Young ICCA Conference: Arbitration and Litigation - Are They Friends or Foes?

Join us in Banja Luka for an engaging discussion on the dynamics between arbitration and litigation.

Hosted by Young ICCA and the Faculty of Law of the University of Banja Luka, this conference will feature interactive discussion exploring the risks and benefits of choosing between arbitration and litigation. Additionally, we will examine the interplay between courts and arbitral tribunals once the arbitration process has commenced.

We look forward to seeing you in Banja Luka!

POST EVENT REPORT 

YOUNG ICCA CONFERENCE: ARBITRATION AND LITIGATION – ARE THEY FRIENDS OR FOES?

Written by Derviš Klokić (Junior Associate at Dimitrijević and Partners) and Dragana Nikolić (Young ICCA Representative for Europe)

The conference discussing the role and relationship between litigation and arbitration took place on November 4, 2024, at the Faculty of Law of the University in Banja Luka (Republic of Srpska, Bosnia and Herzegovina). This event attracted young practitioners, scholars, and students from across Bosnia and Herzegovina and the surrounding region, highlighting the growing importance of arbitration in CEE. Together with the panelists, they discussed the significance, challenges, and evolving practices related to the dynamics between courts and tribunals, both in Bosnia and Herzegovina and globally.

INTRODUCTION

The conference commenced with a warm welcome from Prof. Zoran Vasiljević, PhD, Vice-Dean of the Faculty of Law. He emphasized the critical role of arbitration in modern legal education, noting that it has become an integral part of the Faculty’s curriculum, reflecting its increasing importance in resolving disputes outside of courtrooms. Prof. Vasiljević encouraged ongoing research and education on arbitration to ensure that the legal community is well-prepared for its growing significance in both domestic and international matters.

Following Prof. Vasiljević’s opening remarks, Dragana Nikolić, a regional representative of Young ICCA, introduced the organization and its initiatives to the audience. She elaborated on Young ICCA’s mission to support emerging arbitration professionals through networking, education, mentorship, and publication opportunities. Nikolić highlighted the organization’s role in fostering the next generation of arbitration experts and creating platforms for young practitioners to connect with peers both in the region and globally.

PRESENTATIONS BY PANELISTS

The first part of the conference, dedicated to the panelists’ presentations, was expertly moderated by Irena Radić Babić, a Teaching Assistant at the Faculty of Law. She ensured that the order of presentations flowed smoothly and facilitated a meaningful exchange of ideas among the panelists. Radić Babić encouraged each panelist to elaborate on each other’s points, promoting interaction and critical reflection.

The panelists were the following:

• Stevan Dimitrijević, Senior Partner at Dimitrijević and Partners,

• Daniel Dózsa, Partner at Queritius, and

• Stefan Dobrijević, Research and Teaching Assistant at Wirtschaftsuniversität Wien.

   

The key points presented by these panelists are outlined in the following section.

Stevan Dimitrijević: Prejudices and Efficiency in Arbitration

Stevan Dimitrijević opened his presentation by addressing common misconceptions about arbitration. While he argued that arbitration is more efficient than litigation, he also offered thought-provoking suggestions on how the process could be further improved.

Dimitrijević underscored the expertise of arbitration as an advantage over litigation. He also explained that arbitration offers flexibility in both procedural rules and timelines. The parties involved in arbitration can select their arbitrators and agree on a schedule that meets their needs, further enhancing the speed and effectiveness of the process.

Additionally, Dimitrijević noted that while some cases may take longer than expected, arbitration generally provides better control over the proceedings. He pointed out that delays often arise in national courts due to heavy caseloads, whereas arbitration allows for a more streamlined process. He also addressed the annulment of arbitral awards by courts, stating that the limited scope for challenges provides arbitration with a level of finality and certainty that can be reassuring for businesses engaged in cross-border trade.

On the other hand, one of the most critical issues raised by Dimitrijević was the challenge of obtaining interim measures. He pointed out that while interim relief in arbitration is essential, the mechanisms for securing such measures can be inconsistent across jurisdictions. He recommended development of a more standardized system for interim measures to ensure that arbitration remains a viable option for businesses with urgent needs.

Lastly, Dimitrijević addressed concerns regarding the selection of arbitrators. He highlighted the issue of single arbitrators handling multiple cases simultaneously and questioned whether they can devote the necessary time and attention to each case. He emphasized the importance of selecting arbitrators who are not only experienced but also capable of dedicating sufficient time and resources to complex disputes.

Daniel Dózsa: Perspectives from the EU and Hungary

Daniel Dózsa shifted the focus to the regional and comparative perspectives of arbitration, particularly concerning the EU, Hungary, and Bosnia and Herzegovina. 

He began by referencing the EU’s judicial efficiency report, which criticized Bosnia and Herzegovina's court system for its inefficiencies, especially in commercial disputes. Dózsa noted that the lengthy waiting times for second-instance judgments in Bosnia—often exceeding five years—underscore the necessity for alternative dispute resolution mechanisms like arbitration.

Dózsa also addressed the domestic consumer protection law, which includes provisions for resolving disputes through arbitration. While the law is in place, he emphasized that its practical implementation remains limited, highlighting the need for greater awareness among businesses and consumers about the benefits of arbitration.

In contrast, Dózsa highlighted the advancements in Hungary, which has adopted more efficient arbitration practices aligned with European standards. He suggested that Bosnia and Herzegovina could benefit from implementing similar reforms to streamline the arbitration processes and enhance their appeal to international businesses. He pointed out that Hungary, as an EU member, has developed a robust arbitration system supported by clear legal frameworks that foster confidence in arbitration.

He raised several points regarding sector-specific arbitration, focusing on areas such as energy and trade disputes involving foreign parties. Dózsa argued that arbitration is particularly well-suited for these cases due to the specialized knowledge required in these sectors and the often international nature of the disputes. He echoed Dimitrijević’s emphasis on the importance of selecting the right arbitrator with expertise in specific fields to ensure effective and fair resolutions.

Stefan Dobrijević: The Role of Courts and Tribunals

Stefan Dobrijević provided a perspective from Austria as he explored the complex relationship between courts and arbitration tribunals. 

Dobrijević noted that courts play a limited yet important role in arbitration. He then discussed the legal procedures surrounding the constitution of arbitral tribunals, interim measures, challenges to domestic arbitration awards, and the enforcement of foreign arbitration awards, explaining the impact of Austrian courts on these processes.

Dobrijević stressed that although Austria’s system is relatively efficient, certain areas—such as the setting-aside process for arbitral awards—could be streamlined to ensure quicker and more effective resolutions.

Additionally, Dobrijević addressed the regulatory framework in the Republic of Srpska, identifying several areas where the local legal infrastructure could be enhanced to better support arbitration, suggesting that Austria may serve as a valuable example. His proposals included improving recognition and enforcement processes, as well as advocating for clearer procedural rules and more consistent communication between courts and arbitral bodies.

Following Dobrijević’s presentation, a coffee break was scheduled, providing attendees with the opportunity to network and discuss the issues raised informally.

INTERACTIVE DISCUSSION

In the second part of the conference, an interactive Q&A session was moderated by Dragana Nikolić and Derviš Klokić. Several important topics were raised by the moderators and the audience, allowing the panelists to provide further insights based on their professional experiences.

One key question addressed the commercial parties' understanding of arbitration clauses. The panelists agreed that while arbitration clauses are essential for ensuring the smooth operation of arbitration, many businesses do not fully appreciate their significance. The panelists emphasized that commercial parties should be more proactive in incorporating arbitration clauses into their contracts, as doing so can save time and resources in the long run. Additionally, the panelists shared "war stories" related to this topic to illustrate their points.

Another issue discussed was the use of arbitration versus litigation in specific types of disputes, particularly in the construction and energy sectors. The panelists concurred that arbitration is often the preferred method for resolving these disputes due to the specialized knowledge required and the complexities involved.

The discussion also addressed the costs associated with arbitration and litigation. While acknowledging that arbitration can be more expensive than litigation, the panelists concluded that it is often more cost-effective than traditional litigation, especially considering the potential for faster resolutions.

Additionally, the panelists emphasized the importance of party autonomy in arbitration, highlighting the significance of case management conferences and the necessity of selecting knowledgeable and experienced arbitrators who can efficiently handle complex cases by sharing their best practices.

Finally, the discussion touched on promoting diversity within the field of arbitration and increasing the involvement of local practitioners. The panelists advocated for greater representation of underrepresented groups in arbitration panels and leadership roles.

To close the event, all participants were invited to a cocktail reception.

CONCLUSION

The conference concluded with a collective recognition of the growing significance of arbitration as an effective and efficient dispute resolution mechanism. The panelists highlighted several areas for improvement, particularly in the selection of arbitrators, the handling of interim measures, and the enforcement of arbitral awards, offering actionable insights for enhancing legal frameworks. The event provided a valuable platform for legal professionals, academics, and students to exchange knowledge and contribute to ongoing efforts to refine arbitration practices both in Bosnia and Herzegovina and globally.