Arbitration

You can contact the Court of Arbitration (CA) of BIA when:

• The parties are in dispute concerning the formation of a contract;
• An executed contract has gaps that need to be filled;
• A contract needs to be adjusted in order to accommodate newly arisen circumstances;
• The validity of an executed contract is challenged;
• The performance of the contract is in dispute and the parties want to solve it in court.

What is an arbitration agreement?

• Most often it is under the form of a mediation clause contained in the parties’ contract. A sample clause is set forth below: “All disputes originated from the present contract or those related to it as well as all the disputes about the gaps that need to be filled or the adapting of the contract to the new circumstances, shall be resolved by the Court of Arbitration at BIA, in accordance with its Rules”.
• Arbitration agreement could be under the form of an independent contract /agreement/ with the above mentioned content.
• Arbitration agreement could be reached when the litigant turns with a defence claim to the CA at BIA and the defendant does not mind it.
• Arbitration agreement could be reached when the litigant files a defence claim to the Court of Arbitration at BIA and the defendant does not oppose to it.

You are not recommended to refer to the Court of Arbitration at BIA in cases of:

• The dispute is under public legislation (for example administrative violation, administrative act’s validity, etc.).
• The dispute is under the labour legislation.
• The dispute is non-property related (for example: for origin, for termination and annulment of marriage, etc.).
• Demanding separation allowance.
• The dispute is for the validity of corporate juridical person’s verdict (for example the verdict of the General Assembly of enterprise or cooperative)

Mediation

You can refer to the Court of Arbitration at BIA for mediation when the parties aim to agree over a dispute concerning the formation and execution of a contract. In this case they need a mediation agreement. What is a Mediation agreement?

• Most often it is a clause for mediation in the parties’ contract. A sample clause is set forth below: “If a dispute arises in relation to the entry into or the performance of this contract, the parties agree to resolve the dispute through mediation administered by the Court of Arbitration at BIA, in accordance with its Rules, prior to resorting to arbitration before the same or another tribunal for the resolution of the dispute.” Or a shorter version: “In case of disputes regarding the present contract the parties agree to resolve them through mediation administered by the Court of Arbitration at BIA”;
• The mediation agreement could be a separate agreement using the above sample wording;
• The mediation agreement could be achieved, when the claimant files a claim for mediation to the Court of Arbitration at BIA and the respondent does not oppose to it.

Advantages and Disadvantages over Litigation

   Advantages:

• Speed: The dispute is resolved in a one-step process, while litigation is a three-step process;
• Cost efficiency: The arbitration fee is lower than the litigation fee (arbitration fee is approximately 2%-2.5% versus 4 % litigation fee);
• Selection of the Decision - Making Authority, which presumes bigger confidence in the chosen arbitrator, who is an expert in the subject matter of the dispute;
• Ability to determine the procedure;
• Confidentiality: Unlike litigation, the arbitrary process is not public;
• Confidentiality: Unlike litigation, the arbitrary process is not public;
• Stability: The arbitral award could be challenged just through a legal claim, supported by thoroughly listed causes of appeal, whereas the trial court decision is subject to appeal by a two level appellate order;
• Certainty of enforcement: Due to the New York Convention the enforcement of a foreign arbitral award is more assured than the enforcement of a court ruling.

   Disadvantages:

• Risk: Because of the impossibility of appealing the arbitral award, the parties are more likely to be bound by an incorrect decision;
• Necessity of Court assistance: As the Court of Arbitration is not vested with state power; the arbitration needs assistance for the issuance of writs of execution and collection of oral evidence.