When two parties are in conflict, and neither is based in the United States, they may opt for foreign or international arbitration to resolve their differences. Though these terms are often used interchangeably, experts like Zuko Nonxuba in Johannesburg, South Africa, say there are some essential distinctions between the two.

What Is Foreign Arbitration?

Zuko Nonxuba says foreign arbitration is a process whereby two parties who reside in different countries agree to arbitrate their dispute in a third country. This third country may be chosen for its neutrality, familiarity with the laws of both countries involved, or because it is a signatory to a particular treaty or convention that will govern the arbitration.

What Is International Arbitration?

On the other hand, international arbitration is a process whereby two parties who reside in different countries agree to arbitrate their dispute following the laws of a particular country. The choice of law may be dictated by the terms of a contract between the parties, by the rules of a particular arbitral institution, or by the laws of the country where the arbitration will take place.

Benefits of Foreign Arbitration

One of the main benefits of foreign arbitration is that it allows parties to resolve their disputes without going through the courts of either country. This can be especially helpful when one of the countries involved does not have an adequate legal system or when both countries have conflicting laws that would make it difficult to resolve.

Another benefit of foreign arbitration is that it can save time and money. Because both parties must agree to abide by the arbitrator’s decision, there is no need for costly and time-consuming litigation. In addition, because foreign arbitration takes place in a neutral third country, there is no risk that one party will have an advantage over the other due to its familiarity with the local laws.

Benefits Of International Arbitration

One of the benefits of international arbitration is that it provides greater flexibility than foreign arbitration. For example, if the parties want to choose a particular law to govern their dispute—such as Islamic or Jewish law—they can do so through international arbitration. In addition, if they want to select an arbitrator specializing in a particular area of law, they can also do so through international arbitration. 

Zuko Nonxuba says another benefit of international arbitration is that it can be faster and cheaper than going to court. Because international arbitration takes place outside of any one country’s legal system, there are no delays due to appeals or other legal procedures. In addition, because both parties must agree to abide by the arbitrator’s decision, there is no need for costly and time-consuming litigation. 

Finally, international arbitration can provide more privacy than going to court. This is because arbitral proceedings are typically not open to the public, and arbitral awards are not generally published unless both parties agree. 

What Are The Key Differences?

The critical difference between foreign and international arbitration is that foreign arbitration takes place in a third country. In contrast, international arbitration takes place by the laws of a particular country.

Foreign arbitration may be chosen for its neutrality, familiarity with the laws of both countries involved, or because it is a signatory to a particular treaty or convention that will govern the arbitration. On the other hand, international arbitration may be chosen for its flexibility, speed, or privacy.

How To Choose The Right Option

When deciding whether to choose foreign or international arbitration, it is essential to consider the specific needs of your case. International arbitration may be the better option if you need to resolve a dispute quickly and efficiently. However, foreign arbitration may be the better choice if you need greater flexibility in choosing the law that will govern your argument or if you require more privacy.

It is also essential to remember that both foreign and international arbitration have benefits and drawbacks. As such, you must speak with an experienced attorney to help you determine which option is best for your specific case.

Why Choose Arbitration?

There are many reasons why parties might choose arbitration over other dispute resolution methods, such as going to court. Some of the most common causes include: 

Zuko Nonxuba says arbitration is typically faster and cheaper than going to court. Arbitration is often more flexible than going to court, as the parties can choose the law that will govern their dispute and select an arbitrator specializing in a particular area of law.

Arbitration can provide more privacy than going to court, as arbitral proceedings are typically not open to the public, and arbitral awards are not generally published unless both parties agree.

Conclusion

In conclusion, foreign and international arbitration are processes whereby two parties who reside in different countries agree to arbitrate their dispute in a neutral third country. However, some essential distinctions include flexibility, speed, cost, and privacy protection. When choosing between foreign and international arbitration, it is necessary to consider all these factors to decide which option best suits your needs.