First concepts

What is arbitration?

Arbitration is a method of dispute resolution in which the decision is entrusted to an arbitral tribunal composed of one or more arbitrators.

The tribunal hears the parties, considers arguments and evidence, and resolves the dispute by an arbitral award. In voluntary arbitration, the parties’ agreement is the starting point; applicable law and rules define the tribunal’s powers and procedural safeguards.

Where an arbitral institution is involved, it administers the proceedings under its rules. This role is distinct from the arbitrators’ role of deciding the dispute.

In Mozambique: Law 11/99 allows disputes to be submitted to arbitration by express agreement and distinguishes an arbitral tribunal from a national court.

How does arbitration differ from court proceedings?

Court proceedings are decided by a State court. Arbitration is decided by an arbitral tribunal constituted under the agreement and law.

A national court forms part of the State’s justice system. An arbitral tribunal is constituted to exercise jurisdiction arising from the agreement and applicable legal framework. Parties may participate in selecting arbitrators and making procedural choices.

The two systems interact: courts may support arbitration, hear applications to set aside awards and assist enforcement. Arbitration does not mean an absence of judicial oversight.

In Mozambique: Mozambican law provides for judicial intervention in defined situations and regulates the award’s enforceability and enforcement.

How do arbitration, mediation and conciliation differ?

In arbitration, the tribunal decides. In mediation and conciliation, the aim is an agreement between the parties with a third party’s assistance.

In mediation and conciliation, a third party helps develop a solution but does not impose an award. Settlement requires the parties’ acceptance. In arbitration, the arbitrators decide the claims submitted to them even if one party disagrees with the outcome.

The distinction between mediation and conciliation varies between legal systems. Mozambican law describes mediation as seeking a solution satisfactory to both parties and conciliation as facilitating communication so they can reach agreement. UNCITRAL texts use the two terms interchangeably.

In Mozambique: Law 11/99 Article 60 describes these roles, and Article 61 contemplates mediator proposals. Article 2 allows consensual solutions before, during or after court or arbitral proceedings. This explanation follows Mozambican terminology without presenting it as a universal distinction.

Is the parties’ agreement required for arbitration?

Voluntary arbitration requires an agreement permitting the dispute to be referred to arbitrators. That agreement may precede or follow the dispute.

An arbitration clause provides for disputes that may arise from a legal relationship. A submission agreement concerns an existing dispute. The agreement’s validity, form and scope must be checked.

Where a valid agreement already covers the dispute, one party’s later wish to avoid arbitration does not, by itself, revoke it. Special statutory regimes must also be considered separately.

In Mozambique: Articles 4 and 10 address the agreement and its requirements; Article 12 governs its relationship with court proceedings.

Can every dispute be resolved by arbitration?

No. Whether a dispute may be submitted to arbitration is known as arbitrability and depends on the applicable legal framework.

Separate two questions: does the law allow arbitrators to decide this subject matter, and may these persons enter into the agreement? A signed clause does not remove legal restrictions.

Some matters are reserved to courts; others follow special regimes. Some rights cannot be freely disposed of or settled through an agreement involving concessions.

In Mozambique: Article 5 sets out the scope and exclusions. Article 6 contains rules on who may be a party, including public bodies.

Is arbitration always faster?

Arbitration may allow an efficient procedure, but speed is not guaranteed simply by choosing arbitrators.

Duration depends on the dispute’s complexity, arbitrator selection, participant availability and the evidence needed. A timetable tailored to the case can avoid unnecessary steps.

A simple debt claim and a dispute over defects in a major construction project require different work. In both, speed must allow each party a fair opportunity to present its case and respond to the other.

In Mozambique: The law includes expedition among its principles and regulates the period for the decision. These provisions must be read alongside procedural safeguards.

Is arbitration always cheaper?

Not necessarily. Cost should be assessed across the entire proceeding and against the dispute’s value and importance.

Costs may include arbitrator fees, institutional administrative charges, legal fees and expenses for experts, translation, travel and evidence. Some vary with complexity, duration and the number of arbitrators.

Comparison should also account for the indirect costs of a prolonged dispute. An estimate based on costs rules is not automatically the total cost or the final amount charged by the institution.

In Mozambique: For CACM-administered arbitration, its Costs Rules are an initial reference. The portal’s calculator provides an estimate only; actual amounts must be obtained from the Centre.

Estimate CACM costs

Is arbitration always confidential?

There is no universal answer. The law, applicable rules, party agreements and disclosure obligations must be checked.

A private hearing is one without public access. Confidentiality goes further: it concerns the use and disclosure of information, documents and decisions. Check who may access the proceedings and when disclosure is permitted or required.

In investment arbitration, transparency may provide public access to documents and hearings while protecting sensitive information. Expectations of privacy in commercial arbitration therefore do not necessarily carry over to investor–State disputes.

In Mozambique: Law 11/99 provides for privacy and confidentiality and contains specific rules on publication of the award and references for research and study.

Is an arbitral award binding and enforceable?

An arbitral award resolves the dispute with binding effects under the applicable regime. It is not merely a recommendation.

Compliance may be voluntary. If it is not, the interested party may need to seek enforcement under the law. The award may also be subject to specific review mechanisms.

Recognition, enforcement and setting aside serve different purposes. Internationally, the regime depends on the type of award, States involved and applicable instruments; domestic rules cannot simply be transferred to every case.

In Mozambique: Article 43 addresses enforceability by reference to deposit under Article 42; Article 44 provides for setting aside, and Articles 49–51 govern enforcement. The relevant conditions must be checked in the individual case.

How can arbitration’s suitability for a contract be assessed?

The choice should start with the contract’s needs and possible disputes, weighing admissibility, expertise, cost, procedure and enforcement.

Before drafting the clause, identify the parties, the nature and likely value of disputes, the countries involved and where enforcement may be needed. Then assess the institution or rules, number of arbitrators, seat and language.

These choices should work together. A clause suitable for a complex international transaction may be disproportionate for a small contract. Negotiation or mediation may also form part of the dispute-resolution strategy.

In Mozambique: The assessment starts with Law 11/99 and applicable special regimes. Where international elements arise, Chapter VIII of the law, the selected rules and relevant international instruments must also be considered.

Read the article on party autonomy