DISPUTE RESOLUTION THROUGH ARBITRATION IN SOUTH EAST ASIA

Currently threatened by geoeconomic difficulties -barriers, tariffs and trade restrictions-, regulatory volatility -regulatory fragmentation, state protectionism, unpredictable application-, technological contingencies -cyber threats, critical infrastructure, uncontrolled artificial intelligence-, environmental hazards -extreme weather events, scarcity of natural resources, disorderly transitions- and geopolitical instabilities -active and latent armed conflicts, global corporate threats, rivalry China Occidente-, demands, as recommended by the Global Risks Report 2026, from the World Economic Foruma high degree of resilience and sustainability. And above all, risk management.

 

One of the most important issues in international trade is, indeed, risk management, particularly regarding disputes arising from the interpretation or execution of contractual clauses. This involves anticipating, as far as possible, through appropriate provisions, their resolution in the quickest and most effective way. These provisions include various types of mechanisms, judicial or arbitral, the choice of which can—and should—be made at the appropriate time, taking into account the specific circumstances of each case, such as the identity and nationality of the parties, the legal nature of the relationship, the specialization of the judge and the confidentiality of the proceedings, and the enforceability of the award. election which, as it points out Faustino CordónIt frequently leans in favor of arbitration, as a consequence, on the one hand, of a certain mentality in favor of this route; and, on the other hand, of the absence of a supranational jurisdiction of private law.

 

This pro-arbitration mentality can be explained by several reasons, among which is the neutralityThat is, the possibility of choosing a neutral forum, a neutral arbitrator, and a neutral law, thereby reducing the danger of "Home Court Advantage"But it's not the only one, of course, as there are others, such as the specialization of the arbitrator versus the ordinary judge, who is usually more generally trained; the confidentialitySince arbitral proceedings and awards are, unlike ordinary proceedings and judgments, private; speedwhich means that the duration of an arbitration, being a single instance, does not exceed 12 months, while that of an ordinary trial can reach 6 years or more; and the enforceability, which obliges the signatory countries of Convenio de Nueva York, dated June 10, 1958, on the recognition of foreign arbitral awardsto recognize these awards and enforce them just like national judgments, without reviewing the substance of the matter.

 

While resorting to arbitration seems almost always advisable in all types of international commercial transactions, it is even more so in those carried out in unfamiliar markets. One of these latter markets has been, until now, the Sudeste AsiáticoAlthough today we are fortunately facing a market that, both because of the economic, commercial or strategic potential it represents, and because of the explicit recognition of this potential by the Estrategia Española para Asia Pacífico 2026-2029It is receiving increasing attention. However, some companies, perhaps due to their limited knowledge of it, still view it as a distant market where uncertainties outweigh certainties; hence the importance of highlighting those of a institutional -political stability-, for all Economic commitment -solid growth: 4,5% by 2026-, operating -one-stop shop- and, above all, legal -arbitration-, linked in this case to the numerous arbitration centers existing in the region: SIAC, VIAC, AIAC, BANI, PDRCI, THAC.

 

While Singapore International Arbitration Center (SIAC) It is undoubtedly the best known of them all because of the cases it decides annually, some 886 in 2025, related to commerce, construction, navigation, intellectual property or technology, the Vietnam International Arbitration Center (VIAC), with 475 in this same year, is the fastest growing in the area, after the SIACwith awards ranging from construction to finance, including services. For its part, the Asian International Arbitration Center (AIAC), based in Kuala Lumpur, as well as the Indonesia National Board of Arbitration (BANI), based in Yakartaeven though they outnumber the VIACOf the approximately 600 courses held during the same period, the topics covered have been almost exclusively focused on construction. And the Philippine Dispute Resolution Center Inc. (PDRCI) and the Thailand Arbitration Center (THAC)Although they resolve a significantly lower number of cases than the other Centers, they nonetheless contribute to regional legal certainty.

 

Antonio Viñal

Avco Legal

 

 

Key points and frequently asked questions about this analysis

1. Why is arbitration the preferred method in Southeast Asia?

Primarily due to the neutrality it offers by avoiding the "Home Court Advantage", in addition to the specialization of the arbitrators, the confidentiality of the processes and the speed, allowing disputes to be resolved in less than 12 months compared to the several years of ordinary justice.

2. How important is the New York Convention in these markets?

It is fundamental because it obliges signatory countries to recognize and enforce foreign arbitral awards as if they were national judgments, guaranteeing that the ruling is effective without the need to review the merits of the case in the country of enforcement.

3. Which are the most dynamic arbitration centers in the region?

El SIAC en Singapur It remains the leader in volume and diversity of subjects, while the VIAC en Vietnam It stands out as the fastest growing, encompassing sectors ranging from construction to finance.