Introduction to Commercial Arbitration

Arbitration is one of Alternative Dispute Resolution methods which are able to use for replacing the traditional way of litigation in court. Considering with time consumption in the litigation process, this is the best way to resolve disputes. Hence, many of Commercial Disputes are nowadays resolving disputes using arbitration.

There are two ways of Arbitration.

  1. Ad Hoc Arbitration
  2. Institutional Arbitration.
1. Ad hoc Arbitration

    When parties of the agreement have not agreed to an arbitration process that we call ad hoc arbitration. There, no previously agreed institution, no agreed rules. So, the parties decide the rules and institution all when disputes arise.

2.Institutional Arbitration

    In the agreement, it’s clearly elaborated about the arbitration procedure. Applicable arbitration rules and institution are specifically said in the agreement. International Court of Arbitration ICC, Singapore International Arbitration Centre (SIAC), and Hong Kong International Arbitration Centre (HKIAC) are such arbitration centers in the world.

Party Autonomy.

This is the main principle in commercial arbitration. Parties of the dispute will decide the resolving procedure. So, parties have the power to decide where they go to resolve a dispute, who are the judges and what are the rules they have to follow the procedure.

 According to Redfern and Hunter,

“Party autonomy is the guiding principle in determining the procedure to be followed in an international commercial arbitration. It is a principle that has been endorsed not only in national laws but by international arbitral institutions and organizations. The legislative history of the Model Law shows that the principle was adopted without opposition…

Article 19(1) of the UNCITRAL Model Law (Model Law) :

 “Subject to the provisions of this Law, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings”.


Simply manner convention can define as accepted rules among members. convention says the way in which something is usually done. Regarding Arbitration, New York Convention is very important. It is followed to by more than 140 nations.New York Convention is the most successful treaty which helps to recognize and enforce foreign arbitral awards.

The two basic actions contemplated by the New York Convention are the recognition and enforcement of foreign arbitral awards. So, those who signed the convention have to obey the arbitral award given by another country. So, conventions help to have one jurisdiction among member countries regarding the subject matter. Unless it’s difficult to enforce an award in another country due to the reciprocity of the legal frameworks.

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