Arbitration is commonly perceived as a process that begins with the formal filing of a claim before an arbitral tribunal. However, decisions made long before that moment arrives can maximize the chances of success and minimize risks.

It is important to keep in mind that, unlike traditional litigation, in arbitration the rules are agreed upon in advance by the parties involved. For example, when negotiating a contract, it may include clauses specifying that any dispute arising from it will be resolved through arbitration. In addition, it may incorporate the rules governing the process, the seat of arbitration, the number of arbitrators, and even the language in which the proceedings will be conducted.

This early phase is critical because it will shape the process and influence opportunities for negotiation and amicable resolution before formal litigation begins. Some of its implications include:

• Defining the formal conditions for access to arbitration (e.g., filing deadlines, limits on third-party intervention, notice requirements, etc.).
• Determining the level of flexibility or rigidity the process will have, which can affect the efficiency, cost, and visibility of the case.
• Influencing the profile of eligible arbitrators and their areas of expertise, a factor frequently cited as key to the outcome of the dispute.

Respecting and Complying with the Clauses

Before initiating arbitration, the parties must carefully review their arbitration agreement and any previously established negotiation obligations. This will allow them to anticipate conflict scenarios and establish mechanisms for the prevention or early resolution of disputes. This is not only relevant if you intend to file a claim; it is also crucial for countering a claim, for example, by demonstrating that one of the pre-arbitration contractual conditions was not met.

It is important to remember that arbitration is only the final step within the Alternative Dispute Resolution (ADR) methods, as attempts may have previously been made to resolve the dispute through conciliation, mediation, or negotiation. In fact, one must consider whether the clauses require compliance with contractual prerequisites or the initiation of local legal proceedings before going forward with arbitration.

A publication in the Mexican Yearbook of International Law[1] explains that failure to follow these steps may affect not only admissibility but even the tribunal’s jurisdiction to hear the case. This means that if the preliminary stages are not properly completed, the tribunal may outright reject consideration of the merits of the dispute without even entering an analysis of the merits. This reminds us that procedural issues can be just as decisive as the substantive examination of the facts and evidence.

Even in domestic systems, the concept of early dismissal in commercial arbitration recognizes that decisions made in the initial stages can determine whether a claim is even considered by an arbitral tribunal or is dismissed prematurely[2].

No one signs a commercial agreement expecting to one day have a conflict or dispute with a supplier, but the reality is that there is always a possibility that this will happen. Therefore, it is best to have well-defined processes for resolving disputes when they arise and to make strategic decisions during contract negotiations. The choice of clause, the determination of prerequisites, and the evaluation of admissibility conditions are early steps that define, often decisively, the outcome.

Organizations that view arbitration as a comprehensive strategic process that begins before a claim is filed will be better positioned to protect their interests and maximize their chances of success in any dispute.

If you have any questions or would like more information, don’t hesitate to contact us.