Here’s Why More Corporate Counsel Are Turning to Arbitration

No one can reliably predict the next business disruption. But you can be prepared by ensuring your contracts are built to handle whatever comes.

In these times of uncertainty, arbitration provides tools that litigation either lacks or can’t guarantee—greater control over the process, flexibility to adapt when conditions shift, and broader confidentiality protections to keep disputes out of the spotlight.

But those advantages only materialize if you draft for them deliberately. If it has been more than a year since you have reviewed the dispute resolution clauses in your standard templates, start there. Make sure they are designed to deliver the results and protect your business needs.

Control the Controllables

Start with your decision-maker(s). In court, you get whoever is assigned; potentially a judge with scant expertise in your industry and a docket backed up for years. In arbitration, the parties can choose decision-makers with deep knowledge of the relevant issues.

You also get to decide the size of the tribunal. A sole arbitrator might be best for a straightforward, lower-value dispute, or a three-member panel when the complexity or stakes justify it.

Let’s say you’re in a tech licensing dispute. Being able to select an arbitrator who knows licensing inside and out and with good availability makes a real difference both in the quality of the result and how long it takes to get there.

Then, lock in your seat. The “seat” (or judicial home) of arbitration determines the applicable legal and procedural framework that governs the proceedings, including how much local courts can intervene and how easily an award can be enforced. Pick a seat with arbitration-friendly courts, limited judicial intervention, and a strong record of enforcing awards, and you’ve built in a structural advantage before the dispute even starts.

Consider that same hypothetical tech licensing dispute. Selecting a well-established neutral seat means neither party’s home courts control the process, and in the cross-border context, if the seat is one of the more than 170 contracting states party to the New York Convention, which allows only very limited grounds for refusing enforcement, any binding arbitral award is highly likely to be enforced in any of those states.

Remember discovery. US litigation discovery is notoriously expensive, with sweeping document requests, material and sometimes massive document review costs (even with the use of the latest AI tools), and the risk of publicly exposing sensitive information that has nothing to do with the actual dispute. Arbitration lets you build in relevance, materiality, and proportionality standards and limits during contract negotiations.

Practice tip: Control requires proactive drafting. None of this happens by itself. A boilerplate arbitration clause that defaults to three arbitrators regardless of the dispute’s complexity, or that names an arbitrator selection process without considering if qualifications should be addressed, is just checking a box.

The same goes for designating a seat without considering judicial intervention risks or enforcement. Although arbitration allows you to contract for limits on discovery scope, most institutional rules won’t deliver those limits automatically—you need to draft them in.

Build these advantages into the agreement with intention. If a dispute arises, pick an arbitrator who will actively manage the case and enforce the boundaries you have set.

Flexibility When Needed

Rigid processes don’t hold up well because business environments keep shifting. Arbitration lets you adapt, including on timing.

While it isn’t always faster than litigation, arbitration gives you real influence over the procedural timetable. Expedited procedures, deadlines that reflect actual business needs, and hands-on procedural oversight can keep a case moving efficiently.

Consider a hypothetical supply chain deal where currency swings, energy price volatility, or new carbon border taxes have rendered the original pricing unsustainable. In court, you might be looking at years of litigation while the underlying business falls apart. An expedited arbitration with the right arbitrator could resolve the dispute in months, creating an opportunity for the parties to restructure the deal and preserve their relationship.

Practice tip: Flexibility requires the right institutional framework. Not all arbitration institutions offer the same procedural toolkit. Understand the various institutional rules at your disposal before choosing one.

Confidentiality Practices

With the near-global adoption of social media and the increase in online consumption of news, public scrutiny has intensified dramatically in recent years. Investors, customers, and employees now rapidly react to public filings.

A lawsuit that once might have gotten a brief mention in a trade publication can go viral in hours, potentially creating a public relations disaster. The old adage rings true: don’t air your dirty laundry in public. Customers or business partners often consider business disputes a red flag, signaling instability in the organization. This is only exacerbated when sensitive business information or conflicts with contracting partners are put on display.

Let’s say there’s a public fight with a supplier over defective goods that were put into the marketplace. Customer trust and brand reputation are put at risk, directly impacting the business’ bottom line. While there are options for keeping disputes under seal in litigation, sensitive information may nonetheless be exposed.

Even if you win such a case, the reputational damage is often already done. But with the right protections, arbitration keeps most sensitive documents and information out of the public sphere. This sometimes includes the fact of the dispute itself; this limits collateral damage.

Practice tip: Confidentiality protection isn’t standard. Protection levels vary by institution and jurisdiction—some provide robust defaults; others give you almost nothing. Before selecting an institution, compare their rules on confidentiality to understand the scope of protection and where the gaps are. If confidentiality really matters to a particular deal or relationship, choose arbitration and draft express provisions into the contract that ensure the confidentiality of any dispute.

In summary, the businesses that survive and even thrive through periods of business volatility and disruption don’t need a crystal ball—they need the infrastructure to respond effectively when the unexpected occurs. Leveraging a well-drafted arbitration clause may be a critical part of that infrastructure.

By taking control of the process, building in flexibility, and securing confidentiality protections long before a dispute arises, you put your business in the best position to manage disputes in a manner focused on achieving your business goals.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Randa Adra is a partner at Crowell & Moring representing global clients in complex international commercial and investment arbitration and high-stakes cross-border disputes.

Ashley R. Riveira is a counsel at Crowell & Moring advising global clients on complex cross-border business disputes, with a focus on international arbitration and litigation.

Edward Norman is a counsel in Crowell & Moring’s international dispute resolution group, where his practice focuses on international arbitration.

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