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Rapid Response Team: 0800 559 3500
Switchboard: +44 (0)203 947 1539
Rapid Response Team: 0800 559 3500
Switchboard: +44 (0)203 947 1539

International Arbitration - An In-depth Guide

International arbitration is an alternative means of dispute resolution (ADR). Rather than referring the dispute to the national courts, the parties agree that a tribunal of one or more independent and impartial arbitrators will adjudicate.

What is international arbitration? 

International arbitration is an alternative means of dispute resolution (ADR). Rather than referring the dispute to the national courts, the parties agree that a tribunal of one or more independent and impartial arbitrators will adjudicate.

What is international arbitration used for?

International arbitration is often the preferred method of resolving cross-border commercial disputes. In fact, an overwhelming majority of 90% of respondents surveyed in the Queen Mary’s International Arbitration Survey, recognised international arbitration as their preferred forum for cross-border disputes.

One of the reasons for this is that it is a neutral mechanism for parties in different countries. The parties can choose a neutral ‘seat’ (or place) in which to hold the arbitration, so that neither party is on the back foot from the other’s home advantage.

But international arbitration isn’t limited to cross-border disputes. It’s a forum which attracts disputes in specialist areas of law, such as:

  • Crypto and digital assets.
  • Joint venture and shareholder disputes.
  • Marine and international trade.
  • Rail.
  • Construction.

The Arbitration Process

Parties must first agree to arbitrate, and the arbitration agreement is usually contained within a clause in their contract. Depending on the detail included in the arbitration clause, the parties will need to agree finer details such as:

  • How many arbitrators comprise the tribunal.
  • How arbitrators will be selected.
  • Where the arbitration will take place.
  • Which institutional rules will govern the arbitration.

The Stages of Arbitration

Institutional rules will dictate the process of the arbitration, but the usual stages include:

  1. Request for Arbitration: The claimant sends the request to the other side in order to begin the process.
  2. Appointing Arbitrator(s): Either the parties agree on the sole arbitrator, or each side appoints an arbitrator of their choosing. The way in which the arbitrator’s appointment is decided will be included in the arbitration agreement.
  3. Conduct: The tribunal will usually prepare a procedural order to govern the conduct of the arbitration. This is effectively a timeline for the submission of pleadings, witness evidence (if any), expert evidence (if any) and the disclosure of documents. The parties have a say in the conduct and provide their input into the procedural order before it is finalised.
  4. Hearing: At the hearing, counsel for each of the parties delivers oral submissions to the tribunal. The parties (through their counsel) have the opportunity to question witnesses and experts.
  5. Award: Once the hearing has taken place, the tribunal will withdraw to consider the decision. The tribunal issues a written award which is a binding decision to resolve the dispute.
  6. Appeal: There are limited rights of appeal in an arbitration process. A party can appeal a decision if it thinks that (i) the tribunal erred in law (ii) the tribunal did not conduct itself properly (iii) the tribunal has answered questions it should not have answered.

At any point in the process, the parties can attempt settlement through meetings, discussions and formal mediation.

Common Issues in Arbitration

Arbitration is distinct from litigation, and there are issues that arise in arbitration that are particular to the process.

Defective Arbitration Clauses

There must be an agreement between the parties to refer a dispute to arbitration. Usually this comes in the form of an arbitration clause in the contract.

But if the arbitration clause is defective, the agreement is not certain, and one party may seek to begin action in their own national court instead.

An arbitration clause is defective if it is uncertain, or inoperable. For example:

  • An arbitration agreement which prohibits disputes being referred to litigation in national courts, but does not expressly say that arbitration is the preferred forum.
  • An arbitration agreement that mistakenly refers to an arbitral institution that does not exist.
  • The parties have failed to comply with an agreed time limit.
  • The contract no longer has legal validity due to mistake, duress, or fraud.

Multi-party Arbitrations

In litigation, third parties can be joined to the dispute. But in arbitration, it is difficult to join third parties involved in the dispute, as they are unlikely to be bound by the arbitration agreement between the two primary parties.

It is possible to join a third party, if that third party consents to it. Understandably, most third parties will withhold their agreement.

Instead, the parties will usually seek concurrent hearings. A separate arbitration is commenced against the third party, but the same arbitrator(s) are appointed.

Anti-suit Injunctions

Occasionally, a party will ignore the arbitration agreement and begin proceedings in their own national court instead.

In those circumstances, the other party can suspend the litigation by applying for an anti-suit injunction from the national court of the seat of arbitration. If successful, the party who started proceedings in the foreign court will be ordered to (i) cease to pursue the litigation (ii) withhold advancing certain claims in the litigation (iii) take steps to terminate or suspend the litigation.

Instead, they will have to participate in arbitration, and honour the prior agreement of the parties to refer disputes to arbitration.

Anti-suit injunctions are generally available in common law jurisdictions, but are not available in every jurisdiction. For example, the French courts do not grant anti-suit injunctions, but the English courts do have the power to grant them.

Challenges to Jurisdiction

An aggrieved party to the arbitration may seek to argue that the arbitration agreement is invalid, or that the tribunal has exceeded its mandate.

Such challenges to jurisdiction can be dealt with by the arbitral tribunal. It is competent to rule on its own jurisdiction. But a party can appeal that decision.
In England and Wales, Section 67 of the Arbitration Act 1996 allows a party to apply to court to challenge any award of the arbitral tribunal as to its substantive jurisdiction.

The courts of England and Wales have the power to (i) confirm the arbitrator’s award, (ii) vary the award, or (iii) set aside the award.

An aggrieved party must act quickly. They have 28 days from the date of the award in which to bring the application in court. If there has been an arbitral process of appeal or review, the time limit is within 28 days of the date when the applicant was notified of the result of the process.

Assistance from National Courts for Interim Measures

The tribunal’s interim powers are not as extensive as the court’s. These are a few situations in which a party seeking interim relief will need to refer to a national court:

  • Preserving Evidence Urgently: National courts can hear urgent applications quickly and on an ex parte basis. For example, if an urgent freezing injunction is required, section 44 of the Arbitration Act 1996 allows the court to make any order it thinks necessary to preserve evidence or assets.
  • Third Parties: An arbitral tribunal has no power over third parties, which are not party to the arbitration agreement. Courts can compel a witness to give their evidence, produce documents, or attend a hearing.
  • Enforcement: National courts have punitive sanctions for failure to comply with an order. A defaulting party can be imprisoned for contempt of court. The arbitral tribunal does not have the same power of enforcement. The English Arbitration Act 1996 provides a mechanism for English courts to enforce interim orders made by English-seated arbitral tribunals.

Urgent Arbitrations

In urgent situations, the parties may require orders or relief before the tribunal is constituted. In those situations, most of the institutional arbitral rules provide a mechanism for the appointment of an Emergency Arbitrator (a temporary sole arbitrator).

The Emergency Arbitrator addresses urgent applications and does not remain to determine the merits of the underlying dispute. Some institutional rules allow the Emergency Arbitrator the power to order ex parte relief (i.e. a hearing at which the other side is not present) subject to the other party being heard immediately after the preliminary order is granted.

Once the Emergency Arbitrator is appointed, he/she must make a decision on the claim for relief as soon as possible. Some rules (such as the LCIA) give a deadline of 14 days from the appointment. The Emergency Arbitrator is not required to hold any hearings, and can decide the claim on a documents-only basis.

Where does international arbitration take place?

International arbitration takes place in the city or ‘seat’ that the parties have agreed. It is generally a neutral location for the parties. Popular seats include Paris, Hong Kong and Singapore.

However, London is one of the most in-demand seats for arbitration, partly because of its reputation for being effective and efficient.

But there are technical advantages in parties choosing London as their seat of arbitration. Now that the UK has left the European Union, it is able to grant anti-suit injunctions restraining proceedings commenced in other EU states (which were started in breach of an arbitration agreement).

The London Court of International Arbitration (LCIA) continues to be one of the world’s leading arbitral institutions for commercial dispute resolution. It is a preferred institution for arbitration parties based outside the UK, with over 80% of parties in pending LCIA cases being non-English.

What is the cost of international arbitration?

There’s a common misconception that arbitration is cheaper than litigation. In reality, costs are often similar, and arbitration can in some cases end up more expensive than litigation. The parties incur the following fees:

  • the administrative fees of the arbitral tribunal.
  • fees of the arbitrator(s).
  • legal fees.
  • expert fees (if required).
  • Hearing fees such as room hire, transcription services, interpreters.

The reason that arbitration can result in fewer costs is that the parties have autonomy to manage the proceedings to save costs. For instance, parties can opt for truncated proceedings in simple disputes that will result in the dispute being resolved quicker and parties having to incur less in legal and arbitration fees.

However, that requires a level of agreement between the parties, which can be difficult to achieve in contentious situations.

Which party pays which costs is decided at the end of the arbitration, and largely falls within the discretion of the tribunal. In some cases, the tribunal will order that costs are recovered from the losing party (either partially or entirely). In others, the tribunal may decide that costs “lie where they fall” and each party is responsible for paying its own costs, regardless of the outcome of the arbitration.

If parties have the option to choose between arbitration and litigation, then the decision should not be based on cost. It should be a decision on privacy, neutrality, and whether you need a specialist arbitrator.

International Arbitration Institutions and Rules

An arbitration will either be an ad hoc arbitration or an institutional arbitration. Ad hoc arbitrations are not governed by a particular institution or administer. Institutional arbitrations follow the procedural rules and guidance of a particular arbitral institution.

Institutional arbitrations also have the option for ‘fast-track’ or ‘expedited’ arbitration. The procedural rules for a fast-track arbitration steer the dispute to come to an end more swiftly.

There are various different rules that parties can submit to in international arbitration. Parties can choose which rules govern their dispute. Some rules are designed for particular industries, whereas others are designed for maximum flexibility or efficiency. Popular arbitration institutions are:


International Chamber of Commerce (ICC) Unrestricted. General global business
London Court of International Arbitration (LCIA) Unrestricted. General global business
International Centre for Dispute Resolution (ICDR), the international division of the American Arbitration Association (AAA) Aerospace, aviation, security-related disputes (including cyber), life sciences, data privacy
Hong Kong International Arbitration Centre (HKIAC) Complex transactions. Specialism in domain name disputes
Singapore International Arbitration Centre (SIAC) Unrestricted. General global business
World Bank’s International Centre for Settlement of Investment Disputes (ICSID) Investment disputes
United Nations Commission on International Trade Law (UNCITRAL) Investment disputes
Stockholm Chamber of Commerce (SCC) Russian businesses
London Maritime Arbitrators Association (LMAA) Shipping and international trade
Grain and Feed Trade Association (GAFTA) International trade


Is an arbitral award legally binding?

Arbitration awards are legally binding on the parties. Due to the voluntary nature of arbitration, an arbitral tribunal can only validly resolve disputes that the parties have agreed that it should resolve. If the tribunal rules on matters outside of its mandate, then the award may be null and void.

In England and Wales, Section 67 of the Arbitration Act 1996 allows a party to apply to the High Court to challenge any award of the arbitral tribunal, on the grounds of its substantive jurisdiction. The court can make an order declaring that the arbitral award made by the tribunal has no effect (in whole or in part) because the tribunal did not have substantive jurisdiction.

However, the parties cannot bring the same cause of action to the court, simply because they were aggrieved by the outcome of the arbitration. The court would dismiss the action on the ground that the issues were already decided. In legal terms, the issues would be ‘res judicata’.

Res judicata refers to the principle that any facts, legal rights or obligations specifically put in issue and already determined by a court or tribunal of competent jurisdiction cannot later be relitigated between the same parties.

The International Commercial Arbitration Committee of the International Law Association (ILA) endorsed a basic application of res judicata based on the ‘triple identity’ test. The matter will be res judicata if the dispute involves (i) the same parties, (ii) the same subject matter, and (iii) the same claim for relief.

Recommendation 3 of Part II of the ILA Recommendation provides that an arbitral award has conclusive and preclusive effects in further arbitral proceedings if:

  • It has become final and binding in the country of origin and there is no impediment to recognition in the country of the place of subsequent arbitration.
  • It has decided on or disposed of a claim for relief which is sought or is being reargued in the further arbitration proceedings.
  • It is based upon a cause of action which is invoked in the further arbitration proceedings, or which forms the basis for the subsequent arbitration proceedings.
  • It has been rendered between the same parties.

How are international arbitration awards enforced?

Enforcement of international arbitration awards is generally more straightforward than enforcing a traditional court judgment. That’s because over 168 countries in the world have signed the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). With so many countries ratifying the New York Convention, arbitration awards can be enforced in all major countries in the world.

Arbitral awards are usually complied with without the need for enforcement proceedings. But in rare cases where enforcement proceedings are required, the winning party will begin by tracing the assets of the losing party. The winning party will apply to enforce the award in the national court in the jurisdiction in which the assets are located.

There are some unusual circumstances which give grounds for refusing to recognise and enforce an arbitral award. These include:

  • The arbitration agreement was not valid under the law to which the parties have subjected it to.
  • The party against whom the award is invoked was.
    • not given proper notice of the appointment of the arbitrator.
    • not given proper notice of the arbitration proceedings.
    • otherwise unable to present their case.
  • The arbitrator exceeded his/her mandate.
  • The tribunal was not constituted in line with the arbitration agreement between the parties.
  • The arbitral procedure was not carried out in accordance with the arbitration agreement of the parties.
  • The award has been set aside or suspended by a competent authority of the country in which/under the law of which the award was made.
  • The subject matter of the dispute was not capable of settlement by arbitration under the law of that country.
  • Recognition/enforcement of the award would be contrary to the public policy of that country.

Why choose arbitration rather than litigation?

When disputes arise, it’s not always possible to choose arbitration rather than litigation. The decision will be governed by the terms of the contract. Where both parties would prefer to refer their dispute to arbitration, then they can sign a submission agreement to arbitrate, even if the contract envisages litigation.

Many cross-border contracts, and contracts for international trade will include an agreement to arbitrate as a matter of course.


Arbitration vs Adjudication

Adjudication is a fast method of dispute resolution used in the construction industry. Parties receive a binding decision within 28 days of submission of the claim, but the decision is only temporary until the dispute is determined by litigation or agreement.

Arbitration is a formal process of dispute resolution, available in any industry. The process is lengthier and more suitable for complex disputes. At the end of the process, the parties receive a final and binding decision from the arbitrator.


Arbitration vs Mediation

Mediation is a method of settling disputes. Arbitration is a process to resolve disputes with a final and binding decision from an arbitrator.

Mediation is guided by an external mediator, who helps the parties find an acceptable settlement for both parties. It typically lasts a day. The mediator does not decide the dispute for the parties, and if agreement is reached, it is only binding once the settlement agreement is signed.

Arbitration is an alternative means of dispute resolution. After a hearing, the arbitrator decides the dispute for the parties, in a final and binding award. The arbitration process is similar to a court process, and can take months from beginning to end. The stages of arbitration include pleadings, disclosure, witness evidence, expert evidence and a final hearing.


Advantages of Arbitration


In cross-border litigation, one party has the ‘home advantage’. They are familiar with the procedures and technicalities of the local courts, which are often complex and opaque to outsiders. International arbitration ensures a level playing field for disputes for parties from different jurisdictions.


Judicial decisions are available publicly. This publicity can lead to consequences that some organisations want to avoid. The first is the reputational risk of a possible adverse judgment against the business. The second is the risk of creating binding precedents. If a party faces a claim that could ‘open the floodgates’ to similar litigation, then they avoid that risk by keeping the dispute private in an arbitration setting.

Choice of Arbitrators

In the court system, High Court cases are assigned to a judge, or a master. The parties do not get a choice in which particular judge or master deals with their dispute. However, the parties have a say in which arbitrator hears their dispute. They either agree a sole arbitrator with the other side, or each party appoints an arbitrator of their choice.

The freedom to choose the arbitrator is particularly helpful in specialist industries like shipping, cryptocurrency and investments, in which the language and ideas are nuanced and complex. Appointing an arbitrator with experience in the sector means that they are more likely to understand the intricacies of the dispute.


Litigation in England and Wales is governed by requirements of the Civil Procedure Rules, which determine strict deadlines and precise procedural steps to follow. Arbitration on the other hand affords the parties a degree of flexibility. Parties can agree extensions where they need to, without the threat of sanctions or adverse consequences. They can set their own procedural rules (to some extent) and agree where the hearing will be conducted.


Arbitration results in a binding decision that is easily enforced worldwide. This is an important factor in cases in which parties’ assets span several jurisdictions. It is generally easier to obtain recognition and enforcement of an arbitral award than a foreign court judgment, due to the network of international and regional treaties that provide for the recognition and enforcement of arbitral awards.


Many institutions have expedited rules to save time and costs. The ICC Dispute Resolution Statistics 2020 reported that 67% of final awards rendered under the Expedited procedure Provisions were delivered on or around the six-month time limit.



International arbitration is an alternative to litigation for resolving disputes. It is particularly useful in cross-border disputes. However, it is not always possible to simply decide to refer a dispute to arbitration. The decision should be one that is considered when the contract is negotiated so that the parties have an agreed arbitration clause in the contract.

Certain industries prefer arbitration to litigation, including international trade and financial services. The reason for that is partly the complexity and international nature of the disputes. Arbitration affords the parties neutrality in the place of the hearing, and the parties can choose arbitrators that have experience in their industry. But often there is a reputational consideration as well. Arbitration is a private forum, and decisions will not be made public in the same way as court decisions are.

Why Rahman Ravelli

At Rahman Ravelli, we have extensive experience in international arbitration, and resolving disputes quickly and efficiently on an urgent basis. If you would like to talk to us about an impending arbitration, or whether to update your contracts to include arbitration clauses, please get in touch with one of our expert arbitration lawyers.

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Syedur Rahman


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Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, international arbitration, civil recovery, cryptocurrency and high-stakes commercial disputes.

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