Settling International Conflicts in Business

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  • 0:00 International Business…
  • 0:24 What Is the ICC?
  • 1:29 Dispute Resolution in the ICC
  • 3:54 Lesson Summary
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Lesson Transcript
Instructor: Lee Davis

Lee has a BA in Political Science; and my MA is in Political Science with a concentration in International Relations.

This lesson will cover the role of arbitration by the International Chamber of Commerce and the various methods that are used for resolving disputes in international business. We will look at the main ways in which arbitration and dispute resolution can be done.

International Business Arbitration

Imagine that you have a large multi-national corporation that makes pool noodles. You're doing business in many different countries and with many different companies. However, your company is in a dispute with another company over the supply of foam for the production of the noodles. How will this dispute be solved? Which arbitration method will you use?

What Is the ICC?

The International Chamber of Commerce (ICC) is the largest business organization in the world. It's a representative body that is made up of thousands of international companies in over 130 nations and spans all sectors of private business. The ICC has three main activities:

  • Rule setting, which is when they create rules and regulations which member corporations follow.
  • Dispute resolution, which is when they try to solve disputes among member companies.
  • Policy advocacy, which is when they advocate for changes in the business policies of national governments to make them more business friendly.

The ICC is the main authority in making policy and rules concerning business transactions in the international community. While these are completely voluntary for companies to follow, there are so many companies that follow these rules that most companies choose to do so to make business simpler. Each member company has the ability to advocate for change in the ICC, and to shape what issues the ICC will focus on in the future.

Dispute Resolution in the ICC

The International Court of Arbitration (ICA) of the ICC helps to solve difficult issues in international business. It's a private procedure that is both a binding and enforceable decision. The ICA has received over twenty thousand cases since its founding in 1923, and has seen a noticeable increase in cases over the past decade. The ICA has also increased its presence to over 85 countries with offices and arbitration trainers in most of these nations.

The ICA provides, as its main objective, arbitration for member companies. Arbitration is the most common and efficient method of dispute resolution. It's both a binding and final decision that is subject to enforcement worldwide. In arbitration, the parties agree to bring in a neutral third party. What makes arbitration different from other dispute resolution methods is that the arbitrator has the power to impose an award. Unlike mediation, arbitration ensures that there will be a final result even though the parties lose control over what the outcome is.

One form of arbitration is mandatory arbitration, a form of arbitration in which the parties agree in advance to arbitrate any disputes that may arise. This would happen when two companies agree to do business with each other and decide not to use the court system to solve any disputes that may arise from their business transactions.

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