The credit crisis and associated financial turmoil over the last couple of years has meant that businesses have had to focus increasing attention on grappling with disputes. This has kept dispute resolution lawyers in international law firms in London busy, especially at a time when deal flow for transactional lawyers has not been as steady as before. As disputes become a higher priority for clients (and a more important practice area for their legal counsel), it is crucial that the available choices in international dispute resolution – and the key factors that drive such choices – are well-understood.

Litigation or arbitration? This is the recurring choice that faces in-house counsel as to the preferred method for resolving disputes for cross-border transactions. The pros and cons of both methods have been the subject of long debate. The choice is not straightforward. Champions of arbitration espouse its flexibility and bemoan the rigidity of courts. Supporters of litigation, on the other hand, complain that arbitrators tend to compromise and 'split the baby'. To a large extent, these arguments merely reflect the individual experiences of the lawyers voicing them. Much will depend on the geographical location of the parties and their assets.

Ultimately, the choice between litigation and arbitration should boil down the priorities of the parties (and not the biases of their counsel). As a rule of thumb, litigation is preferable where parties attach primacy to procedural certainty, value the option of summary judgment and require the coercive powers of state courts. The freedom of parties from anywhere in cross-border disputes to choose the commercial court in London is an attractive one. The key issue will be where the judgment is to be enforced. The reciprocal enforcement of state court judgments, at least outside the European Union, is heavily reliant on bilateral, or regional multilateral, treaties. In the absence of such treaties, a court judgment may be difficult to enforce where the assets are located.

Arbitration has a clear advantage over litigation, in such cases, when it comes to enforcement. The New York Convention 1958 creates a global network for the recognition and enforcement of arbitral award. The New York Convention has been signed by 144 countries, the United Arab Emirates being one of the most recent states to accede.

Arbitration may also be the better option where privacy, flexibility (including choice of language) and industry expertise are the dominant considerations. Because of the consensual nature of arbitration, parties are free to agree almost any aspect of the process, for example presentation of evidence, form of submissions, document production, etc. This level of flexibility is not paralleled, and is often simply not available, in proceedings before state courts. Also, parties often feel reassured and sometimes empowered when they have a say in who will adjudicate their dispute. The importance attached to the choice of arbitrators, based on their reputation, nationality, expertise and/or qualifications, is not to be underestimated.

Arbitration has become increasingly popular over the last two years. The London Court of International Arbitration saw a 26% increase in arbitration referrals in 2009 as against 2008. Of those referrals, there was also an increase in the number of arbitrations with a London seat (approximately 89% of 272 referred cases in 2009, against 80% of 215 referred cases in 2008). The International Chamber of Commerce (ICC) also saw an increase of approximately 23% in referrals over the last two years: in 2008, the ICC accepted 663 cases, which increased to 817 in 2009. Statistics are not available for the location of counsel to the parties but typically, an international law firm in London will be advising at least one of the parties to an arbitration with a London seat.

Once a decision is made as to the most suitable method of resolving a particular dispute, this is not the end of the matter. Myriad follow-up choices arise. If litigation, the courts of which jurisdiction? If arbitration, which arbitral seat and institution? These choices are not a matter of mere convenience of choosing a location halfway between the headquarters of the parties. They represent tactical decisions with significant implications that need to be thoroughly considered. For instance, the seat of an arbitration is a crucial factor. It determines which courts have supervisory jurisdiction over the arbitration. Similarly, the choice of a state court for litigation determines the applicable procedural rules, probably the language, and the opportunities for cross-border enforceability – as well as the all-important speed of the process, or lack of it.

When advising on the opportunities and pitfalls of the different available options, a tailored legal response requires an analysis of the variables that exist between competing jurisdictions and the compatibility of each with the law chosen to govern the substance of the disputes.

It is important for lawyers to focus their attention on understanding the key factors that drive corporate choices about international dispute resolution. The International Arbitration Survey by the School of International Arbitration at Queen Mary University seeks to accomplish just that.

The International Arbitration Survey canvasses the views of in-house counsel worldwide to determine which factors influence their decisions. This year's edition of the Survey, titled 'Choices in International Arbitration', aims to address themes such as:

- Policies about dispute resolution: whether organisations have policies in place regarding the dispute resolution mechanisms to be incorporated into their contracts and how they implement those policies.

- Choice of law governing the substance of the dispute, the seat of arbitration and arbitration institution: the main reasons why parties choose the key aspects of an arbitration including legal considerations, commercial factors, convenience, neutrality and proximity to evidence and witnesses.

- Selecting arbitrators: key attributes for arbitrators, concerns regarding arbitrator performance and proposals for increased transparency.

- Confidentiality: the importance organisations place on confidentiality and how corporate expectations interact with increasing challenges to confidentiality.

- Effectiveness: how proactive corporate choices seek to maximise the benefits of dispute resolution and minimise the pitfalls including concerns regarding cost and delay.

The survey questionnaire can be accessed at http://www.arbitrationonline.org/survey and corporate counsel are strongly encouraged to participate. Those who wish to contribute have until the end of June to complete their responses. The report is expected to be published in autumn 2010.

There is a dearth of empirical data in this area, and the survey should provide valuable information that will better inform the choice for international dispute resolution as between state court litigation and arbitration.

Dipen Sabharwal and Clare Connellan are associates in the dispute resolution practice of White & Case in London.