Commercial contracts in the energy, oil and gas, and infrastructure sectors are characterized by massive capital investments and complex technical and legal obligations. In light of this complexity, "Commercial Arbitration" has emerged as the premier alternative dispute resolution method, favored by major international companies over traditional litigation.
Why Do Companies Prefer Resorting to Arbitration?
Strict Confidentiality: Unlike public court trials, arbitration procedures guarantee the confidentiality of the disputes, as well as the sensitive financial and technical information of the companies involved.
Specialized Expertise: Arbitration grants the parties the freedom to choose arbitrators who possess specific technical and legal expertise in the sector of the dispute (such as the oil industry or FIDIC engineering contracting).
Speed of Adjudication: Arbitration procedures are characterized by greater flexibility and speed compared to the multiple tiers of litigation in national courts.
Drafting the Arbitration Clause and Ensuring Its Enforcement The effectiveness of arbitration begins with precise drafting in the original contract. This requires the consideration of fundamental conditions, including:
Accurately determining the applicable law and the seat of arbitration: To avoid any conflicts of jurisdiction.
Choosing a globally recognized arbitral institution: Such as the International Chamber of Commerce (ICC) or accredited regional arbitration centers.
Considering the mechanisms for enforcing awards: Relying on international treaties, such as the "1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards," which facilitates granting the award executory force across various countries.
