Pretend you were a Danish businessman/company considering to start a legal procedure
against a Japanese company/businessman regarding the breach of a sales contract. How
would you choose between going to court (in Japan) and starting an Arbitration procedure
and why?
Arbitration is the process where parties to a dispute present their own argument to a practitioner who is called “the arbitrator”. The arbitrator then makes a decision on the case for the parties and this decision is binding upon the parties after the dispute. A problem with going to court for an enforcement is that the defendant (in this case Japanese company) can simply ignore the judgement because it is not part of the jurisdiction in Denmark. Also, the risk to the claimant is that, as soon as the defendant suspects that he is about to be sued, a call to the bank and the press of a button will result in the claimant’s ‘security’ being spirited away into the safety of an offshore numbered account. This could create significant problems for the Danish company. There could also be significant problems because the Japanese company can have local legal advisors which is much better at Japanese law. In many ways, the Danish company is worse off in a Japanese court.
Therefore Arbitration could seem like a better idea, because then a third party would choose the result
ing binding settlement.
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