Author: Chul-Gyoo Park*
Published: June 2006
Dispute Resolution and Litigation
Parties who face a dispute and intend to resolve the problem through arbitration anticipate a resolution based on professional and fair proceedings that are provided by an arbitral institution. The institutions develop tested rules and accumulate case information over time and maintain experienced and knowledgeable arbitrators; more importantly, arbitral awards made through the institutions may obtain favorable recognition from national courts. Therefore, institutional arbitration, rather than ad hoc arbitration, is becoming the predominant method of arbitration on which parties depend for resolution of their disputes.
This article analyzes the features and developmental trends of institutional arbitration in the United States and Korea by examining the functions and achievements of their model arbitral institutions: the American Arbitration Association, a major provider of dispute resolution services in the United States, and the Korean Commercial Arbitration Board, the single arbitral institution constituted under the Korean Arbitration Act.
The American Arbitration Association (“AAA”) provides various services to help resolve a wide range of disputes. In addition to arbitration and mediation, it also serves as a resource for designing dispute resolution systems and setting up a process for elections. Furthermore, the AAA continually expands its functions and develops new services, such as state-of-the-art procedures for the dispute review board (“DRB”) process and the Independent Fact-Finding Services (“IFFS”). The AAA’s continual efforts to address potential conflicts before an impending crisis occurs are worthy of notice. Such efforts to provide various services are a significant reason why the American Arbitration Association has become one of the largest providers of dispute resolution services in the world. On the other hand, the services of the Korean Commercial Arbitration Board (“KCAB”) are limited to arbitration and mediation, in addition to free consultation by its staff members. Since Korea’s real history of its arbitration system is less than 50 years old and its arbitration cases are less numerous, the KCAB appears not to have any surplus ability to expand its functions.
The developmental trend of the two countries’ arbitral institutions is evidenced by the fact that arbitration case filings have increased rapidly in recent years. For instance, from 1990 to 2001, the American Arbitration Association administered some 1,170,000 cases, which was more than the number of cases handled by the AAA, in the previous 65 years since its inception.1 Similarly, during the same period, the Korean Commercial Arbitration Board handled some 1,300 arbitration cases, which was nearly two times the number of cases filed with the KCAB in the pervious 23 years since its beginnings.2 Therefore, arbitration is increasingly attracting public attention as an alternative dispute resolution method, and the ADR industry, including arbitration, is expected to continue to grow in both countries.
This article also discusses how and to what extent arbitral institutions in the two countries realize the goals (expeditiousness, cost effectiveness, and expertise, etc.) of arbitration, through an analysis of the achievements of model arbitral institutions in both countries.