Is
legal Settlement Possible?
The third way is to have a legal settlement in court.
However, since there is no such organization like
the International Commercial Court of Justice, a
lawsuit has to be brought to court in either of
their countries. One may bring a suit against the
other in his own country for convenience. However,
a court judgement from one's country cannot be enforced
in another country due to the international principle
of non-intervention of internal affairs of another
country. Doing this can be very time-consuming as
the language, business practice and the body of
law are all different. It will also incur high expenses
like employing lawyers and interpreters.
What is an Arbitration
Clause?
If there is an arbitration clause in the contract
which specifically appoints an arbitrator, it
can be settled according to his award. The two
parties have to obey the award, because it is
recognized internationally and has legal binding
power. Therefore, it is vital and strongly recommended
that the exporter puts an arbitration clause in
the contract, or in the exchange of correspondence
which constitutes the agreement between the exporter
and importer.
The arbitration clause usually specifies the specific
arbitration body and stipulates that when dispute,
controversies or differences occur, the solution
should be left in the hands of that body. It states
that their award shall be final and must be obeyed
by both parties.
In many cases, the exporter puts the arbitration
clause under the General Terms and Conditions
of the sales contract which specifically appoints
the name of the arbitration body. If the exporter
forgets to put the arbitration clause in the contract
and a dispute occurs, the process involved to
resolve such a dispute will be lengthy.
What is the Role of
ICC?
ICC (International Chamber of Commerce) has the
function of arbitration. It is recommended that
the contracting parties who wish to resort to
ICC Arbitration in the event of any dispute with
their contracting partner, should specifically
agree upon ICC Arbitration in their contract.
In the event that no single contractual documents
exists, they should agree on the same in the exchange
of correspondence.
The following standard arbitration clause is recommended
by the ICC. "All disputes arising in connection
with the present contract shall be finally settled
under the Rules of Conciliation and Arbitration
of the International Chamber of Commerce by one
or more arbitrators appointed in accordance with
the said Rules".
Note: The above clause is quoted from "Incoterms
1990", ICC Publication N° 460-ISBN 92.842.0087.3,
published in its official English version by the
International Chamber of Commerce, Paris. This
book is available from ICC Publishing S.A. 38.
Cours Albert 1 75008 Paris, France.
What is the Regional
Centre for Arbitration?
In Malaysia, the Regional Centre for Arbitration
in Kuala Lumpur established under the auspices
of the Asian-African Legal Consultative Committee,
is the main body with facilities to deal with
commercial disputes.
If the exporter wishes to resort to the Centre's
arbitration, the arbitration clause will be as
follows: "Any dispute, controversy or difference
which may arise between the parties hereto, out
of or in relation to or in connection with this
contract, or any breach hereof shall be settled,
unless amicably settled without undue delay, by
arbitration in Kuala Lumpur, Malaysia in accordance
with the rules and procedure of the Regional Centre
for Arbitration in Kuala Lumpur". Information
on the Regional Centre for Arbitration can be
obtained at the following place:
The Regional Centre for Arbitration
12, Jalan Conlay
50450 Kuala Lumpur
Tel: 03-2420103/2420702
Fax: 03-2424513
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