Arbitration and the Judiciary1
By NILS MANGÅRD, Judge of the Svea Court of Appeal and President of the Public Consumer Complaints Board.
1. Advantages and disadvantages of arbitration versus court litigation
As we all know there are two systems of solving business disputes, domestic as well as international, which are provided by the legislations of most countries in the world: You can lodge a claim in a court of law or you can start arbitration proceedings. (In the field of consumer protection there are often also other methods of solving disputes, but such disputes normally do not have an international character, and will therefore not be dealt with in this lecture.) The advantages and disadvantages of the two systems of conflict solving from the point of view of the businessman are often summarized under the following headings:
Speed. A speedy solution of a dispute is of course of great importance to business. A late decision may not only fail to provide a true settlement, but may also create fresh problems.
Court litigation is of necessity slow. This is a prerequisite of judicial security. Then comes the possibility of appeal from the judgment rendered by the court of first instance, in many countries first to an appellate court and then to the Supreme Court. The time between the issue of the writ and the final judgment in big business cases may well amount to 5—7 years. Professor Bernardo M. Cremades in a paper on "Arbitration and Business" submitted to the VIth International Arbitration Congress in Mexico City in March, 1978 rightly points out that "in the end, the parties may secure a first-rate judgement following a brilliant exposition of the case, but without i providing a real decision; it comes so late that perhaps it satisfies neither ot them".
Arbitration usually is a quicker way of arriving at a final and binding solution of a dispute, as in most countries no appeal from an arbitral award to the courts is allowed on the merits. But also arbitration proceedings take time. In spite of fairly short time-limits prescribed by the rules of arbitration institutions (or by provisions of domestic arbitration law) it may well take the parties in international cases up to two years or more to get an award: the persons involved — arbitrators, parties, their lawyers and witnesses — may live in quite different parts of the world; communication by mail is slow; travelling distances may be considerable; so also the difficulties in finding suitable dates for hearings, deliberations etc.
Costs. The long drawn-out procedure, especially on appeal, may make court litigation a costly business as far as the fees of the advocates are concerned, and also because the money you claim from the opposite party is tied up in the meantime. On the other hand, apart from fairly small court fees the services of the judges and the staff and the use of the