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Arbitration in Banking Sector: Opportunities and Challenges
Herliana., SH., MCommLaw., PhD

Faculty of Law
Gadjah Mada University, Indonesia


Abstract

It is often maintained that innovation in financial sector is a reaction to an economically inefficient framework. However, no such reaction has yet occurred to the way in which financial services disputes are resolved. The finance sector has not embraced arbitration in the same way as other sectors, such as energy, insurance and shipping. The finance sector has acknowledged the increasing prevalence of arbitration as a means of dispute resolution by creating initiatives to encourage, and set rules for, arbitration within the sector. Unlike other sectors that rely heavily on arbitration, disputes in the world of finance have been settled through recourse to national courts of major financial center. The way financial and banking disputes are treated by courts are far from ideal. Judges are not trained to resolve financial disputes. The lack of necessary financial knowledge and technical capacities hinder their jobs to efficiently and structurally render judgments. The question that arise at this point is whether such expertise can be found in arbitral tribunals as an alternative to courtroom litigation. This paper will discuss whether advantages in arbitration be exercised and taken advantage to resolve financial service disputes. In addition, this paper will also analyze the effect of the lack of binding precedents in arbitration. This is because it generates significant concerns for banks and institutional investors that could be faced with arbitrating the same issue multiple times against different counterparties without the point at issue ever being resolved. A recent report suggests that awareness of commercial international arbitration within the banking and finance sector remains limited. The report highlights the untapped potential of international arbitration in financial disputes, and provides recommendations as to where greater use of it could be made. It would appear that awareness has increased, with a more recent survey indicating that those in the finance sector are more interested in arbitration than ever before. Research will be conducted through journals and literatures

Keywords: Arbitration, Banking,

Topic: Investment and Settlement Disputes

Link: https://ifory.id/abstract/4R8zATLDeKQf

Conference: The 1st International Conference on Trade, Business, Human Rights, and Globalization (ICTBHRsG 2019)

Plain Format | Corresponding Author (Herliana Herliana)

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