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Arbritration

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Submitted By Sapphire3
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rbitration is defined as “a process of settling an argument or disagreement in which the people or groups on both sides present their opinions and ideas to a third person or group” http://www.merriam-webster.com/dictionary/arbitration. In the United States the law that governs arbitration at a state and federal level is the Federal Arbitration Act (FAA)(http://www.mondaq.com/unitedstates/x/309172/Arbitration+Dispute+Resolution/International+Arbitration+And )”The Federal Law on International Commercial Arbitration, 1993 (the "Law") governs international commercial arbitration throughout the entire territory of Russia. Manifestly, this has a unification effect and harmonizes legal practice in Russia. The Law is largely a mirror image of the UNCITRAL Model Law on International Commercial Arbitration (1985) and places Russia on the map of the countries with modern arbitration legislation.” http://www.arbitrations.ru/en/dispute-resolution/arbitration-in-russia.php

“An acceptance is “a manifestation of assent to the terms [of the offer] made by the offeree in the manner invited or required by the offer.”1 In determining if an offeree accepted an offer and created a contract, a court will look for evidence of three factors: (1) the offeree intended to enter the contract, (2) the offeree accepted on the terms proposed by the offeror, and (3) the offeree communicated his acceptance to the offeror.” (Book page 353) In my opinion, Russia should be the country that handles the dispute in this situation between Monarch Associates and Vladir Unlimited. Monarch associates I believe intended to enter into the contract, accepted the terms, and communicated their acceptance by signing, Monarch Associates should have negotiated their terms and expressed their concerns prior to agreeing to the contract.

An advantage is “something (such as a good position or condition) that helps to make someone or something better or more likely to succeed than others”. A disadvantage is “something that causes difficulty : something that makes someone or something worse or less likely to succeed than others.” (http://www.merriam-webster.com/dictionary). One advantage to the Monarch Associates is enforceability. “One of the key advantages of arbitrating rather than litigating international disputes is the relative ease with which an international arbitral award rendered in one country can be enforced in another country. This advantage is crucial, as the prevailing party in an international dispute frequently has to enforce the judgment or award rendered in its favor in another country in which the unsuccessful party has assets.” http://www.proskauerguide.com/arbitration/19/I Additional, advantages are speedy proceedings and “it avoids some of the hostility of courtroom disputes, perhaps because it's a private proceeding versus the public drama of the courtroom” (http://www.nolo.com/legal-encyclopedia/arbitration-clauses-contracts-32644.html). One disadvantage would be questionable objectivity because “an arbitrator chosen by a party within an industry may be less objective, more likely to be biased in favor of the appointing group.” http://www.nolo.com/legal-encyclopedia/arbitration-pros-cons-29807.html Also, “unlike a court ruling, a binding arbitration ruling can't be appealed. It can be set aside only if a party can prove that the arbitrator was biased or that the arbitrator's decision violated public policy. Unlike a court case, there is no automatic right to discovery (the process by which the parties have to disclose information about their cases to the other party). (However, you can include a requirement for discovery in your arbitration clause or agree to it under arbitration rules.) The costs of arbitration can be significant; in some cases, they may even exceed the costs of litigation” (http://www.nolo.com/legal-encyclopedia/arbitration-clauses-contracts-32644.html) In any contract, there is going to be advantages and disadvantages for both parties.

If I were Monarch's Associates' in-house counsel, the advise I would give them on negotiating future joint ventures with Russian businesses would be “develop a standard arbitration clause and fallback positions in advance of negotiations. Select the place of arbitration based on its law regulating the arbitration process and the quality of its arbitrator community. Your corporate home might seem best, but its courts could interfere excessively in arbitration, or it might lack a deep bench of arbitrators suited to your dispute or industry. Think about the ideal number of arbitrators and consider the new appeal-within-arbitration options.The trend is toward sole arbitrators in all but the highest-stakes cases. Leading providers now allow parties to opt.” (http://www.pattonboggs.com/ViewpointFiles/7afdd519-e2c8-4211-b1d9-bb251e604710/Arbitration%20Tips%20and%20Traps%20for%20Corporate%20Counsel.pdf.) Other considerations Monarch Associates should keep in mind in the formation of any future contracts with foreign companies should be Include essential terms , avoid unfair arbitration clauses, avoid rending legal advice, and be careful with waivers of statutory remedies because “if the arbitration agreement limits or prevents a party from obtaining relief under a statutory claim, the party seeking such relief may pursue the statutory remedies in court. Such a result would defeat the purpose of having an arbitration agreement in the first place.” The first main consideration I think is the most important is consider translating agreements in certain situations because “in situations like in Basulto where the party without leverage is not fluent in English, providing that party with copies of the agreements that are translated in their native language would provide a defense to any claims that the agreements are unenforceable due to a language barrier. Given the number of Spanish-speaking consumers in South Florida, vendors should take special precaution to ensure that they do not risk having their contracts (or pertinent provisions thereof) rendered unenforceable because they are written in English.” The second main consideration would be to include miscellaneous terms, such as, “ Practitioners should also include a severability clause in the contract so the court can sever any unenforceable term of the arbitration clause without rendering the entire clause unenforceable. They should also expressly state in the contract that the arbitration provision survives the termination or expiration of the contract.” http://www.dailybusinessreview.com/id=1202669094868/Tips-To-Drafting-Effective-Arbitration-Clauses?slreturn=20141110210934.

In conclusion, the Federal Arbitration Act (FAA), the The Federal Law on International Commercial Arbitration, and the UNCITRAL Model Law on International Commercial Arbitration govern arbitration over both the USA and Russia. There are many advantages and disadvantages that stem from the arbitration process. Along with many considerations. Ultimately, review the laws and seek counsel to make the best decision for the specific contract you are constructing.

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