Meaning
Contractual provisions that require parties to resolve their disputes through a private tribunal rather than a national court provide a predictable legal framework for global trade. The international arbitration clauses specify the seat of the arbitration, the language of the proceedings, the applicable law and the number of arbitrators. This method is preferred in the electronics industry because it offers more confidentiality and expertise than traditional litigation.
Jurisdictional Choice
Selecting a neutral location and a specific set of rules ensures that neither party has a home court advantage. The international arbitration clauses often name a specific institution like the ICC, the LCIA, the HKAC or the SIAC to administer the case. This choice is definitive.
Award Finality
Decisions made by the tribunal are usually binding and cannot be appealed on the merits of the case. Because of the New York Convention the results of international arbitration clauses are easier to enforce across borders than the judgments of local courts. This finality reduces the long term legal costs and provides a clear resolution to the conflict.
Procedural Rule
Agreement on the process for evidence exchange and witness testimony allows the parties to tailor the proceedings to the complexity of the dispute. The international arbitration clauses give the arbitrators the power to appoint technical experts to help with the understanding of complex engineering data. This flexibility is a major advantage when dealing with intellectual property or manufacturing defects.
