with arbitration), should be made by
arbitrators, not courts.
Thus, any business that signs an
arbitration agreement subject to the
Convention faces an uphill battle if it
later attempts to resist arbitration or
enforcement of an arbitral award.
While the basic principles of the
Convention are straightforward and
relatively easy to understand, there
are a number of pitfalls that arise if an
arbitration agreement is not carefully
considered and properly drafted. For
instance, here are a few of the mishaps we
have seen:
the law governing the arbitration.
The choice of law governs everything,
most importantly, the law under which
an arbitration agreement or award can
be challenged in court. When drafting
an arbitration agreement, we always
carefully match a company's business
objectives to the legal system most
harmonious with those objectives.
many different possible arbitration
procedures, and one size does not fit
all. Some procedures are simple, quick
and final. Others can be nearly as costly
and time-consuming as full-blown
litigation. Planning for the types of
disputes that might arise and the ideal
process for resolving them is a worthy
investment. By selecting the right
procedure, a company minimizes cost,
stress and the level of disruptive havoc
that business disputes can cause.
to the United States, that we have
over 50 different jurisdictions and
that each is different. It is critical
to consider which jurisdictions are
pertinent to the arbitration contract,
and which system is best suited to a
company's business needs. Moreover,
the language specifying the arbitration
forum has to be precisely drafted, or
it will not be respected by the courts.
We have seen many sophisticated
businesses get stuck for years in a
forum they don't want because they
agreement.
a powerful tool for controlling legal
risk. Parties bound by a contract
under the Convention can typically be
compelled to arbitrate and be confident
that any award can be converted into a
domestic judgment in the country where
enforcement is needed.
However, like any tool, effective use
of the Convention requires a skilled and
knowledgeable hand. The downside of its
simplicity is the need for deft navigation:
businesses including arbitration
agreements in their transnational
contracts need to have substantial
discussions with experienced counsel
to craft the right agreement for their
unique situation. Businesses already in
the midst of a dispute need counsel who
are knowledgeable as to the best way of
advancing their interests, or they may
waste resources fighting costly battles
they are likely to lose.