There are many reasons to designate Finland as the seat of international arbitration. Finland has ratified the New York Convention without any reservations, thus maximizing the enforcement potential of the parties’ arbitration agreement and any resulting award. Equally important, the relevant legislative framework and national court system are hospitable to and supportive of international arbitration. Neutrality, lack of corruption, safety and accessibility add to Finland’s strengths as arbitral seat. Finally, our high education level, coupled with a solution-oriented cultural approach to problem solving, contribute to the availability of well-qualified arbitrators and counsel for international arbitration proceedings.
Arbitration – an alternative to litigation
Arbitration is an alternative dispute resolution method to litigation in state courts. It is generally considered as the most effective means of resolving both domestic and international commercial disputes. Any dispute that can be settled by agreement between the parties may be referred to arbitration for final decision.
Arbitration has many advantages over litigation in state courts:
- Speed. Arbitration is faster than litigation.
- Flexibility. Arbitration is based on party autonomy. Parties may choose their arbitral tribunal. Further, they are free to tailor the arbitral proceedings to best suit their individual needs.
- Expertise. Parties and FAI may select arbitrators with optimal expertise, experience and other qualifications to resolve a specific dispute.
- Confidentiality. Contrary to court litigation, arbitration is a confidential method of settling business disputes.
- Finality and enforceability of the award. An arbitral award constitutes a legally enforceable decision. It is binding on the parties to the arbitration, and cannot be appealed on its merits. Pursuant to the New York Convention of 1958, arbitral awards are recognized and enforced in most countries in the world.
Parties may agree to submit to arbitration by inserting an arbitration clause in their main contract, or by entering into a separate arbitration agreement. In addition, an arbitration clause may be included in the bylaws of a limited liability company or other corporate entity.
FAI – The Arbitration Institute of the Finland Chamber of Commerce
FAI administers domestic and international arbitrations governed by its Rules. Further, it appoints arbitrators in ad hoc cases when the arbitration agreement so provides, and acts as appointing authority under the UNCITRAL Arbitration Rules.
Established in 1911, FAI is one of the world’s oldest arbitration institutes. Since 1919 it has operated in connection with the Finland Chamber of Commerce. However, being an autonomous and impartial arbitration body, it carries out its functions independently of the Finland Chamber of Commerce.
FAI has adopted its own Arbitration Rules and Rules for Expedited Arbitration. Both sets of rules were revised in 2013. Fully consistent with the best international norms and practices, the new Rules seek to promote the classic virtues of arbitration as an expeditious, cost-efficient and confidential method of resolving commercial disputes.
In cross-border disputes, FAI administers the arbitral proceedings with the assistance of its Board including both Finnish and non-Finnish nationals. FAI has longstanding experience in attracting reputable arbitrators from various jurisdictions to arbitrate its cases.