Most civil and commercial disputes can be resolved through litigation or arbitration proceedings. Arbitration is a quick and simple process, with no right of appeal for either party and no need to go through a second hearing. The parties can also choose the arbitrator, and the arbitrator they choose should be more comfortable than the one chosen by others. So is arbitration a better option than litigation?

1. Confidentiality

Hearings are closed to the public and most court cases can be heard with an identity card, but the tribunal is not allowed to sit in on hearings. Arbitral awards are also not public and cannot be found on the Internet.

2. Final decision

An application for a second hearing may be made against a first instance award in litigation, but in arbitration proceedings, the award takes effect when it is made and the parties may apply to the court to enforce the award.

3. Choice of the hearing officer

This is the major difference between arbitration proceedings, where the parties may choose the hearing officer, and litigation proceedings, where the court assigns the hearing officer.

4. Agreement

The parties must expressly choose the arbitral proceedings, otherwise, the arbitral institution is not entitled to accept them. Litigation proceedings, on the other hand, do not require an express choice by the parties, and the court may be confirmed in accordance with the jurisdictional provisions.

Arbitration is a system for resolving disputes in which the parties to a dispute decide, on a voluntary basis, to submit the dispute to a non-judicial third party, which issues a binding award. Arbitrage is a contract-based, autonomous, civil and quasi-judicial process. While litigation refers to actions taken by citizens, legal persons, and other organizations to sue, complain, accuse, or the judicial authorities to pursue the criminal responsibility of others based on their duties, and to be decided by the people’s courts.

The scope of application of arbitration is contractual disputes and other disputes over property rights and interests between citizens, legal persons and other organisations with equal subjects; the scope of application of mediation is all kinds of disputes involving disputes over civil rights and obligations between citizens and citizens and between citizens and legal persons and other social organisations. The scope of application of litigation includes all disputes of civil, criminal and administrative nature.

Arbitration is final. In other words, once an award is made, it takes legal effect and the parties cannot apply to the arbitration committee for reconsideration or sue the court for the same dispute if they are not satisfied with the arbitration award, and there are no procedures for the second instance or retrial in arbitration. There are also trial supervision procedures. 

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