ARBITRATION

Definition:

Alternative dispute resolution (ADR) : a way of resolving disputes without going to court. Most types of ADR use a neutral third person to help the parties come to agreement

Types of alternative dispute resolution

•      Negotiation, Mediation, Conciliation, Arbitration

               Negotiation:

o   Informal bargaining process

o   No third party

o   People in the dispute communicate directly to try to reach agreement

o   By written & spoken

o   Had to reach an agreement if all are “ a win-win situation”

               Mediation

o   Neutral person (mediator): negotiate with each other, identify issues, possible options, resolve dispute

o   Confidential

o   Face-to-face meeting by mediator

o   Used for individuals have clear conflicts with another

Conciliation

o   Impartial third party helps resolve the conflict

o   Confidential

o   Advise on what people's legal rights and responsibilities are and what a reasonable outcome might be

o   Used for conflict in the individual rights and responsibilities, e.g.: work cover, consumer disputes.

Arbitration

•         Arbitrators review the case & impose a decision

•         The decision is usually binding

•         Requires the agreement of the parties, usually via an arbitration clause in the contract

          ICC model clause:

       “All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules”

2 types of arbitration

üAd hoc: conducted independently & according to rules specified by the parties

üInstitutional: conducted by a major arbitration institution

          Main centers for international arbitration:

üParis                       

ü London

ü Geneva

ü Stockholm

          Main centers for international arbitration:

üNew York

üHong Kong

üSingapore

üVietnam:

üVietnam International Arbitration Centre

üat the Vietnam Chamber of Commerce and Industry

ü(the “VIAC”)

Advantages and disadvantages

a.     Advantages

•      Form of resolving

üHearings

üDocuments only through electronic means

•      Qualified arbitrators

üExpertise in the subject matter of dispute

üAppointed by two parties or an agreed institution

•      Arbitration place

üConvenience

üNeutrality = no  home adv.

•      Language of the proceedings

•         Applicable law and rules

üAvoiding unsuitable international trade terms

üAvoiding different levels of litigation

à save time & improve speed

•         Harmonization of Hybrid Procedural Patterns

üApplication of multicultural procedures

üPlayers from different legal systems

•         Confidentiality

üFundamental characteristic

üNo public hearings

üAn implied term

Disadvantages

a.     No right of appeal

b.     No right of discovery

c.      In case of a panel of arbitrators: high fees

d.     Inability to enforce temporary and immediate measures

à take steps to avoid enforcement

International Chamber of Commerce (ICC)

a.     Largest, most representative global business organization

b.     Found in 1919 by companies from all the world

c.      Members now: companies and associations in 130 countries in every industrial and service sectors

International Court of Arbitration

a.     International Chamber of Commerce (ICC)

b.     Aims: serve world business by

üpromote trade and investment

üopen market for goods and services

üset free flow of capital

üfight corruption and combat commercial

International Court of Arbitration

International Chamber of Commerce (ICC)

•      Highlighted functions: Promoting growth and prosperity

üSupport governments in Doha trade round

üProvide business recommendations to WTO, UN and other bodies

INTERNATIONAL TRADE

•      What is international trade?

International trade is exchange of capital, goods, and services across international borders or territories. It refers to exports of goods and services by a firm to a foreign-based buyer (importer)In most countries, it represents a significant share of gross domestic product (GDP).

What are benefits of international trade?

International trade is the exchange of services, goods, and capital among various countries and regions, without much hindrance.

oThe international trade accounts for a good part of a country’s gross domestic product.

oThe rise in the international trade is essential for the growth of globalization.

oEnhances the domestic competitiveness

oTakes advantage of international trade technology

oIncrease sales and profits

oExtend sales potential of the existing products

oMaintain cost competitiveness in your domestic market

oEnhance potential for expansion of your business

oGains a global market share

oReduce dependence on existing markets

oStabilize seasonal market fluctuations

oInternational trade has reduced inequalities and facilitated growth in economy of different countries. 

International trade terms:

Import

oImports are valued on the basis of free-on-board. Import of goods is a measure of the total value of the goods entering the domestic arena of any nation.

Export

o   Conversely, export is a measure of the value of the goods leaving the domestic arena of a nation. Export does not take into account the place, where the goods have been produced. They are usually estimated on the basis of “cost-including-freight”.

Ad Valorem: percentage of any tax, charge or duty that is imposed on the value of a commodity.

Anti dumping: Dumping, is referred to as a practice when a particular commodity is sold in the foreign market for a value, which is less than the fair value. Referring to the various laws, anti dumping is the reverse of dumping.

Balance of payments: refers to the statistical overview pertaining to international transactions. These Transaction are referred to as ownership transfer of any commodity, from the citizens of on nation to the citizens of another. The commodity should have an economic value in terms of money. 

oCommon External Tariff, CET or CXT: Is a common tariff, estimated on imports, which enter the union territory from nations, which do not fall within the purview of the union. It is abbreviated as CXT or CET. 

oCommon market: Exemplified by the European community, common market is one, which has external tariff, which is common. It also permits, mobility of labor and the same economic policies govern the member nations. 

oMarks of origin: these are the indication marks seen on products, which depict the country, where the product was manufactured. As per customs norms, it is obligatory for almost all countries to provide the marks of origin.

oRestriction of international trade non-tariffs:

The non tariff barriers may include norms, which govern technical standards and health standards, influencing costs. The non tariff restrictions are difficult to ascertain, hence they are more frequently treated quantitatively and are of wide range.

oRestriction of international trade non-tariffs:

oConstraints on export

oHealth regulations

oSanitary regulations

oEmbargoes

oLicensing

oMinimum price regulations.

oImport charges:

oRestriction of international trade pertaining to imports may be of the following types:

oInternal taxes

oTariffs

oVariable levies

oSpecial import duties

oIntervention of the government in trade:

oGovernment procurement

oCountervailing duties

oSubsidies in export

oTrading of stocks

oStandards:

oPackaging

oIndustry standards

oLabeling regulations

oMarking regulations

oProcedures followed in administrative and customs entry:

oDuties imposed for anti dumping

oCustoms valuation

oCustoms classification

oSample requirements

The restriction of international trade pertaining to environmental factors include the following:

oPollution as a result of processing plants

oUsage of polluting elements in production procedures

oWaste disposal

oHow much energy is utilized by processing plants

oJudicious consumption of energy