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Application of International Law

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Arbitration utilizes a neutral third party to hear the dispute between the different parties. The hearing is an informal hearing the arbitrator is mutually selected by the parties. The arbitrator is retained to decide how to settle the conflict, the decision that the arbitrator makes is final and binding. Arbitration is more cost efficient and faster than litigation but it is the arbitrator’s decision what the terms and conditions will be not the parties involved. (Grand Vally Srtate University , 2013) The Federal Arbitration Act requires that where the parties have agreed to arbitrate, they must do so in lieu of going to court. Once an award is entered by an arbitrator or arbitration panel, must be confirmed in a court of law. Once confirmed the award is then reduced to enforceable judgment, which can be enforced by the winning party in a court of law, like other judgments. The federal Arbitration Act awards have to be conformed within the year. If the losing party wants to object they only have three months to do so. Arbitration agreements can be entered “prospectively” that is in advance of any actual dispute. They may be entered into by disputing parties once one has a risen. Section two of the Federal Arbitration Act states that arbitration provisions will be subject to invalidation only for the same games applicable to contractual provision generally, such as unconscionability or duress. Consequently most state law that disfavors the enforcement of the agreements will be preempted by the FFA. Not all state laws regarding arbitration are preempted. (2014) The Federal Law on International Commercial Arbitration, 1993 (the law) governs international commercial throughout the entire territory of Russia. Manifestly, this has a unification effect and harmonizes legal practice in Russia. (Russian Arbitration Association, 2013)
It is largely a mirror image of the UNCITRAL Model Law on International Commercial Arbitration (1985) This places Russia on the map of countries with modern arbitration legislation. Plus, growth of the domestic and international arbitration cases boosted the amount of enforcement and recognition proceedings brought to the state courts. Court (Supreme Commercial Court) outlined the non-binding guidelines for putting aside, recognition and enforcement of arbitral awards. The guidelines below, are an important legal tool for navigation within Russian legal environment. (Russian Arbitration Association, 2013)
The law states that any disputes of commercial nature involving a foreign party, and commercial disputes where at least one party has foreign investments, and the other is Russian company, can be referred to international commercial arbitration. It does not specify the level required of foreign participation in Russian company with foreign investments that dispute to be eligible for international arbitration. In practice, even a normal foreign investments in a Russian company can satisfy this requirement. (Russian Arbitration Association, 2013)
In an arbitration Agreement the law sets out a mandatory provision as to the written form of the agreement. Exchange of letters, faxes, and emails and other means of qualify as evidence of a written agreement. Although, submission by the parties to dispute their statements of a clam and response without further challenge of jurisdiction of the arbitral tribunal may effectively evidence of an agreement to arbitrate, ever without the document in hand. (Russian Arbitration Association, 2013)
There is an understanding in Russia that arbitration is a separate apparatus from a state court system as it stems from the parties, decisions to submit a dispute to a privet dispute resolution mechanism. Arbitration and Arbitress should not be confused in Russia. (Russian Arbitration Association, 2013)
In my opinion this matter should be handled in a different country. I don’t believe that it would be truly be considers a neutral party if from the same country as one of the parties involved. The situation that they are in is a difficult because the company Monarch Associates from the United States signed the agreement to hold any legal or non-legal disputes held in Russia. So they are going to have a hard time trying to get anything moved to the United State. I honestly do not think that the arbitration should be held in a different country like China so that it is completely neutral.
One of the advantages to arbitration is that both parties agree on the arbitrator so both parties will have confidence in the arbitrator. Second, the dispute will be handled faster than going through court. Third, arbitration cost less the money then going to court, so they won’t be spending as much money. The parties split the cost of the arbitration. Fourth, unlike a trial, arbitration is a privet procedure. So if you both parties want privacy the dispute and the resolution can be kept privet. Fifth, whatever the arbitrator decides is binding, therefor there is little opportunities for either side to appeal, so it becomes the end of the dispute. (Allen, 2009)
A disadvantage is that the United States Company Monarch Associates signed the agreement that all disputes will be handled I Russia so they will never know just how neutral the arbitrator will be.
First, if the arbitration is binding, both sides give up their right to appeal. Second, if the matter is complicated but the amount of money involved is modest then the fee may make arbitration uneconomical. In this case it may be cheaper to try the case in a General District Court. Third, rules may make it so that not all evidence can be used. Fourth, if some of the information that a witness gives is in writing you do not get to cross examine them. Fifth, discovery is more limited with arbitration. Sixth, if arbitration is mandatory or required by the contract, then the parties do not have the flexibility to choose arbitration, only when both parties agree. Mandatory arbitration allows one party to force the other party to do it. Seventh, the standards used by an arbitrator are not clear, but they have to follow the law. (Allen, 2009)
If I were Monarch Associates in house counsel, I would tell them not to sign a contract that states they have to do arbitration in the other country. I would tell them that if the other party insists on arbitration not being in the United States, then both parties should agree on a third country to hold the arbitration. Also I would suggest that they not sign a contract that states that they have to do arbitration. This way if they would rather take it to court they can.
I think that they should also keep in mind that they should have a part in making the contract so that they do not have to fight like they are with Vladir Unlimited. Also not to sign things that they are going to regret latter. It is better to just leave out where the arbitration is going to be held to prevent it from having to be held in one country.

Works Cited
(2014, 12). Retrieved from en.wikipedia.org/wiki/Federal_Arbitation_Act
Allen, A. R. (2009, 10 2). Retrieved from www.allenandallen.com/blog/arbitration-advantages-and-disadvantages.html
Grand Vally Srtate University . (2013, 11 25). Retrieved from www.gvsu.edu/arbation/gclid-CNKFXU-ly8MCFdKEfgodskAzg
Russian Arbitration Association. (2013). Retrieved from www.arbitration.ru/en/dispute-resolution/arbitration-in-russia.php

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