Arbitration or ordinary jurisdiction is the debate that we bring up today in this article of the blog de The Lighthouse Team.
“To live without ceasing to be assaulted by contrary truths, contrary imperatives. Sometimes I can overcome/displace the contradiction, finding a meta-terrain. or meta-viewpoint. Otherwise I make a choice and a bet.”
Edgar Morin
In every contract drafting process there comes a moment, and in general this moment usually appears, curiously enough, almost at the end of what are usually called the “midnight clauses”, which are the ones that cross our minds when we would have liked to finish the work, when a dilemma arises that is very unsolvable: How are the conflicts between the parties going to be resolved?
Undoubtedly we would all like these conflicts not to occur, and the truth is that, in general and despite what it may seem – it is like the news, the bad ones dominate – there are usually not so many and the vast majority of contracts are fulfilled to the satisfaction of the parties, after all that is the true purpose of the contract and not the resolution of conflicts as some would think. However, there are conflicts, like the meigas, and for all tastes. Providing the mechanisms for their resolution always seems a better idea than waiting for them to arise and for the applicable regulations to decide not only their resolution, but also their “how”, whether through arbitration or ordinary jurisdiction.
In this situation, the parties are asked, most of the time as I said, when the parties would like not to have to consider anything else, whether it is better, in case of conflict, to go to the ordinary courts or to leave it to arbitration (leaving aside other mechanisms such as mediation or conciliation with all its advantages) and in this case, what type of arbitration.
It is at that moment that the client usually looks at the lawyer and asks that question “do you – a close relationship between lawyer and client, usually having been generated by then, which justifies the familiarity of the treatment – what do you think?” The question has no easy answer except for the unconditional of one or the other procedure, which hopefully are the fewest because it is not good for a lawyer to be “unconditional”, one loses perspective and who loses perspective loses much of its added value or even directly of “its value”.
The reality is that there are reasons to choose arbitration just as there are reasons to choose ordinary jurisdiction just as there are reasons not to do so and for each of these routes. I will try to explain.
Ordinary jurisdiction is usually slow, generally very slow and that, however you look at it, is not good except as an incentive for the parties, on their own, to try to reach an agreement. In this sense, arbitration is much faster, although some have shown that it can take longer than anyone would have liked. It is also said that ordinary jurisdiction is cheaper, but it is well known that time is money and in the end the cost can be considerable, something that in arbitration is usually evident from the outset. Arbitration has its cost, at the end of the day you have to pay the arbitrator (when there is only one, when there are three or more they all have the right to eat). Arbitration, especially some arbitrations are usually expensive (perhaps not so much considering what is at stake, it must be said), although it is possible that seen as a whole it is not so expensive and in any case, and this could be considered positive, the initial cost usually encourages the search for amicable solutions that do not always come to fruition but that in the worst case help to situate the reality of the conflict.
Ordinary jurisdiction is in the hands of people who are professionals in judging. There are increasingly specialized jurisdictions within the usual ones, but their “strength” is not only their knowledge of procedure but also their ability to judge. That is what they are trained for, and that is what they are supposed to excel at. If they also have in-depth knowledge of the subject matter, so much the better. Arbitrators, many of whom are public defenders, learn as they go, which is no small feat; in fact, it is a great deal. However, what they “sell” is their technical knowledge, their specialization, and even, in some cases, their great “negotiating” skills (which sometimes comes as a surprise as a quality to be valued) and, incidentally, their ability to judge. The problem is that the judge is usually the one “on duty,” and arbitrators are usually chosen by the parties (at least, in general, one by each party), and as we know, those who choose tend to do so because they consider them a little (to put it mildly) “their own” and therefore there are high expectations (and unfortunately we do not know to what extent) that this arbitrator will easily “understand” (also a euphemism) our arguments, which leads us to think that it is not “our” arbitrator who needs to be convinced, but only the other one, as if that other one were something like an avatar of the other party. Let’s not get into the issue of possible conflicts of interest (which obviously can arise) or the much-discussed “closed club” of arbitrators swapping cases among themselves. I’m not saying that this is the case, much less that it is common practice, but it is certainly a possibility that should not be dismissed.
Moving on; another argument that is often put forward in favor of arbitration is that the process is usually much more flexible, although lately there has been a tendency to “proceduralize” the process, a tendency that makes it more burdensome, precisely where it should stand out for its flexibility, which does not imply, let it be said, a lack of rigor, but a greater ability to understand and, therefore, to assess with a more practical vision, not only the conflict but also its circumstances. Flexibility should be the framework in which the content gains weight over the forms, while in the ordinary jurisdiction the forms have a very significant weight to the point of sometimes obscuring too much the substance (even if Hollywood movies have done their best to disprove it in our mental ideology…).
On the other hand, the ordinary jurisdiction establishes a series of appeals against judgments that serve as a control of judicial decisions, which is positive in that it allows a greater number of people to review judicial decisions, but bad in that it adds time to time (and in a way, it also helps some judges to discharge their responsibilities). In arbitration it is assumed that everything is played “one card at a time” assuming the enormous professionalism of the arbitrators (about which, in the vast majority of cases, there is no dispute). However, there is currently a tendency to speak of appeals in arbitration, which at first sight seems contradictory to the meaning of arbitration itself. In my opinion, and it is only an opinion, it is as if there is a certain complex in arbitration that drives some to want to assimilate it as much as possible to an ordinary jurisdiction when perhaps it should be the other way around: they should not be two similar jurisdictions, but alternatives. It goes without saying that one is alternative as soon as one is different and the greater the difference, the greater the “alternativity“.
There are many more arguments to be put on the table, but this is not about writing a treatise, but rather showing, with a few almost impressionistic brushstrokes, why it is so difficult to answer the question of arbitration or courts. The answer, beyond the usual “it depends,” is that each case is different and, as such, requires an in-depth analysis, far from the “midnight clause,” to choose the one that best suits the contract we are finishing drafting or the possible conflicts that may arise.
Therefore, in the Arbitration or Jurisdiction dilemma, there is nothing pre-established and perhaps this is what makes it such an exciting subject. After all, as Edgar Morin says, it is “a choice and a gamble”.
