Arbitration is one of the most sought-after Alternative Dispute Resolution mechanisms. It is however often misunderstood, as many assume that it is just a private version of a courtroom trial. In reality, it’s a distinct process with its own rules, benefits, and limitations. Here are common myths about arbitration.
- Arbitration Is Just Like Litigation
Reality: Arbitration does involve a neutral third party (the arbitrator) making a decision, however, it is less formal than a court trial. There are no strict procedural rules, as seen in litigation. Also, the hearings are often more flexible and faster.
- Arbitrators Always Favor Larger Corporations
Reality: Arbitrators are required to remain neutral during the entire process. They are also selected through a process that both parties agree upon. They must follow the rules of fairness and due process, ensuring that both sides are heard before making a decision.
- You Can’t Appeal an Arbitration Decision
Reality: While arbitration decisions are usually final, they can be challenged in court if there is evidence of fraud, bias, or serious misconduct by the arbitrator.
- Arbitration Decisions Can Be Ignored
Reality: Arbitration awards are legally binding and enforceable by courts in Ghana. If a party refuses to comply, the other party can take legal steps to enforce the decision.
- Arbitration Is Always Mandatory
Reality: It is true that many contracts include mandatory arbitration clauses, however not all disputes must go to arbitration. Parties may agree on whether or not to include arbitration clauses before signing a contract.
- Arbitration Takes Just as Long as a Lawsuit
Reality: One of the advantages of arbitration is its speed. Whereas litigation may take years to end due to procedural delays and other factors, arbitration is designed to resolve disputes within a much shorter period. The parties and arbitrator may set a timeline for the process making it much more efficient.
- You Need a Lawyer to Go Through Arbitration
Reality: While having a lawyer can be helpful, it’s not mandatory in arbitration. Many people represent themselves or use industry experts instead of hiring expensive legal teams.
- Arbitration Is Only for Businesses
Reality: Arbitration may be used in a wide range of cases, including employment disputes, consumer issues, and real estate conflicts. It is not limited to corporations alone; individuals may use arbitration to resolve personal and professional disputes.
- Arbitrators Are Not as Qualified as Judges
Reality: Arbitrators are often highly experienced professionals, in various fields relevant to the issue. They may be retired judges, senior attorneys and industry experts.
- Arbitration Is Not Recognized in Ghanaian Law
Reality: Ghana has strong legal backing for arbitration under the Alternative Dispute Resolution Act, 2010 (Act 798). The law ensures arbitration is a valid and effective way to resolve disputes.
