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Arbitration Clause Essay

2230 words - 9 pages

The arbitration clause

This clause is related to the problem of the settlement of disputes arising from the non-performance or the improper performance of international trade contracts.
Generally, in all systems of law the courts of law have jurisdiction to settle these disputes, especially the court of law from the place where the headquarters of the defendant are situated. However, there are some exceptions provided by the procedural law of the states. Thus, for example, the court of law from the place where immovable goods are situated has exclusive jurisdiction to hear disputes concerning these goods.
The settlement of disputes by the courts of law has some disadvantages for the ...view middle of the document...

Arbitration in jure (by law) when the arbitrators settle the dispute by applying the provisions of the law;
2. Arbitration ex aequo et bono (by equity). It is used mainly in disputes concerning unnamed contracts and complex contracts, for which there is no specific regulation in the systems of law. Therefore, it is very difficult to determine their applicable law. Thus, the arbitrators settle the dispute by applying the general principles of law, such as the principle of good faith, the principle of equity and so on, for the purpose to ensure a fair trial and to provide a fair solution.
B. According to the permanence of the arbitral body, the arbitration may be divided in two categories, as follows:
1. Occasional or ad-hoc arbitration when the arbitral body is set up for a special dispute and it lasts only during the settlement of that dispute.
2. Permanent or institutionalized arbitration when the arbitration body is permanent, such as a court of arbitration having its own structure, organization and internal rules of functioning.
The permanent arbitration bodies may be classified according to two criteria, as follows:
A. According to their material jurisdiction (jurisdiction related to the subject-matter of the dispute) the arbitration bodies may be:
1. General arbitration bodies which may settle any kind of disputes, related to any category of international trade contracts. For example, the International Court of Arbitration of the International Chamber of Commerce from Paris; the International Court of Arbitration of the Romanian Chamber of Commerce and so on.
2. Special arbitration bodies which may settle only the disputes arising from specific categories of contracts. For example, the London Court of Arbitration which may settle disputes related to the carriage of goods by sea, the Bremen Court of Arbitration that settles disputes related to the commerce of cotton and so on.
B. According to its territorial jurisdiction, the arbitration bodies may be:
1. Universal arbitration bodies which may settle disputes between commercial partners belonging to any state in the world. For example, the International Court of Arbitration of the International Chamber of Commerce from Paris;
2. Regional arbitration bodies which may settle only the disputes between partners belonging to a specific area of the world – for example, the Asian arbitration from Kuala Lumpur.
3. Bilateral arbitration bodies that have jurisdiction to settle the disputes between parties belonging to two states – for example, American-Canadian Arbitration Commission, French-German Arbitration Chamber.
4. National arbitration bodies having international jurisdiction. Most arbitration bodies are included within this category. They are usually attached to national Chambers of Commerce. For example, the Royal Arbitration Institute from Stockholm, Berlin Arbitration Commission, Athens Arbitration Commission and the International Court of Arbitration of the Romanian Chamber of...

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