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ACCA Applied Skills · Corporate and Business Law (Global) · Alternative dispute resolution mechanisms

Imrie Ltd is choosing between arbitration and court litigation for disputes with a foreign supplier. Which of the following is a recognised advantage of arbitration over litigation?

A recognised advantage of arbitration is that proceedings are generally private and confidential, unlike most court hearings. It still depends on consent, involves fees and offers very limited appeal rights.

  1. AProceedings are generally private and confidentialCorrect
  2. BThe arbitrator's decision can always be appealed on its merits
  3. CArbitration is free because no fees are payable to arbitrators
  4. DArbitration can bind parties who never agreed to it

Explanation

Privacy and confidentiality are a recognised advantage, as court hearings are usually public. Arbitration is consensual, so it cannot bind non-consenting parties. Arbitrators charge fees, and appeal rights on the merits are very limited.

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