Developments on Courts’ Involvement in Arbitration. Volume 2: Courts and Law
Georgios I. Zekos, Ph.D.
Aristotle University, Democritus University, University of Hull, University of Peloponnese, TEI of Central Macedonia, Serres, Greece
Series: Business Issues, Competition and Entrepreneurship
Arbitration is one form of alternative dispute resolution (ADR). It must be taken into account that ADR was envisioned as an alternative to litigation, with its own manifest of substantive and procedural characteristics. To that extent, arbitration enhances access to justice by permitting claimants to bring claims they could not afford to bring to court. International commercial arbitration is a legally binding dispute resolution process that substitutes for domestic courts. Arbitration began as an extrajudicial mechanism for resolving disputes. Arbitration “took its rise in the very infancy of Society” as a private and self-contained method, distinctive from litigation and not as a postscript to the development of public courts.
Has this fact been shared by state legislation and modern arbitration practice or has arbitration been developed into an appendage of the courts? Merchants established arbitration tribunals because they felt that the courts were not sufficiently knowledgeable about commercial customs and were exceptionally slow and unwieldy. National arbitration, international commercial arbitration, and investor-state arbitration have developed on parallel but separate tracks, each reacting to different political, economic, and social settings. Although arbitration is a quasi-judicial proceeding, it is not conducted with the same degree of formality as a judicial proceeding within the United States which means that the spirit of arbitration is the parties’ freedom from the strict structure of ordinary judicial proceedings. Arbitration has to guarantee legal certainty, predictability, and settlement being costless.
The emergence of many non-independent arbitral tribunals creates a Gordian knot by merely adding more work for courts in order to deal with so many requests for intervention in arbitrations. The current perplexing between arbitration and courts causes only confusion, profit chances for many people and less quick and cheap justice. In addition, arbitration is judicialized dependent more and more from court rulings; this causes it to lose its advantages and become more and more costly. Because of this, its validity is questionable and it might be more productive to establish more courts to employ more judges rather than struggling with arbitration as it currently functions. Taking into account that private parties are performing an escalating number of tasks that were once accomplished by the government, privatization has become so prevalent and involves “delegation” of state authority to private parties. This can be seen as a legal basis for the independence of arbitration under National Authority Management Arbitration (NAMA).