INTRODUCTION Contributed by: Paul P. Jebely, Paul P. Jebely
The benefits of arbitration for aviation Historically, aviation industry market participants have been largely reticent towards due consideration of arbitration. Such resistance stems largely from cultural factors and has been fuelled by inertia and standard - ised documentation. Still, to seasoned deal-makers, litigation is often viewed as a last resort for settling contractual disputes after they arise, whereas arbitra - tion is often viewed as a tool for managing business relationships in the context of contractual disputes that may arise. In the complex and often turbulent landscape of cross- border aviation deal-making, the five key pillars of effi - ciency, confidentiality, flexibility, neutrality and finality serve to elevate arbitration as the preferred method of dispute resolution and as a sturdy foundation upon which rests what is by far the most expansive platform for enforceability around the world. Efficiency Arbitration can offer aviation market participants an effective antidote to the costly and time-consuming quagmire of litigation. It empowers these parties to shape the proceedings, curbing the scope of the dispute resolution process, and in turn, helping to reduce costs. Bypassing the often tortuous paths of court procedure, arbitration can assist in avoid - ing the pitfalls of delays and unanticipated costs. Of note, the traditional courtroom spectre of procedural gamesmanship or weaponisation of process is greatly diminished in arbitration. Moreover, the limited scope of discovery compared to litigation in some jurisdic - tions also serves to truncate timelines and preserve resources, thereby enhancing overall efficiency. This system thus preserves parties’ energies for their true purpose: reaching a fair and tenable resolution to their dispute. In arbitration, efficiency is not a mere buz - zword but a fundamental design attribute. Confidentiality Among other things, aviation’s volatile landscape of fierce competition and rapidly evolving dynamics necessitates a measure of discretion in handling con - tractual disputes. In most jurisdictions (most notable in the context of international aviation by published case volume being the United States, England and Canada), court proceedings, by their public nature,
able fact is that in many other industries the strain of litigation has helped usher in the renaissance of arbitration and mediation, which are now embraced as preferred methods for resolving complex transna - tional contractual disputes generally. The 20th century witnessed arbitration and mediation solidifying their place as the dispute resolution methods of choice in industries such as construction, commodities, ship - ping, and insurance, where the technical expertise of the arbitrator and mediator was highly valued; this was, in effect, what is now regarded as specialised arbitration and mediation. Indeed, this preference towards arbitration and mediation is not merely a sec - toral phenomenon, but rather an international trend. It is also worth noting that courts around the globe, both common law and civil law jurisdictions, increasingly advocate for or at least endorse arbitration, particu - larly in the specialised context. It is difficult to reconcile these facts with the fact that the vast global aviation industry somehow remained behind as one of the last nearly untouched frontiers of arbitration and mediation. Ignorance may have been an excuse, but no longer in the case of aviation attor - neys at least. It is, however, apparent that two factors influencing persistent inertia within some corners of the industry are reliance on precedent documenta - tion and, bluntly, the greater financial incentives often tied to litigation. On this latter, admittedly controversial point, it does often stem from entrenched litigation practices and the economic benefits they present to certain stakeholders, rather than an objective assess - ment of the benefits of arbitration and especially mediation to the parties involved. In the realm of aviation, evolution is inevitable. The his - tory of aviation shows that dismissing advancements based on past endeavours (especially in ignorance of their scope and calibre) while begging the nearly- rhetorical question “is it necessary?” often proves to be myopic in the end. Much like a finely aged wine poured afresh, these age-old methods of conflict res - olution have matured. They have rapidly adapted to the demands of our modern industry and era, particu - larly specialised arbitration and mediation as offered by The Hague CAA, and now offer a panoply of ben - efits to the aviation industry that warrant much better informed consideration than in days gone by.
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