Your Company Is Facing Arbitration

The First Questions Corporate Counsel Should Ask

Before deciding whether to commence an arbitration, or how to respond to one, the company should run an early legal and commercial assessment. That assessment should cover at least the following questions.

What does the arbitration clause mandate?

Start with the contract. The clause determines (a) which disputes are covered; (b) which parties are bound; (c) whether the arbitration is institutional or ad hoc; (d) which arbitration rules apply; (e) the seat and language of the proceeding; (f) whether the tribunal will have one or three arbitrators; and (g) whether negotiation, mediation or a waiting period is required before filing.

Related contracts deserve the same reading. In complex transactions, different agreements executed by the same or related parties may bear on the dispute.

In domestic cases the clause may point to a local institution, an international one or an ad hoc proceeding. Its exact wording determines how the case must be commenced and how the tribunal is appointed.

Has the company complied with notice requirements?

Many contracts require formal notice of breach, an opportunity to cure, escalation to senior management or a negotiation period before arbitration can begin. Skipping these steps can generate jurisdictional or admissibility objections and delay the proceeding. Counsel should confirm whether such requirements exist and to what extent they have been met.

Has the company already received a notice of dispute?

If a notice of dispute or a formal invitation to negotiate has arrived, deadlines may already be running: the deadline to appoint an arbitrator, the limitation period to file a claim, counterclaim or cross-claim, and any window to take part in pre-arbitral negotiations. Acting quickly at this stage matters.

Are there any representation requirements?

Some jurisdictions and some sets of rules impose requirements on who may act for a party in an arbitration, domestic or international. Before taking any step, counsel should confirm that the formalities are satisfied, whether by in-house or outside counsel.

The requirements can come from two independent sources: the law of the seat and the applicable arbitration rules. Either may limit representation. Some regimes allow parties to appear without counsel, sometimes under strict conditions; many rules require legal representation; and some rules or domestic norms require a particular professional license or admission in a specific jurisdiction.

Can the arbitration clause be amended?

In principle the clause is fixed. But arbitration rests on consent, so the parties can modify it at any time if every relevant party expressly agrees. In practice, amendments after a dispute has arisen are rare: once the conflict exists, the parties are anticipating litigation and their incentives have diverged.

How an Arbitration Begins

The formal proceeding usually starts when the claimant files a request or notice of arbitration under the agreed rules. If the clause requires pre-arbitral negotiations or other steps, the request cannot be filed until they are completed.

The first key milestone after commencement is the constitution of the tribunal, following the clause, the applicable rules and the law of the seat. In sole-arbitrator cases the parties may agree on the appointment; failing that, the institution or appointing authority usually selects. In three-member tribunals each party commonly designates one arbitrator, and the presiding arbitrator is then chosen by the two co-arbitrators or by the appointing authority.

Constitution can also involve conflict disclosures, challenges to proposed arbitrators and confirmation by the administering institution. Appointment deadlines are strict: under most rules and many domestic laws, a party that fails to nominate on time loses the appointment to the institution or the appointing authority. Deliberately withholding an appointment is not a viable strategy.

The scope of the first written submission depends on the applicable rules, but it should generally identify (a) the parties; (b) the arbitration clause; (c) the relevant contract; (d) the factual background; (e) the claims and relief requested; (f) the claimant's position on seat, language and tribunal; (g) any nominated arbitrator; and (h) the amount in dispute.

The respondent is then invited to answer, and may raise jurisdictional objections, defenses and counterclaims. The deadline follows from the applicable rules or from the calendar agreed with the tribunal. Depending on the rules, the answer may also state the respondent's position on the constitution of the tribunal, the seat, the language, the governing law and the relief sought.

Before filing or responding, corporate counsel should (a) preserve relevant documents and communications; (b) identify the key internal witnesses; (c) prepare a preliminary chronology; (d) assess the merits and potential counterclaims; (e) calculate the principal financial exposure; (f) determine whether urgent measures are needed; (g) assess the opposing party's solvency and assets; and (h) prepare an initial budget and reporting structure.

In domestic cases, confirm as well that the dispute is legally capable of arbitration under local law. Some matters touching public policy, or rights the parties cannot freely dispose of, remain reserved to courts.

How Long Does Arbitration Take?

Duration depends on several variables, though arbitration is generally faster than full judicial litigation. A focused case may take roughly 12 to 18 months. A complex one, with multiple parties, jurisdictional objections, heavy document production or expert evidence, can run two years or longer.

Some institutions offer expedited procedures for lower-value or simpler disputes; the 2026 ICC Rules, for instance, reworked both their expedited track and their timetable mechanics. The parties can also agree to fewer submissions, limited evidence or a documents-only case.

The main factors driving the timetable are (a) the complexity of the dispute; (b) whether the tribunal has one or three members; (c) the arbitrators' availability; (d) the institutional rules; (e) the number of written submissions; (f) the scope of document production; (g) the number of witnesses and experts; (h) interim applications; (i) any bifurcation of jurisdiction, liability or damages; and (j) the parties' procedural conduct.

A typical proceeding moves through the request and answer, appointment of the tribunal, an initial procedural conference, written submissions, document production, witness statements and expert reports, an evidentiary hearing, final submissions and the award. Procedural incidents, arbitrator challenges, jurisdictional objections and requests for judicial assistance can all stretch the calendar, especially where a local court rather than the tribunal must resolve them.

How Much Does Arbitration Cost?

Total cost turns on the amount in dispute, the applicable rules, the number of arbitrators and the complexity of the evidence. No abstract number is reliable, but the categories are predictable.

Institutional and tribunal costs

Institutional arbitration brings administrative fees, filing fees and, where one is appointed, the tribunal secretary's costs. Institutional or ad hoc, the parties pay the arbitrators: fees, expenses and, where applicable, emergency arbitrator fees. Because arbitrator fees can be substantial, whether commencing a case is financially sound may turn in part on how many arbitrators the clause requires.

Some institutions calculate fees from the amount in dispute; others use hourly rates or their own schedules. Since fees, advances and payment calendars differ meaningfully between institutions, the cost structure deserves attention when the rules are being chosen, if the clause has not already fixed them.

Payments are not concentrated at the end. Rules commonly require initial filing payments and advances through the early phase and the course of the proceeding. Advances on costs are usually payable in equal shares regardless of how the tribunal ultimately allocates costs in the award, and a claimant should budget for the possibility that the respondent will not pay its share: under many rules the claimant must then cover the unpaid portion for the case to continue, without prejudice to reimbursement at the end.

Legal fees

External counsel fees are often the largest single component. They scale with the duration of the case, the number of submissions, the evidence required and the extent of hearings and procedural disputes.

Hearing and expert expenses

In court litigation, the infrastructure of a hearing is publicly provided. In arbitration it is not: hearings and related logistics are borne by the parties. Additional line items include hearing facilities, damages and valuation experts, technical experts, foreign-law experts in international cases, interpreters and translators, transcription, document-management platforms, and travel and accommodation for the party, its counsel, witnesses and experts.

Complex disputes often require party-appointed experts, legal, technical or financial. Their reports and hearing appearances can be a substantial cost, driven by the complexity and rarity of the issues they must address.

Strategic financial considerations

Before filing, a prospective claimant should test whether the expected recovery justifies the likely spend. Compare (a) the amount realistically recoverable; (b) the expected legal and tribunal costs; (c) the likelihood of success; (d) the respondent's solvency; and (e) the availability of assets against which an award could be enforced. A favorable award against a party with no reachable assets may not have been worth obtaining.

Selecting the Arbitrators

The tribunal normally has one or three members. The number is usually fixed in the clause; where it is not, the rules or the law of the seat supply a default, most often three.

Whatever the number, most rules and domestic laws give the parties a role in constituting the tribunal, and it is among the most consequential decisions in the case: it affects duration, cost, conduct and, often, outcome.

It is generally wise to appoint only after retaining arbitration counsel. Industry or contract expertise alone is not enough, because arbitrator selection involves procedural and strategic considerations specific to arbitration. Experienced counsel can evaluate a candidate's background, availability, procedural approach, potential conflicts and fit for the dispute. This matters because removing an arbitrator once appointed is difficult and requires specific legal grounds.

Relevant selection criteria include (a) experience in commercial arbitration; (b) knowledge of the governing law; (c) familiarity with the industry; (d) language skills; (e) experience with the type of claim and damages involved; and (f) the candidate's publications on the relevant industry, governing law or disputed issues. In a domestic case, command of local contract, corporate and procedural law may weigh most. In international cases, experience coordinating different legal systems, languages and enforcement jurisdictions may matter more.

Designating an arbitrator requires contacting the candidate directly with basic information about the dispute. Once the arbitrator confirms availability and willingness, the party can no longer communicate with them outside the proceeding, but those initial contacts are a necessary step before designation.

Availability deserves real weight. A highly qualified arbitrator with a saturated calendar can extend the timetable considerably.

Governing Law, Seat and Hearing Location

These three concepts anchor any arbitration, and they can be decisive from the outset: they shape arbitrator selection and the procedural rules that govern the dispute from day one.

Governing law

The governing law fixes the parties' substantive rights and obligations, and is generally chosen in the clause. It determines whether the contract was breached, how it is interpreted, which damages are recoverable and to what extent, and whether liability limitations hold. It can also drive force majeure, termination rights, mitigation, good faith, the validity of particular provisions and limitation periods.

Domestic arbitrations are usually governed by local law; in international cases the parties may have chosen a foreign law. Matters get harder when the contract is silent, especially internationally: the tribunal then determines the applicable law, drawing on the arbitration rules, the law of the seat and choice-of-law principles. That means uncertainty, cost and preliminary briefing. Counsel should spot the gap early and build the argument for the most favorable candidate law.

Seat of arbitration

The seat is the legal home of the arbitration, generally named in the clause. It supplies the procedural law of the proceeding and identifies the courts with supervisory authority: the courts that hear arbitrator challenges, assist with evidence, grant certain interim measures and decide applications to set the award aside. The seat therefore conditions the validity and course of the arbitration and the degree of judicial intervention to expect.

If the clause does not name a seat, the tribunal or the institution will determine it under the applicable rules, usually after hearing the parties. An unnamed seat leaves a significant element of the dispute outside the parties' control, so the gap should be identified as early as possible.

Hearing location

Hearings can happen in a different city or country, or virtually, without changing the legal seat and regardless of the substantive law. The hearing location is where examinations, expert presentations and procedural meetings physically or virtually occur, and it is chosen for practical reasons: location of witnesses, counsel and documents, facilities, travel costs, time zones, interpretation needs. The seat has legal consequences; the hearing location is mainly operational.

Clauses often leave the hearing location open. The tribunal then decides after consulting the parties on efficiency, cost and convenience. The gap matters less than a missing seat, but it still affects travel, scheduling, witness preparation and overall cost.

Evidence, Witnesses and Document Production

Arbitration is document-intensive. As soon as a dispute is foreseeable, the company should preserve digital and physical records: contracts and amendments, emails and messaging apps, invoices and payment records, project reports, internal presentations, board and management communications, accounting records, technical documents, and notices of breach or termination.

Counsel should identify the main document custodians and make sure preservation actually happens, ideally coordinating collection with arbitration counsel so that privileged or confidential material is not disclosed unnecessarily.

Document production varies with the rules, the tribunal and the case. In international arbitration, parties typically request specific documents or narrow categories that are relevant and material, and tribunals entertain objections based on privilege, confidentiality, proportionality, burden or lack of possession. Domestic proceedings call for a case-by-case analysis, since evidentiary approaches differ by institution and procedural framework.

Witnesses should be identified early. Key personnel may leave the company while the case is pending; find them before that happens.

Interim Measures and Asset Protection

Most arbitration rules and domestic laws empower arbitrators to order interim measures. They are commonly sought early, and can be essential where waiting for the award would render the arbitration pointless or expose the company to serious commercial, evidentiary or financial harm. Assess the need for urgent relief as soon as the dispute arises or becomes foreseeable, particularly where assets may be dissipated or information destroyed.

There is no universal rule on where to ask. Depending on the rules and the law, the request may go to (a) an emergency arbitrator, where the rules provide one; (b) the arbitral tribunal; or (c) a competent court. Where the tribunal is not yet constituted, a court is almost always an available route.

The measures themselves vary: preservation or freezing of assets, preservation of evidence, orders maintaining the status quo, protection of confidential information, security for costs, restraints on transfers of shares or property. Tribunals and courts typically weigh urgency, the likelihood of serious or irreparable harm, a prima facie case on the merits, proportionality and whether the measure would prejudge the dispute.

The choice of forum is strategic. Tribunal orders may not be enforceable in every jurisdiction; courts have more coercive power over local institutions, companies and banks, but their proceedings are usually public and follow their own requirements. Seeking judicial help does not mean abandoning the arbitration: Argentine courts, for example, can grant or assist with interim measures in support of arbitral proceedings.

Damages, Interest and Legal Costs

A claimant may seek monetary or non-monetary relief, within the limits of the contract and the governing law. The substantive law restricts the categories of recoverable damages and governs how they are proved and calculated; the arbitration clause may add its own limits, expressly or by narrowing the disputes it covers.

For a claimant, an early assessment of recoverable damages feeds directly into whether filing makes commercial sense. For a respondent, an early quantum analysis frames the company's exposure and its settlement options.

Depending on contract and law, remedies may include (a) unpaid contractual amounts; (b) direct losses; (c) lost profits; (d) costs of replacement performance; (e) delay damages; (f) contractual penalties; (g) declaratory relief; and (h) specific performance where available.

The company must establish both entitlement and amount. Complex claims usually need an independent damages expert, above all where lost profits, business valuation, foreign currency or long-term projections are involved. Retain the expert early, so the legal theory and the numbers grow up together; when experts arrive late, the claimant risks anchoring the case to calculations made by non-experts. Respondents should retain their own experts to test assumptions and propose alternative valuations.

Interest can be a significant share of the final award, for periods before and after it. Submissions should address the applicable rate, whether interest is simple or compound, the currency and the date from which it runs.

The tribunal may also allocate legal and arbitration costs. Many tribunals apply some version of costs follow the event, but recovery is neither automatic nor complete: relative success, proportionality of fees and procedural conduct all count.

Award, Recognition and Enforcement

An arbitral award is binding. Unlike court judgments, awards are generally not subject to appeal on the facts or the law. Limited recourses for correction or interpretation exist, but they are narrow and never reopen the legal findings.

Think about enforcement from the beginning of the case, not after the award. Recognition and enforcement of foreign awards runs through the New York Convention of 1958, which provides the framework in its contracting states, that is, in the vast majority of countries. Enforcing a foreign award under the Convention is usually simpler than enforcing a foreign judgment.

Once the award is rendered, the prevailing party will typically seek recognition and enforcement where the debtor's assets sit. The enforcing court will not rehear the merits; it reviews only whether one of the limited grounds for refusal applies under the treaty or domestic law.

Setting Aside an Award

When the award arrives, review it fast: the relief granted, payment deadlines, the damages arithmetic, whether the tribunal failed to address any claim, and whether the award contains computational errors. Then map the available procedures for correction, interpretation or an additional award, the deadline and grounds for annulment, and the location of assets for enforcement. Post-award deadlines are short and often run from notification.

A party may seek to set the award aside before the courts of the seat. The grounds vary by jurisdiction but are narrow: typically the invalidity of the arbitration agreement, irregular constitution of the tribunal, defective notice, or public policy. A prompt and careful reading of the award matters because many legal systems treat decisions beyond or outside what the parties requested as annulment grounds, as the Santiago Court of Appeals recently reminded the region in the Australis case.

Practical First Steps for Corporate Counsel

When a company faces a potential arbitration, counsel should (a) review the arbitration clause and every related contract; (b) identify notices, negotiation requirements and other pre-arbitral steps; (c) confirm whether the clause fixes the rules, governing law and seat; (d) preserve potentially relevant documents and suspend routine deletion where appropriate; (e) prepare a clear chronology if the company will claim; (f) identify key witnesses and document custodians; (g) assess claims, defenses and counterclaims; (h) calculate the likely financial exposure; (i) investigate the opposing party's solvency and assets; (j) determine whether urgent interim relief is required; and (k) avoid communications that could create admissions or waive rights.

Early coordination between management, in-house counsel and arbitration counsel materially affects the cost, duration and outcome of the proceeding.