Arbitration is a legal process used to settle disputes whereby two or more parties agree in a contract in advance or in writing at the outset of a dispute to try to resolve their dispute not through the traditional court system, but before an adjudicative body independent of the state, an arbitral tribunal. These arbitration procedures are usually based on predetermined rules set by the industry, chambers, professional or other organisations.
What can be the advantages of arbitration? Speed and efficiency: traditional court proceedings can often be lengthy and take a long time to conclude a case. Arbitration is often much quicker, as the procedural rules are simpler and more flexible, and there are typically no legal remedies, with only exceptional and narrowly tailored cases for review of arbitral awards through the traditional court system.This single-stage, faster procedure can also have the advantage of reducing the time that businesses have to endure financial and business uncertainty in a dispute
Specialised expertise: parties often choose an arbitral tribunal whose members are experts in a particular field or industry, this ensures that the case is heard by people who are familiar with the field and the specific legal and professional issues involved.
Exclusion of the public:Arbitration proceedings usually arise in specialised business cases, where the information that can be obtained is often confidential and constitutes a trade secret. Businesses often prefer this procedure, as traditional court proceedings are essentially open to the public, with a closed hearing only being ordered by the presiding judge on specific request.
Cost-effectiveness: although in some cases the costs of arbitration are high, in general the lack of legal remedies means that in the longer term it may ultimately cost less time and money than traditional court proceedings.
Flexibility and customisation: arbitration gives the parties the possibility to design their own procedural rules and systems. This allows the procedure to be flexible and offer a solution tailored to the needs of the parties. International legal and business agreements: international legal matters and international business transactions often involve parties from different countries. Arbitration allows them to agree to settle the dispute in a third country or internationally, thus avoiding possible legal conflicts.
Enforceability: when an arbitral tribunal makes a decision on a case, that decision usually has the same legal force and enforceability as a traditional court decision. Dr. György Zalavári points out that the Bar Association also provides the possibility for the parties to hire lawyers instead of the court to conduct an ad hoc arbitration in disputes, and even provides appropriate procedural model rules for this purpose.
Dr. György Zalavári points out that the Bar Association also provides the possibility for the parties to hire lawyers instead of the court to conduct an ad hoc arbitration in disputes, and even provides appropriate procedural model rules for this purpose.
Accordingly, in case of dispute, the parties concerned can obtain an enforceable judgment by not using the court but by asking the lawyers acting as arbitrators. Arbitration is therefore a flexible and effective legal instrument that offers many advantages to the parties. However, it is important to understand that arbitration procedures have their own limitations and risks and that all circumstances must be taken into account according to the particular case and the parties' own needs.