.

  Arbitration is the most formal mechanism, and there are a number of advantages associated with this process that should be stressed. For instance, the ability of parties in arbitration to be able to choose a neutral tribunal is seen as one of the most important aspects of arbitration. Unlike court proceedings, arbitration would be confidential, such that the proceedings would be conducted in private. And award made by the relevant tribunal would not be published. In addition, given that some of the issues involved are complex and may require technical knowledge, arbitrators could be chosen among those who have the necessary specialist background and expertise to address such questions. Arbitrators with the requisite commercial experience could also be chosen; In contrast. in litigation before the local People's Court, the Judges may not be as familiar with such matters. Arbitration also has the advantage of providing procedural flexibility, such that the parties, together with the tribunal, are free to agree on a procedure that takes account of the nature of the dispute and of the parties' backgrounds. The flexibility of arbitration procedures could also lead to savings of both time and money. However, it is important to keep in mind that arbitration may not necessarily be cheaper than litigation. In practice. The time and cost involved often depend on the procedure adopted. The degree of cooperation between the parties and their counsel, the chosen arbitration institution, and the fees payable to the institution and the arbitrators. In general, the arbitration will be the most attractive option in most China-related disputes, but It is not always possible to use arbitration to resolve all the issues (i.e., working issues)


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