Arbitration

Arbitration is an important method of resolving disputes in international trade. It refers to the voluntary submission of a dispute by both buyer and seller to an arbitration institution agreed upon by both parties, which makes a ruling according to arbitration rules. The award is usually final and binding on both parties. Usage scenarios: When disputes arise during contract performance regarding quality, quantity, payment, delivery, etc., and negotiation fails, arbitration may be applied for based on the arbitration clause in the contract or an arbitration agreement reached afterward. Precautions: The arbitration agreement should clearly specify the arbitration institution, place of arbitration, arbitration rules, language of arbitration, etc.; recognition and enforcement of arbitral awards may be based on the New York Convention; the difference between arbitration and litigation is that arbitration is final after one award, flexible in procedure, and highly confidential, while litigation has two instances with final appeal, public hearings; the difference from mediation is that mediation has no compulsory force, while arbitration has enforceable force. Foreign trade practitioners should stipulate clear arbitration clauses in contracts to reduce the cost of dispute resolution.