Originally from A Practical Guide to International Arbitration - Second Edition 

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Introduction 

International arbitration is a method of private dispute resolution recognized by businesspeople and their in-house counsel all across the globe. It is based on the foundational principle of party consent. Parties express that consent when they decide to arbitrate (i.e., in the form of an arbitration agreement) rather than pursue litigation or some other method of dispute resolution. In other words, any international arbitration is preceded by an affirmative decision to arbitrate taken by each party to that dispute. In this chapter, we explore some of the factors that weigh on that decision. In particular, we describe why some parties opt for international arbitration while others do not, and we discuss the business case for and against international arbitration by assessing the comparative advantages and disadvantages of arbitration compared to other forms of dispute resolution.  

A.    Key Characteristics of International Arbitration   

International arbitration takes many different forms. In fact, it attracts users from varied backgrounds and legal traditions specifically because it offers flexibility and adaptability to diverse parties and contexts. Yet, at its core, an international arbitral dispute involves four elements: (i) party consent; (ii) private arbitrator(s); (iii) an international dispute; and (iv) a binding and final award.  Each is addressed in turn.  

1.    Party Consent  

Party consent forms the foundation of arbitration. Parties must choose arbitration to resolve their disputes. Unlike litigation before national courts, arbitration never serves as the default method of dispute resolution between parties absent an affirmative agreement (i.e., an arbitration agreement).  It is for this reason that the form and validity of an arbitration agreement bears enormous importance on the entire arbitral process.