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Arbitration in the legal sense is part of the alternative conflict resolution. The arbitrator is the one who intervenes to take the decisions.


[edit] Definition

In France, arbitration (non official mode of disputes resolution) is a mode of conflict resolution through an Arbitration Court composed by one or more arbitrators (usually three). The arbitrator is a real judge whose decision binds the litigants. Therefore, arbitration enables to conclude a dispute (without going through the State Courts but through an arbitration jurisdiction) which is entrusted to one or more individuals selected by the parties.

[edit] Who can Benefit?

Any individual or any company living a dispute provided that the parties both agree to proceed to arbitration.

There are two modes of recourse to arbitration:

  • Either by an arbitration clause. It is a clause that foresees the recourse into arbitration. Therefore the recourse into arbitration can be foreseen in advance before any litigation.
  • Either by the outcome of an arbitration agreement, named compromise. A compromise is the exchange of promises between two or more people. This is the result of a negotiation between involved parties; each of them made concessions in order to reach a mutual solution that they both have to respect. A compromise is a convention between the parties. While the arbitration clause can be foreseen before a dispute appears, the compromise can be defined only after a dispute has emerged. The parties will agree to submit the dispute to the arbitrators.

However in the legal sense, someone can not compromise the rights which are not freely available. This can be often seen in family law cases such as divorce, parentage, etc...

Since the law of May 15, 2001, the arbitration clause is generally valid for all concluded contracts because of a professional activity, commercial or not.

Conflicts with relation to consumption (i.e. dispute with a merchant), statements of succession, conflicts between renters and owners, and some conflicts between employees and employers can be submitted to arbitration.

[edit] What is the advantage of this procedure?

The main advantage of arbitration is the facility to execute the condemnations in international context. Indeed most of the countries have ratified the New York Convention of 1958 which recognizes the same value for an arbitral condemnation than a national judgement.

The case is not judged by a Court but by one or more individuals called "arbitrators"; who are appointed by each of the parties.

In the case of parties which have given the powers of friendly composition, the arbitrators are allowed not to apply the legal rules usually applicable in the State Courts. However they must apply the principles of civil trial and respect public order. Moreover the friendly composition requires the arbitrators to act in fairness and they have to explicitly refer to fairness as the determinant element of their decision.

All arbitrators must be impartial and independent from the parties because they are involved in a judicial function, as would be the judges. Indeed, they pronounce a condemnation having a judicial character, equivalent to a judgement.

Almost anyone can become an arbitrator, but these are generally judicial experts or people whose occupation or experience provides them a certified skill in law.

This procedure of arbitration compared with ordinary recourses (legal proceedings) has several advantages: it's faster, more discreet and less costly.

[edit] The advantages of Arbitration: Myth or Reality?

  • Confidentiality is one of the main advantages of arbitration. It leads many businessmen and businesswomen to stipulate in contracts the recourse into arbitration. However, in case of proceedings to the State Court, confidentiality is reduced or cancelled.
  • Speed is a usual advantage of arbitration, although some arbitration procedures are sometimes as slow as a legal proceeding in the State Court, because of the numerous recourses.
  • The cost. In the court system, the parties do not pay the judges, while in arbitration the arbitrators are usually paid by the parties. Arbitrators usually have expensive fees but because the value of the involved dispute's issues is much bigger, cost is often not considered as a problem. Therefore, cost is often a non-problem.
  • The technical skills of the judicial arbitrators; in practice, many arbitrators are very qualified jurists. When the root of the conflict is judicial, they provide crucial skills. On the other hand, when the dispute must be resolved, the arbitrator must understand all the technical aspects (that is usual in business conflicts). Because these arbitrators often need to request experts for technical advices, we can wonder if their high fees are justified. The solution lies in an appropriate composition of the arbitral Court added with the necessary skills (which are forgotten too often).
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