ARBITRATION

Why arbitrate?

International arbitration has become the established method of determining international commercial disputes. The reasons why arbitration has been established as a preferred method of binding resolution of commercial disputes include:

  1. In arbitration the parties are entitled to appoint an arbitrator to solve their dispute. Accordingly, parties may find a person who in addition being trusted by the parties is also specialized in particular field of the dispute. In addition, parties may design the process, rules and other details of arbitration procedures.
  2. Usually foreign parties prefer not to solve their disputes at the courts of the opposite party. In this regard, arbitration may provide the parties with a neutral seat, which is different from the parties’ states.
  3. Unlike court litigation, arbitrators decide a case in a one-instance proceeding. Unless there are serious procedural violations, parties may not prolong proceedings by challenging arbitral awards before higher instance institutions.
  4. Due to availability of numerous international treaties, arbitral awards are recognized in more countries as opposed to court decisions. A party may demand recognition and enforcement of an arbitral award in approximately 150 countries.
  5. Unlike many court litigations, arbitration proceedings are usually confidential. Such confidentiality in addition to protecting sensitive information also keeps confidential that there has been any dispute between the parties and allows further development of relationship between the parties.
To allow our clients such opportunity to benefit from advantages of arbitration our company renders arbitration services under UNCITRAL Arbitration Rules. If you meet any of the following criteria, you can use our arbitration services:

(i) the parties to an arbitration agreement have, at the time of the conclusion of that agreement, their places of business in different States; or

(ii) the parties have their places of business  in a state other than the Republic of Azerbaijan; or

(iii) any place where a substantial part of the obligations of the commercial relationship is to be performed or the place with which the subject-matter of the dispute is most closely connected.

We would recommend using the following wording in your contracts in order to avoid in advance the potential disagreements concerning choice of arbitration as a dispute resolution method under the contracts:

“Any dispute, controversy or claim arising out of or relating to this contract, or the breach, termination or invalidity thereof, shall be settled by arbitration in Baku, Azerbaijan in accordance with the UNCITRAL Arbitration Rules. The appointing authority shall be “ARBME” LLC (TIN: 1304846341), a company registered in the Republic of Azerbaijan.”

Our company renders unpaid consulting services concerning drafting of arbitration clauses and agreements. In case you have any questions or need clarifications concerning any of the above issues, you can contact us at info@arbme.org . 

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