Spotlight on Edinburgh for this year’s International Arbitration conference - Ken MacDonald

This year features as an important one for legal professionals in the UK and further afield with Edinburgh hosting the largest international arbitration gathering in the world from September 18-21.

The International Council for Commercial Arbitration (ICCA), accredited as an Non Governmental Organisation (NGO) by the United Nations, is holding its bi-annual conference in the Scottish capital, a little over ten years after the installation of a modern regime for governing arbitrations in Scotland in the form of the Arbitration (Scotland) Act 2010.

Arbitration has been likened to private sector litigation. It is the referral by disputants, most often companies who have entered into a contract with one another, to an independent decision-maker who pronounces a legally-binding decision. Rather than using the traditional court model to resolve commercial disputes, organisations can determine their own procedure and choose their decision maker. This often leads to quicker resolutions.

Finding effective ways to resolve disputes, with their inevitable burden on management time, is a worthwhile goal for any business. Negotiation and mediation have their place as cost effective and quick means for overcoming differences but sometimes a formal, and enforceable, decision is required. That's where arbitration has a key role to play.

Ken MacDonald is a Partner with Brodies LLP and leads Brodies' international arbitration practice.

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Arbitration is often favoured because it is not tied to the courts of any jurisdiction; international arbitration is geographically flexible.

Businesses, wherever they are based, can agree on the place of arbitration and the governing law most suitable to them. This can break the deadlock in cross-border disputes, ensuring that both parties have confidence in a neutral venue and are not stuck with the national courts of the other.

International arbitration offers real flexibility and choice with organisations picking the decision-makers, the law, the venue and the rules of engagement, tailoring the dispute to parties' needs rather than accepting inflexible rules.

Crucially, arbitrations are confidential. They are conducted behind closed doors with sensitive commercial information not subject to public scrutiny. Also, unlike court judgements, the scope to challenge arbitral awards is limited. This offers the business community finality and certainty with the confidence that they can obtain a final binding decision that allows them to move forward in their endeavours without the risk of being tied up in appeal for years.

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Successful parties in arbitrations will also benefit from higher cost recoveries awarded to them than those achievable in litigation. With over 140 nations signed up to the 1958 New York Convention, it is easier to have your "win" recognised and enforced around the world.

Whilst litigation has an important role to play, not least in emergency applications to prevent a wrong (or the continuation of a wrong) from taking place, the benefits of international arbitration are clear. For Scotland the introduction of the Arbitration (Scotland) Act 2010 brought legislation into line with modern arbitration practices, strengthening its position as a place for businesses to come to resolve their disputes. This matters because an effective dispute resolution regime is critical for business confidence and investment in Scotland.

Promotion of arbitration in Scotland and international arbitrations being seated in Scotland is at the heart of the Scottish Arbitration Centre's mandate. There is an increasing tendency for arbitrations to be used by businesses, particularly in cross border disputes. That direction of travel will only increase following the spotlight that the International Council for Commercial Arbitration’s conference will provide in Edinburgh this year.

Ken MacDonald is a Partner with Brodies LLP and leads Brodies' international arbitration practice.

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