The Moderating Effects of Fairness of Arbitration and Speed of Arbitration on Korean Traders' Attitudes toward Arbitration

Abstract

Arbitration plays a relatively important role in the resolution of disputes as the volume of exports and imports increases in the cases of Korea. The number of cases filed to the ICC Court of Arbitration in connection with Korea outweighs those of Japan and China during last decade. For the understanding of Korean commercial arbitration, authors construct the conceptual model of arbitration, where two types of intentions, the intention of dispute resolution and resolution intention by arbitration, are closely related to sustainable transactions in the context of Korean trade. The conceptual model of arbitration also includes the speed of arbitration and the fairness of the arbitral award as moderating variables, since both variables are expected to have a non-negligible effect on the trader's intentions of dispute resolution and the intention related with the choice of arbitration. Our findings show that two types of intentions have an impact on the intention of sustainable transactions. Furthermore, the fairness of the arbitral award has moderating effects on the relationship between the two types of intentions of dispute resolution and the intention of sustainable transaction decreases as the fairness of the arbitral award increases. On the other hand, the speed of arbitration does not influence the relationship between the two types of intentions of dispute resolution and the intention of sustainable transactions. These results have important implications for Korean traders. First, Korean traders perceive that arbitration is an effective resolution device. Second, unlike the usual argument of the rapidity of arbitration, Korean traders do not perceive that the arbitration is speedy.