THE RISE OF ARBITRATION IN CROSS-BORDER FINANCIAL DISPUTES
The preferred mechanism for resolving disputes in the banking and financial services sector has traditionally been litigation. Alternative forms of dispute resolution, such as arbitration, have not achieved the same popularity as in other industries. However, a recent survey conducted by Queen Mary University of London and PwC (the ‘Survey’) suggests that arbitration is becoming more prevalent in the sector. This trend is being driven by globalisation and the increasing complexity of financial transactions. In the context of cross-border financial disputes, arbitration offers a number of particular advantages, such as the greater enforceability of arbitral awards, the flexibility of arbitral procedures, and the availability of specialist knowledge and expertise. This article will explore the business benefits of arbitration in cross-border financial disputes.
Increasing prevalence of arbitration
The Survey on international arbitration was based on responses received from over 100 corporate counsel, with a particular emphasis on the financial services, energy and construction sectors. Unsurprisingly, the vast majority of respondents in the sector confirmed that litigation was the most preferred dispute resolution mechanism, followed by arbitration, mediation and adjudication/expert determination. However, 69 percent of respondents also agreed, or strongly agreed, that arbitration is well suited to the types of disputes encountered in the sector.
Jan-Mar 2015 issue