What is the difference between a Judicial Process and an Arbitration?

Arbitration and the judicial system are two exclusive conflict resolution forums. In other words, once the parties agree to submit their disputes to arbitration, they restrict the possibility to resort to the judicial system for the resolution of such disputes. Under this approach, arbitration is a method of dispute resolution to which the parties voluntarily submit.

In this sense, while in the judicial process the system of administration of justice intervenes, through the judicial courts; in arbitration, the parties resort to impartial and independent third parties, chosen or proposed by the parties, called “arbitrators”. Referees, after giving the parties an opportunity to present their positions and to hear the evidence submitted, they issue the award, which is the decision that resolves the disputes submitted to arbitration. In accordance with the national legal framework, this posThe same authority and binding force as a judicial sentence, i.e., it has the quality of res judicata.

It is important to note that, while most disputes can be resolved in a court of law, not all disputes can be resolved in arbitration. The matters subject to arbitration are those that are freely disposable under the law. Therefore, certain matters of a labor or criminal nature, such as those related to inalienable or unwaivable rights, may not be submitted to arbitration. Therefore, only disputes arising between private parties (for example: compensation, breach of contract, patrimonial liability, etc.) or those whose submission is regulated by law, such as disputes arising from contracts under the State Contracting Law, may be submitted to arbitration.

One of the major differences between arbitration and the judicial process is the time, companies tend to resort to arbitration, since it generates lower transaction costs. In addition, in private-to-private arbitration, the details of the process are kept confidential, which is beneficial for companies wishing to keep their business affairs private. In the case of contracts where the State is one of the parties, the award and the proceedings are made public after the arbitration is concluded.

4 differences between court proceedings and arbitration

In view of these differences and similarities we can conclude that arbitration is an effective alternative dispute resolution method, especially when we want a quick and confidential resolution of the dispute.

Flexibility vs. Formality:

Arbitration stands out for its flexibility. The parties involved are free to choose the place, the language, the procedures and even the arbitrators themselves. This allows the process to be tailored to the unique circumstances of each dispute, often resulting in a more personalized and efficient experience.ficient. In contrast, judicial procedures are governed by pre-established rules in the law, which implies greater formality and less control over aspects such as the choice of the judge and the competent court.

Speed and Efficiency

In general, arbitration tends to be faster than the judicial process. The less formal nature and the ability of the parties to design specific procedures often lead to shorter timeframes. On the other hand, judicial courts may experience delays due to the procedural workload and the need to follow rigorous stages of the judicial procedure.

Specialization:

In arbitration the parties may select arbitrators with specific expertise in the area in dispute. This ensures that cases are evaluated by experts in the field, which favors the issuance of faster decisions.

Appeals and Finality:

While the judicial process has as a rule the existence of a double instance; in arbitration, the award is final, unappealable and binding, which provides certainty and a definitive closure to the controversies of the parties involved.

Ultimately, the choice between arbitration and litigation will depend on factors such as the nature of the dispute, the parties’ preferences, and time and cost considerations.