11
March
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Arbitration and Litigation: Learn their Differences
in Legal Advice
If you haven’t had much experience when it comes to disputes, you might likely be confused by the differences between arbitration and litigation which are both methods in resolving issues. In most cases, lawyers fail to explain the differences between the methods of dispute resolution and the significance of choosing one over the other, unless you specifically ask them to do so.
In this blog, we will be talking about the differences of both dispute resolution methods.
The legal experts here at S & S lawyers understand the importance of informing our clients, a quick overview and a short guide on the differences between arbitration and litigation. However, this blog is not intended to replace seeking appropriate legal advice as there might be exceptions that exist depending on a particular situation and the uniqueness of the legal agreement.
What is Arbitration?
Arbitration is a procedure in which a dispute is submitted, by agreement of the parties involved, to one or more arbitrators who make a binding decision on the dispute. And when parties choose arbitration, the parties opt for a private dispute resolution procedure instead of going to court.
Take note that Arbitration is consensual and can only take place when both parties agree to it. It is neutral and is a confidential procedure with the WIPO rules being applied to protect the confidentiality of the existence of the arbitration. Now, parties must also ensure that they include an arbitration clause in their contracts or agree to arbitration after a dispute arises, specifying the rules, procedures, and arbitral institution governing the process.
What is litigation?
Litigation is considered as the standard dispute resolution method. It is a formal process during which legal disputes are resolved. Individuals use this method to use the civil court system to address a wide variety of issues ranging from personal injury claims to divorces to disputes surrounding a breach contract.
It remains a common and traditional approach to resolving disputes in the UAE with a judicial system consisting of federal and local courts. The UAE courts are organized into three levels: Courts of First Instance, Courts of Appeal, and Courts of Cassation.
Selecting the Right Dispute Resolution
Choosing the most appropriate dispute resolution mechanism depends on several factors such as the parties involved, costs, time, desired outcome and the nature of the dispute.
One distinct difference between arbitration and litigation is that the parties involved in a dispute do not have a significant influence over litigation compared to arbitration, as it is possible for them to choose their arbitrator(s). Usually arbitration is being handled by a tribunal of one or three arbitrators and the parties to an agreement may decide on this therein. And to assure neutrality, when parties choose only one arbitrator to solve the issues, the arbitrator will be chosen and appointed by the arbitration centers but parties may object on the identity of the appointed arbitrator.
Both litigation and arbitration costs are proportional to the value of the claim but arbitration costs are most of the time higher than the litigation because of its exclusivity. So when choosing between litigation and arbitration, it is best to consider the value of the agreement before proceeding with any kind of dispute resolution.
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