International arbitrations are a common ADR procedure to resolve commercial disputes, including Law 75 actions. There are many reasons to choose arbitration: no jury trial…the blessing of Supreme Court precedent and FAA preemption, a panel of experienced professionals, and presumably a quicker and more cost effective mechanism etc. It is no secret, however, that arbitration can be expensive, and often more so than court cases, but rarely do the parties foresee, at the time of contracting, the substantial costs and fees that must be advanced by the claimant to initiate an international arbitration.
For arbitrations under the International Chamber of Commerce (ICC), for example, the initiating party, which may be the aggrieved distributor, must advance up front the administrative fees to cover the expenses of the ICC and the arbitrator(s). When those fees approach 10% of the face amount of the distributor’s claim, well if you do the math, those fees can be substantial just to get “your day in court”.
So far, at least in commercial disputes, courts have been reluctant to invalidate ICC arbitration clauses as substantively unconscionable because of the substantial costs to arbitrate the dispute. Kam-Ko Bio-Pharm v. Mayne Pharma, 560 F. 3d 935 (9th Cir. 2009), citing, Green Tree Fin. V. Randolph, 531 U.S. 79 (2000).
