Speed. Flexibility. Confidentiality. These are the three characteristics that distinguish arbitration from State Courts proceedings. Find out about the advantages for your business.
Are you doing business in Greece? Then consider seriously right at the beginning to discuss and agree with your business partner on an alternative dispute resolution. The excessive delays of Greek justice, along with a sterile bureaucracy, hinder the Greek civil courts’ efficiency, placing Greece, according to data from the World Bank, in the 155th position in the world among the countries that delay trials. We are happy to advise you on your alternatives and to draft and negotiate on your behalf the business contract in question.
How to keep your company out of court. 6+1 Questions and Answers (Q&A) for every entrepreneur.
Q: Why should someone choose another dispute resolution mechanism for their commercial disputes instead of State Courts proceedings (litigations)?
Α: Truth be told, State courts are consisted of excellent judges, well trained. As a rule, the more experience they have, the more specialized knowledge they acquire. But the main issue here is that there are times when constructive, for example, knowledge is needed to resolve the dispute. Of course, a judge is not required to have such knowledge. This is even recognized by the law, since it provides for the possibility of recourse to an expert to assist the judge. But this is not only time consuming but also costly. Thus, in a dispute between companies, there is a very serious risk to increase both the costs and the time until its final resolution.
This page contains an overview of all Q&As developed by ESMA per legislative act and instructions on submitting new questions to ESMA.
Q: Is there any other proceeding just for these business needs?
A: Of course there is, and it is known for years. Arbitration. Arbitration is an alternative dispute resolution method, but not before State Courts, but before civilians, under the condition that it has been agreed between the companies. What does this mean practically? Less bureaucracy, more speed, same results!
| Advantages of Arbitration
1. Choice of procedure 2. Flexibility 3. Speed 4. Confidentiality 5. Binding results |
Q: What is the difference between arbitration and litigation?
A: The differences are many, and all of them in favor of arbitration. First of all, the companies choose their arbitrator. Thus, an attorney-at-law, a doctor, an engineer or a person with expertise knowledge of finance and banking may be appointed as arbitrators. Moreover, the opposing parties can define the process and its timetables. Think of the benefits of your business if an award is rendered, for example, in 3 months, and not in 1.5 or 2 years, as it happens in State Courts. Finally, arbitration is a private procedure, in comparison with state courts procedure which takes place in the crowded courtrooms. Arbitration aims to safeguarding the strategic information of the opposing parties.
Q: Can I enforce an arbitral award?
A: Of course yes! The arbitral award is as binding for the opposing parties as state court decisions, and in no case considered inferior. Furthermore, it can be enforced in the same way and procedure.
Q: Companies in retrospect might have preferred arbitration to resolve their dispute. Why do they initially overlook it?
A: In Greece, it is true that companies are not that familiar with arbitration. Mainly, they are aware of the State Courts, but, when they find out about arbitration, they regret all these years of litigation. Further to that, when commercial contracts are being drafted, the dispute resolution clauses are the last to be negotiated, because maybe having a discussion about the possibility of a dispute is regarded as unlucky
Q: So putting in an arbitration clause is mainly a safeguard for companies?
A: It is definitely a safe choice. However, everything depends in the circumstances. For instance, dispute arisen out of invoices can be easily settled by issuing a payment order. Contrary to that, disputes regarding the execution of a construction should preferably be referred to arbitration. Of course, even the payment order is subject to the human factor of the judge. While it is generally a fairly rapid procedure, there plenty of times when the judges issue a payment order after 6 or 7 months, especially in large urban centers.
Q: How can companies be properly prepared regarding arbitration?
A: Most small and medium-sized enterprises are unfamiliar with arbitration. Therefore, if your company is contemplating entering into a commercial transaction, especially an international one, consult with a specialized attorney during the initial stages of negotiation instead of waiting until a dispute has arisen following the agreement. There are some issues that need to be given attention during the drafting of the arbitration agreement, such as the rules to be followed, the applicable law, the award, so as the arbitral procedure to be tailor-made to your needs.
In conclusion, commercial disputes can be complicated and expensive, but a well-drafted commercial agreement can simplify the process, help control costs and put your company in the best position for a successful resolution.
We remain at your disposal for any clarification and/or information.
Please contact us at [email protected] and/or +30 210 32 54 237.
Note: It is pointed out that the above outline of provisions is suggestive and summarizing and aims at providing a quick update in relation to the legal framework. Any subjection of your company to the above provisions and the conditions of this subjection constitute the object of a more complete analysis for which the provision of specialized legal advices is required. The contents of this newsletter do not constitute legal or tax advice and cannot be used as such. In case you require advice for your personal needs, please do not hesitate to contact us. Reproduction and translation for non-commercial purposes of this newsletter is permitted, provided that reference of the source is made and the editor (VAP LAW OFFICES) is informed and a copy is communicated to it ([email protected]).
