There are many advantages of arbitration when compared to litigation in State Courts. The following advantages mainly are related to commercial disputes:
Speed;
Flexibility;
Quality expertise;
Finality; and
Enforceability
In this short summary that follows, I will focus on the benefit of the speed of arbitration when compared to litigation.
Whether you are reading this from the perspective of a business, an organisation or an individual you would prefer commercial disputes to be addressed and resolved quickly. The sooner such disputes are resolved then the sooner you and your enterprise or organisation can return or focus your energy on the operations of your business or project.
The shorter the distraction caused by the commercial dispute the less time needed to be allocated to the dispute. The less time allocated to the dispute will result in less financial and opportunity costs to you and/or your enterprise or organisation.
Litigation
Litigation can be slow. State Courts in most jurisdictions are suffering from back logs with hearing dates in excess of 52 weeks away once cases have advanced to the stage of a pre-hearing review. In some jurisdictions a wait of 3 to 4 years for a hearing date is not unusual. One of the reasons for the back log is because multiple parties demand the courts’ time and that time is very limited because the number of Judges are limited and the Court operates during normal business hours during weekdays.
Arbitration
Arbitration moves faster than Litigation because of its procedure. Arbitration is not limited or restricted to the Civil Procedure Rules used in State Courts. As a party to an arbitration you can implement your own procedure once all parties agree because it is your arbitration and a private process. Your hearing can start and finish whatever time you wish providing that the other party and the arbitrator(s) agree. Additionally, you may decide and be able to get the other parties to agree to have the arbitration be determined on the documents only. This will of course avoid oral arguments and oral submissions which can save you additional time.
Its faster to use arbitration to resolve commercial disputes. One of the reasons is because you and the other parties to the arbitration can draft your own procedure to govern the arbitration and avoid the Civil Procedure Rules of State Courts. In fact, you and the parties to the arbitration can take the necessary steps to ensure that your arbitration process is tailor-made to mitigate against your arbitration being protracted. This cannot be done in State Courts.
If you have a commercial dispute on your hands and desire that the dispute is resolved quickly then I recommend that you consider arbitration.