Advantages of the Arbitration Procedure
Arbitration as a form of alternative dispute resolution has the advantages that are currently lacking in the formal litigation in court, which makes it an increasingly preferred method among businesses. Moreover, arbitration is especially useful in international disputes for a number of reasons.
For one, it is the more economical way as far as time and money go.
The arbitration process is incomparably faster. The arbitrators are devoted to resolving the disputes in shortest time, plus the procedure is of one instance. The arbitration awards are final, subject to enforcement and are stable, because they are subject to recourse only by way of a court action. Legal basis for the enforcement of the awards abroad, even to a greater extent than the enforcement of the decisions of the courts of law abroad, is The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention.
The arbitration procedure is cheaper. In contrast to the filing fees in the state courts which in Bulgaria are permanently set at 4% of the claim cost, in the court of arbitration with the increasing claim costs this percentage decreases. What is more, the expenses for defence, experts, translators, etc., are paid only in one instance.
The arbitration procedure is confidential whereas the proceedings in the court of law are as a rule public. Thus through arbitration the parties are able to avoid deterioration of their relations.
International arbitration in particular eliminates the concerns that the prudent party may face in connection with filing a lawsuit in a foreign legal system. These are all reasonable concerns caused by unfamiliarity with the different jurisdiction, culture and language, travel inconveniences, arranging defense and the accompanying expenses.
As the parties voluntarily submit the dispute to a private juridical body which they trust, they furthermore participate in the composition of the arbitral tribunal by the nomination of the arbitrators. By retaining arbitrators with a special expertise which the court of law does not always have, the parties ensure for themselves a more competent settlement of disputes. Additionally, the dispute is settled by a simplified procedure notified in advance to both the parties. However, they are also entitled to amend and accommodate it to the characteristics of the dispute.
Last but not least, as the parties choose arbitration by virtue of their free will, hence the odds are they will keep their business relations good.