Journal of Legal, Ethical and Regulatory Issues (Print ISSN: 1544-0036; Online ISSN: 1544-0044)


Legal Implications of International Commercial Agency Contract Arbitration in The Light Of UNCITRAL Rules

Author(s): Nashat Mahmoud Abdalla Jaradat

International Commercial Arbitration has unbounded itself from Domestic laws to a certain degree particularly by permitting people from different culture and jurisdiction brought together by nexus of commercial relationship to settle their disputes in such a way and manner that would leave the parties feelings that private system of resolving dispute has served justice to them. It affords parties the opportunity to determine how any dispute arising from their contract can be settled. Parties to an international commercial agency transaction are in most cases confronted with the challenges of jurisdictional laws and regulations subjecting them to litigation outside their arbitration agreement in event of dispute. Findings reveal that prevalence of such drastic exposure is caused by lacunas in parties’ choice of applicable arbitration rules in their arbitration agreement. Therefore, UNCITRAL Arbitration Rules has been advanced for parties in international commercial agency transaction as a panacea to address the challenges. Purpose: The argument of this paper is that arbitration still remains as the most effective means of settling international commercial agent contract dispute if UNCITRAL Arbitration Rules are adopted by the parties to the contract. Its objectives are to advance the adoption of UNCITRAL Arbitration Rules in international commercial agency arbitration agreements as a choice of arbitration rules in settling international commercial agency contract disputes against the backdrop that jurisdictional laws and regulations are in recent times underpinning the use of arbitration as a means of settling international commercial agency contract disputes and thus subsequently raising challenges such as using the lacunae related to jurisdiction primarily to shield contractual breaches and such acts yield in the parties facing hardships, the compulsion to resort to Domestic Courts for dispute resolution that would lead to challenges in enforcing the judgement in other jurisdictions. Hence, the author would justify the position under the UNCITRAL Arbitration Rules to address these legal issues and challenges that may arise in international commercial agency contracts subject to arbitration agreement. Research Methodology: This paper will not only rely on the UNCITRAL Arbitration Rules alone but also text books written by renowned authors on international commercial arbitration, internet resources, regulations, statutory and case law authorities to determine the use of UNCITRAL Arbitration Rules in commercial agency contract in a cross-border trade. The information was examined with the view to make recommendations for the best practice. Findings: Parties to an international commercial agency contract prefer to adopt arbitration as a means of settling any dispute arising from their relationship. Notably, one among the essential issues the parties that has agreed to submit any dispute arising from their international commercial agent contract to arbitration is the choice of applicable arbitration rules. However, some of the arbitration rules did not comprehensively address envisaged materials issues that may arise in an international commercial agency contract arbitration proceeding, but in such circumstances of lacunas refers the parties to resort to national courts. Hence, adopting UNCITRAL Arbitration Rules in an international commercial agency arbitration agreement has been shown to adequately address such lacunas. Implication: The paper focuses on the present situation of law by addressing the technical difficulties and implications surrounding the dispute resolution in agency contracts by addressing certain inefficiencies in the practices adopted and the position of law, focusing on the UNCITRAL Rules and correlated Regulations governing arbitration. Relying on the factors and examples cited in the paper, it can be established that despite any negative imposition, the law regarding arbitration in agency contracts can co-exist with the other domestic and international laws and the courts would further base its actions and approach respecting the international set standards even when it can run to a few dead-blocks that the law would not suffice in providing a remedy to. Hence, it is well observant that the paper can provide for a ground of justification along with a reasonable and rational approach to draw correlations to the domestic and international laws regulating the developing sector of international agency arbitration. Thus, the review of available documents is limited to UNCITRAL Arbitration Rules and by implication cannot be generalized into a broader context. Novelty: The paper addresses these primary aspects focusing on arbitrations arising out of agency contracts, along with addressing technical and procedural impediments that can arise due to the nature of the contract, by providing sufficient justification and remedies under the UNCITRAL Model. The paper would revolve around such agency-contract arbitrations by providing for new practical interpretations by contributing to the growing field of legal jurisprudence around commercial laws and dispute resolution. The Author has also proposed a few practices that can be followed by nations to ensure a better legal position when it comes to commercial agency contract arbitration. Hence this paper when compared to the current situation, is imperative as it creates and enters a niche sector of dispute settlement by focusing on agency contract arbitrations. Originality: The paper contributes the research about the prevailing issues in commercial agency contracts as arbitration will guarantee parties autonomy and control over how their disputes will be settled using UNCITRAL Arbitration Rules.

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