The main pitfall is the courts seized will be courts made up of general judges, often little aware of the intricacies of business practice. The agreements submitted to the judges must therefore be carefully explained and made understandable in order to overcome the prejudices that often occur against certain commercial practices. You need to know about the California law on fraud there.
The way of arbitration:
The arbitration route offers litigants an alternative to the ordinary and judicial method of settling their dispute. The arbitration procedure can be multiple and varied. However, it differs from ordinary civil procedure on the following points: first, the procedure, except on certain intangible principles intended to guarantee to the parties certain fundamental principles of our modern legal order such as the right to be heard, can be freely chosen by the parties. Certain bodies, such as the abovementioned ICC or the Arbitration Chamber established jointly by the chambers of commerce and responding to the name of Rules of Arbitration, have however established basic procedural rules, the parts of which are inspire in general. You need to have the defense to repudiation of contract there and the lawyers can be useful in this way.
The parties must choose their arbitrators.
Unlike mediation, we believe that the choice of arbitrators, who not only have experience in arbitration, but also a solid qualification as a lawyer, is essential. Indeed, although more flexible, the arbitration procedure sets the framework for a debate and primarily legal arguments.
The arbitration procedure is only possible if the parties to the dispute agree to submit their dispute to this type of procedure. They may have done so prior to any dispute, in particular by an arbitration clause inserted in the contract between them and from which their dispute arose, or subsequently by an ad hoc written agreement.
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The Code of Civil Procedure set the minimum framework for an arbitration procedure to be conducted by an arbitral tribunal having its seat in Switzerland, that is to say between parties having their domicile or their headquarters located in Switzerland. These provisions lay down the minimum rules applicable under the terms of the arbitration agreement, the procedure for setting up the arbitral tribunal, the challenge, removal or replacement of arbitrators, the arbitration procedure proper, including those relating to security interests, any provisional measures and damages, as well as the form and content of the arbitration award, its content and the conditions under which it may be used.
In the event of disputes between parties located outside Switzerland, it is generally the Swiss Rules of International Arbitration or the rules of the ICC which will regulate the procedural framework of the arbitration, if the seat of the arbitration is in Swiss. The general framework is in this case laid down in the California law on good faith and fair dealings.
Pros and cons of arbitration
The settlement of a commercial law dispute, whether internal to Switzerland or of an international nature, offers great advantages over ordinary civil procedure. First of all on the international level, it allows the Swiss side to avoid being attracted to a foreign forum that it would not have wished. Internally or internationally, the arbitration procedure offers, the immense advantage of having its dispute settled by arbitrators chosen by the parties, and therefore by specialists either in the settlement of disputes or in the matter under consideration.