1. Dr. Özlem Döğerlioğlu IŞIKSUNGUR Yaşar University Faculty of Economics andAdministrative Science International Trade Law – Lecture Notes 1

2. INTRODUCTION Disputes concerning the contract Litigation through the courts of a country Either one of the parties belong to OR The courts of neutral, third country Arbitration Private process seperate from national courts Arbitrator: the persons judging an arbitration process The number of the arbitrator is decided by the parties The arbitrators are selected and appointed by the parties

3. LITIGATION-ARBITRATION A. Process B. Initiation of proceeding C. Formal and flexible D. Selection of Arbitrators E. Qualifications F. Choice of venue G. Appeal H. Delay

4. DifferencesLitigationArbitration ProcessPublic (persons not involved in the process) Private process Initiation of proceedingsCan be started without an agreementArbitration agreement is necessary Process can be started by any of the parties to agreement Formal and InflexibleFormal and Inflexible legal process (ommission of the prescribed procedure may have fatal results Selection of Arbitrators/JudgesThe judges are appointed by the government of the country where the process held The parties themselves can appoint the arbitrators QualificationsQualifications of a judge decided by the State- doesn’t necessarly have the technical expertise needed in a commercial dispute Parties ar e free to decide the qualifications of an arbitrator Choice of venueThe disputes has to be settled in a courtPartieds are free to choose the venue of arbitration Appeal Delay The decision of the court is appealable More delays The decision of the arbitration is generally final and binding Much faster process

5. KINDS OF ARBITRATION It should be decided at the time of entering into arbitration agreement A. Ad hoc Arbitration B. Institutional Arbitration C. Fast Track Arbitration

6. KINDS OF ARBITRATION A. Ad hoc Arbitration 1. The rules and procedures are decided by the parties 2. It is necessary that the parties prescribe the rules of procedure for the conduct of the arbitration proceeding 3. Takes place in accordance with the rules of procedure prescribed by the parties in the arbitration agreement 4. Fail to prescribe the procedure, the procedure has to be decided by the arbitral tribunal ADVANTAGES: Flexible, being entirely depended on the wishes of the parties to dispute DISADVANTAGES: If any party adopts negative approach to the arbitration, the whole procedure can cause a considerable delay

7. KINDS OF ARBITRATION A. Institutional Arbitration 1. The parties use the rules and procedures of an existing international commercial arbitration institution Disadvantage: High Cost the rules of arbitration tend to be less flexible B. Fast Track Arbitration : Imposes time restrictions on both the parties and arbitrators. If a party fails to adhere to the time limits, he looses the right to present his case

8. THE MOST IMPORTANT INTERNATIONAL ARBITRATION INSTITUTIONS A. Permanent Court of Arbitration (PCA) B. United Nations Commission on International Trade Law (UNCITRAL) C. International Centre for Settlement of Investment Disputes (ICSID) D. The International Chamber of Commerce( ICC) E. National Institutions F. Specialized Arbitration Institutions 1. Arbitration and Mediation Centre (WIPO) 2. Centre for Effective Dispute Resolution

9. Importance of Arbitration in Commercial Disputes -International Arbitration: If the parties involved are from different countries If the venue or rules of the arbitration is another country than the parties If the place of the commercial relation is performed in another country than the country of the parties If the parties has expressly agreed so

10. ARBITRATION AGREEMENT Validity of an arbitration agreement: Has to look into the requirements of the domestic law of the respective parties

11. ARBITRATION AGREEMENT For an arbitration to take place there must be an arbitration agreement between the parties: Arbitration clause in a contract between parties. “ Dispute resolution Clause” or “Settlement of Dispute Clause” Seperate Arbitration Agreement

12. ESSENTIAL CONTENTS OF AN ARBITRATION AGREEMENT A. A Declaration to refer disputes or differences to arbitration B. Number of arbitrators C. Method of appointment of arbitrators D. Method of appointment of Presiding Arbitrator E. Qualifications of the Arbitrators F. Venue of arbitration G. Language of arbitration