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As business grows, the potential of conflict among business actors or institutions becomes escalate. To solve the conflict, the parties have many option of settlement forums, one of which is arbitration. Due to its lots of benefits, arbitration becomes popular and considered as the best way to solve commercial dispute.

It has proven that arbitration offers many advantages over litigation in court. There are at least nine advantages that make arbitration becomes people’s favorite in settling their dispute. Here are the detail of arbitration advantages:

First, Fully Controlled by the Parties. Basically, arbitration is a way to settle disputes which the dispute parties has full authority to determine the arbitration forum and its technicality aspects. The parties based on agreement have the opportunity to design the arbitration forum that fits to their needs.

The technicality aspects that could be determined by the parties, such as: the nature and scope of discovery, the hearing process, the length of time for the entire process, and the arbitrators selection.

Second, Time Efficiency. Time efficiency is one of the main barriers that make people hesitate to solve their conflict through the litigation in court. It becomes common knowledge that trial schedule in court is rarely on time. Inefficient process will create legal uncertainty which also might ruin the fairness principle.

This kind of problem does not appear in arbitration. The hearing process in arbitration is very efficient, the schedule is on time.

Third, Transparent and Predicted Cost. Related to the previous point, the time efficiency will automatically press the cost, especially the lawyer fee and costs related to administrative process which are usually considered as the main element of settlement dispute costs.

If the total cost of arbitration is compared to the total cost of litigation in court, the result might be equal or even the arbitration’s higher than litigation in courts. But, at least the costs in arbitration are transparent and more predictable than the court.

Fourth, Flexible Process. As mention before, the parties of arbitration have the full autonomy to determine the process. As long as it is agreed, the parties are free to choose the time and venue of the arbitration process. For example, the parties could decide to hold the arbitration process in the weekend days so that it will not disturb the working activity. Or the parties based on the efficiency consideration could choose to hear the witnesses who live in different city via video conference.

Fifth, Confidentiality. Arbitration process is held in private setting and the attended participants are limited. This is contrast to litigation process in court which is commonly open for public, unless for certain type of cases. Basically, confidentiality is considered as very important factor for corporations who proceed in the arbitration, when dealing with disputes involving intellectual property and trade secrets or when there are concerns about publicity or damage to reputation.

Sixth, Arbitrator Selection. The parties of arbitration can select their arbitrators based on the needed qualification suits to the nature of the case. In choosing the arbitrators, the parties would also consider the personality, reputation, expertise, experience, and off course their availability. The ability to select arbitrators with desired qualification contrasts with litigation in court where judges are appointed randomly without considering their qualification.

Seventh, Final. Disputed corporations are usually willing to solve their case immediately so that it will not cause business paralysis. Therefore, corporation tends to hate such a long process as applied in court where the parties are able to appeal to the higher court. Arbitration provide a settlement dispute proceeding which is final and binding with no opportunity for party to appeal.

Eight, International Scope. Arbitration is borderless and no jurisdiction barrier. The choice of arbitration forum is merely based on the parties agreement. As long as it is agreed, the parties can choose arbitration forum anywhere in the world, regardless the nationality of parties. In practice, the disputed parties tend to choose an arbitration forum located in neutral country.


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