In the international trade of goods, it is inevitable that disputes will arise between the buyer and seller during the performance of the contract for various reasons. When a dispute occurs, it is generally first resolved by the two parties through friendly negotiation. If the negotiation fails, the dispute will be handled through third-party mediation, arbitration or judicial proceedings according to the circumstances. Among them, arbitration is an important way to resolve foreign trade disputes.
(I) The meaning, form and execution of arbitration
Arbitration refers to a way for the buyer and seller to sign a written agreement before or after the dispute occurs, and voluntarily submit the dispute to a third party agreed by both parties for arbitration to resolve the dispute.
The arbitration agreement must be in written form, and there are two specific ways. One is concluded by the two parties before the dispute occurs, indicating that the dispute should be submitted to arbitration once it occurs. It is usually a clause in the contract, called an arbitration clause; the other is concluded by the two parties after the dispute occurs, indicating that they agree to submit the dispute that has occurred to arbitration. It is often concluded through correspondence between the two parties.
The arbitration clause in an import contract generally includes the scope of the dispute submitted for arbitration, the arbitration institution, the arbitration location, the arbitration procedure rules, the execution of the arbitration award (or the effectiveness of the arbitration), etc.
(II) Issues that should be paid attention to when signing an arbitration clause
(1) The scope of the dispute submitted for arbitration must be clearly stated.
(2) The arbitration rules and international conventions must be clearly stated.
(3) The place of arbitration should be determined, and efforts should be made to arbitrate in my country.
(4) my country’s permanent arbitration institutions are the China International Economic and Trade Arbitration Commission and the China Maritime Arbitration Commission.
(5) In my country, all awards made by the China International Economic and Trade Arbitration Commission are final and binding on both parties. They must be executed accordingly, and neither party may sue the court for a change.
(6) The costs of arbitration are generally borne by the losing party.