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The International Data Insights Report: Trends in international arbitration
Mark Fallmann
We provide advice and support at all stages of the arbitration process including:
We also advise on related court matters such as jurisdiction challenges, freezing injunctions, anti-suit injunctions and other interim and urgent measures.
Our practice head, James Glaysher, also sits as an arbitrator, having received institutional appointments to act as sole arbitrator, tribunal chair and co-arbitrator. He draws on this experience of the other side of the hearing room when representing our clients’ interests.
Our international arbitration team and dispute resolution specialists are supported by lawyers in our corporate, commercial, criminal litigation, employment, immigration and real estate teams, to provide clients with a truly multi-disciplinary service.
In today’s interconnected global economy, international arbitration fulfils a crucial role.
It provides commercial entities with a confidential dispute forum and judgments (awards) that can be enforced across the globe by virtue of the New York Convention - an international treaty with over 165 signatories which obliges national courts to enforce awards from other signatory countries without substantial interference.
Global businesses across a wide range of industries often favour international arbitration because of the ability to select:
Arbitration is a private procedure by which parties to a commercial dispute agree to have a neutral third party (typically one or three arbitrators) hear their case and make a binding decision. It is an alternative to court litigation in which the parties agree to use an arbitrator or arbitration tribunal instead of national courts.
The expansion of global trade and cross-border investment has led to increasingly complex commercial relationships, and when disputes inevitably arise, international arbitration is often the preferred method of resolution. It offers several key advantages, including the enforceability of arbitral awards under the 1958 New York Convention—ratified by 172 states—which provides a level of global recognition unmatched by court judgments.
Arbitration also offers neutrality, an essential feature when parties are from different jurisdictions, as it avoids perceived or actual bias in domestic courts. Its procedural flexibility allows parties to tailor the process to their specific needs, while the ability to appoint arbitrators with relevant expertise ensures decisions are informed and contextually grounded.
Privacy is another benefit, as proceedings are typically confidential. Historically rooted and widely embraced in sectors such as construction, shipping, and insurance, arbitration has evolved into the primary mechanism for resolving complex international disputes. That said, it is not without drawbacks: arbitrators have more limited coercive powers than courts, and summary dismissal of unmeritorious claims is less common—though this is improving.
Ultimately, careful drafting of arbitration clauses at the outset is crucial, as tribunals derive their jurisdiction from party agreement, not inherent authority. Arbitration, while not suitable for every scenario, continues to gain global prominence due to its adaptability, neutrality, and enforceability.
Courts generally uphold arbitration clauses as a valid method of dispute resolution. For an arbitration agreement to be enforceable, it usually must be in writing, though it does not always require signatures from all parties. Additionally, under the separability principle, the arbitration agreement remains valid and enforceable independently, even if the main contract is void or voidable, unless otherwise agreed by the parties. Arbitration agreements can be entered into separately, after the main underlying contract has been executed (albeit typically they will be incorporated within the underlying agreement).
Concerns regarding costs is rightly often at the forefront of parties’ minds when commencing or defending a claim.
Arbitration proceedings usually involves higher upfront costs than court litigation due to having to pay the tribunal’s costs (i.e. the costs of the arbitrator(s)) as a prerequisite for commencing the claim, and these costs can be significant (in comparison, the maximum fee for issuing a claim in the High Court is £10,000 whereas the costs of arbitrator(s) can easily exceed this).
That being said, arbitration proceedings can be cheaper than litigation due to its procedural flexibility, allowing directions to be tailored to the requirements of the dispute and the preferences of the parties. It is usually faster to list hearings in arbitration compared to the litigation where the courts are inundated and experience delays. The onerous disclosure exercise in court proceedings may be slimmed down in arbitration so that fewer documents are needed to be disclosed which can save significant time and costs.
Legal costs are generally recoverable in arbitration proceedings, which is the same as in English litigation, however compared to other non-UK jurisdictions where legal costs are not recoverable or recoverable to the same degree as in England & Wales, the recoverability of legal costs in arbitration is a tangible benefit that makes arbitration more cost-effective than court proceedings.
Parties to arbitration proceedings are permitted to appeal an arbitral award in very limited circumstances.
Pursuant to section 69 of the Arbitration Act 1996 (the “Act”), a party to an arbitration seated in England may appeal to the English Court “on a question of law arising out of an award made in the proceedings”. An appeal can only be brought with the English Court’s permission, or the agreement of all the other arbitral parties. However, note that typically parties will exclude the right to appeal specifically on this ground (whether expressly in their arbitration agreement or by adopting arbitral rules that waive the right to any form of appeal).
The English Court will only grant permission to appeal on this ground if it is satisfied in respect of the following:
Parties are also permitted, again on limited grounds, to apply to the English Court to challenge an arbitral award:
Section 67 of the Act provides a ground for challenge on the basis that the arbitral tribunal lacked “substantive jurisdiction”.
Section 68 of the Act provides for a challenge on the basis of “serious irregularity” affecting the arbitral tribunal, the arbitration proceedings, or the award.
Parties wishing to appeal or challenge an arbitral award must typically do so within 28 days of the date of the award (in accordance with section 70(3) of the Act). Accordingly, legal advice should be obtained as soon as possible following receipt of the award. Please do not hesitate to contact a member of our International Arbitration team.
Investor-State Arbitration (ISA) is a legal process that allows investors to bring claims directly against a state if they believe their investment has been treated unfairly by that state. This includes expropriation (where a government takes over assets without fair compensation), discriminatory treatment, or sudden regulatory changes that harm the investment.
These disputes are usually resolved through international arbitration, rather than local courts, pursuant to dispute clauses contained within a global network of instruments comprising bilateral and multilateral investment treaties or free trade agreements. This gives investors a neutral and enforceable way to pursue claims against states. The investor will be able to commence a claim against the state if the investor’s home state (typically determined by the country of incorporation if the investor is a company) and the host state of the investment are co-signatories to the same treaty and where that treaty explicitly protects against unfair treatment.
These arbitrations are governed by rules such as the Arbitration Rules of the International Centre for Settlement of Investment Disputes (ICSID), the United Nations Commission on International Trade Law (UNCITRAL) or the Arbitration Rules of the Stockholm Chamber of Commerce (SCC).
Once a dispute arises, parties must act quickly to preserve evidence, assess treaty protections (dependent on the treaty in question), and form legal teams, with investors potentially seeking third-party funding. The decision to arbitrate involves considering ongoing operations and selecting appropriate rules, such as ICSID or UNCITRAL. Each side nominates an arbitrator, with a third jointly appointed, and the tribunal sets procedural terms including timelines, phases, and terms of confidentiality.
Hearings may occur in various locations, but the legal seat governs procedural law and enforcement
Once an arbitration tribunal makes a decision (known as an "award"), the process for enforcing or challenging that award depends on the rules under which it was issued.
If the award is made under the ICSID Convention, it is considered “delocalised,” meaning it stands independently of any national legal system. It cannot be challenged in local courts and is treated as if it were a decision from the highest court of the country involved. Instead, ICSID awards can only be challenged through a special internal process called annulment, which is very limited and rarely successful. Only in exceptional cases will an ICSID annulment committee overturn a tribunal’s decision.
On the other hand, awards made under UNCITRAL Rules can be challenged in national courts under the New York Convention. However, the grounds for challenge are very narrow—such as if the tribunal was improperly formed or if enforcing the award would violate public policy. Whether a challenge succeeds depends heavily on the laws and courts of the country where enforcement is sought.
Enforcing an award can be complex and time-consuming. It may involve tracing and seizing assets, and additional legal hurdles like sovereign immunity can arise, making enforcement even more difficult.
Investor-State Arbitration is not just a niche legal concept—it’s a vital tool for protecting your business interests abroad. If you're investing in jurisdictions with political or regulatory uncertainty, ISA offers a structured, enforceable way to resolve disputes and safeguard your assets. Understanding how it works—and how to structure your investments to benefit from treaty protections—can make a significant difference in managing risk and ensuring long-term success in international markets.
The group has extensive experience of both ad hoc arbitrations and cases administered by all of the major institutions (ICC, LCIA, SIAC, HKIAC, DIAC and UNCITRAL).
Examples of international arbitration matters that we have advised on include :
Mark Fallmann
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