Arbitration
Definition of Succession Arbitration
Arbitration is a dispute resolution method where the disagreeing parties choose one or more arbitrators to settle their dispute, rather than going through the courts. The significant advantages of arbitration include its confidentiality, speed compared to judicial procedures, the customized approach in selecting the arbitrator (or arbitrators), and the fact that the arbitrator’s decision is, usually, final and binding.
In the context of an estate, arbitration can be chosen to resolve disputes related to the distribution of the deceased’s assets, the interpretation of the will, or other related issues. Given the often personal and emotional nature of these disputes, arbitration provides a more private and often quicker framework to find a resolution.
Succession Arbitration: An Alternative to the Judicial Route
The Limitations of the Judicial Path
The judicial path has certain limitations in estate matters: judicial proceedings are lengthy, costly, and generally public.
The Advantages of Succession Arbitration
Arbitration offers greater flexibility in this context. Parties choose their arbitrator, define the procedure’s rules, and determine the location and language of the arbitration. Arbitration is also faster than judicial proceedings, with better controlled costs. The confidentiality provided by arbitration is also a major advantage, allowing parties to resolve their disputes away from public eye.
Comparison between Arbitration and Mediation
While arbitration and mediation are both alternative dispute resolution methods, they differ significantly. Mediation is a non-binding process. It is possible that no agreement will be reached during the process, and the process may be terminated at any time by one of the parties or the mediator. Arbitration is a binding process where the arbitrator issues a legally binding decision.
In other words, mediation is focused on facilitation, while arbitration is decision-oriented.
The Succession Arbitration Process
Appointment of the Arbitrator or Arbitrators
The first step in the arbitration process is the appointment of the arbitrator. Parties can agree on a single arbitrator or, in some cases, three arbitrators. The advantage of having multiple arbitrators is that they can bring diverse perspectives and expertise, ensuring a comprehensive and balanced assessment of the dispute.
When it is decided to involve multiple arbitrators, each party selects one, and the two arbitrators then choose a third to act as the panel’s chairman. This structure aims to ensure impartiality and fairness in the process.
Arbitration Hearings
Arbitration hearings are scheduled. These hearings look like judicial trials. Parties present their arguments, submit evidence, and may cross-examine witnesses. The arbitrator ensures that the hearings proceed in an orderly and fair manner.
Arbitration Award
After the proceedings, the arbitrator or panel of arbitrators issues a decision, known as an arbitration award. This award is generally final and binding.
Consequences of Non-Compliance with an Arbitration Award
If a party fails to comply with the arbitration award, the other party can request a state enforcement authority to enforce it in most countries worldwide. Most jurisdictions recognize and enforce arbitration awards.
Succession Arbitration in Practice
Succession arbitration, although following a structured framework, requires careful preparation and a clear understanding of the steps to ensure its effectiveness.
Prerequisites for Effective Arbitration
Before initiating an arbitration process, it is mandatory for all parties to be informed and consenting. This means understanding the implications of arbitration, including the fact that it is generally a final and binding decision. It is also important to select an arbitrator or panel of arbitrators with the necessary expertise and experience in succession matters.
Arbitration Planning
Planning is an essential step in the process. It involves defining the dates, times, and location of hearings, as well as ensuring that all parties have been able to identify the necessary information and documents. Proper planning can help avoid unnecessary delays and ensure a smooth process.
Common Misconceptions and Errors in Arbitration
There is sometimes a misconception that arbitration is less formal or less serious than judicial proceedings. Although arbitration can be more flexible, it is equally binding and serious. Another mistake is underestimating the importance of choosing a qualified arbitrator.
Frequently Asked Questions about Succession Arbitration
When Can Arbitration Be Chosen?
Arbitration can be considered at any time, whether before the start of a judicial proceeding or during one. Often, parties agree to an arbitration agreement at the outset of their relationship, stipulating that any disputes will be resolved through arbitration. Arbitration can now even be directly provided for in the will.
How Long Does the Arbitration Process Take?
The duration of arbitration depends on the complexity of the dispute and the availability of the parties and the arbitrator. However, arbitration is generally faster than traditional judicial proceedings. Its timeframe is typically measured in months, whereas judicial proceedings can span years.
Who Can Request Arbitration?
Any party involved in a succession dispute can request arbitration, provided that all parties involved accept this method of dispute resolution. The deceased may have also included it in their will.
How Much Does Succession Arbitration Cost, and Who Pays?
The costs of arbitration vary depending on the duration, complexity of the dispute, and the arbitrator’s fees. Generally, the costs are borne by the party that loses the arbitration, but this can be negotiated and defined in the arbitration agreement.
Can an Arbitration Award Be Appealed?
The arbitration award is generally final and binding. However, in certain circumstances, it may be possible to appeal the award in the Swiss Federal Court, for example, in cases of clear bias on the part of the arbitrator or if the procedure was not followed correctly.
How Can the Impartiality of the Arbitrator Be Ensured?
The impartiality of the arbitrator is crucial to the integrity of the arbitration process. Arbitrators are usually required to disclose any potential conflicts of interest. Furthermore, parties often have the right to challenge an arbitrator if they believe that the arbitrator cannot be impartial.
