Lesson 3

Question 1

What are the two main forms of dispute resolution in international business contracts?

Answer 1

• Litigation (through national courts)
• Arbitration (private dispute resolution process)

Question 2

What are the advantages of litigation?

Answer 2

• Neutral and proven systems
• Usually less expensive
• Option to appeal
• State enforcement mechanisms

Question 3

What are the disadvantages of litigation?

Answer 3

• Lack of speed
• Public process
• Limited procedural control by parties
• Difficulty with cross-border enforcement

Question 4

What legal instruments support enforcement of foreign court judgments?

Answer 4

• Brussels Ia Regulation
• Lugano Convention
• Hague Convention on Choice of Court Agreements
• Otherwise: national exequatur procedures or bilateral agreements

Question 5

What are the advantages of arbitration?

Answer 5

• Confidentiality
• Faster resolution (often)
• Parties choose arbitrators
• Easier enforcement under the New York Convention

Question 6

What are the disadvantages of arbitration?

Answer 6

• Costly
• No or limited appeal
• Arbitrators may lack judicial powers (e.g., issuing interim relief)

Question 7

What determines which law applies in arbitration?

Answer 7

• Often defined by the arbitration clause
• Otherwise: determined by applicable national arbitration law
• Some arbitration systems allow for non-state law (e.g., UNIDROIT Principles)

Question 8

What are some grounds to refuse enforcement of an arbitral award?

Answer 8

• Invalid arbitration agreement
• Violation of ordre public
• Lack of due process
• Exceeded scope of arbitration
• Award is not binding or has been annulled

Question 9

What is “ordre public”?

Answer 9

A principle under which a state may refuse to recognize or enforce foreign judgments or arbitral awards that violate its fundamental legal principles or public policy.