Our country's courts are not only overloaded with work but also, in many cases, do not offer the trust, reliability, and justice that Guatemala demands.

In business, and concerning all private initiative, this lack of trust results in a consequent and inevitable disincentive to negotiate, make contracts, and to do business in general.

In a system where there is no security with respect to contracts, there is also a big opportunity for those who want to break the law.

It would seem that the problem has no immediate solution, and that it requires that a radical change be brought about in the system. This change is essential in the area of private contracting, where arbitrage offers a more immediate and, now, much more appealing solution, in view of the new legislation in this field.

Arbitrage is an alternative covenant between two or more persons, created to seek solutions to problems, in which an arbitration court, once agreed, has exclusive jurisdiction of the dispute.

In countries like England, France, and the United States, arbitrage has been employed with spectacular success for many years. Concerning international negotiations, arbitrage has become the mechanism of choice to solve controversies, to such a point, that experts in the field say that eight out of ten international contracts have a clause of submittal to arbitrage.

In the private and commercial contracting environment, the solution to the problem of justice management requires a change of paradigms among businessmen, in order to recognize that there is an alternative mechanism to solve their conflicts.

In 1995, Congress approved the "Law of Arbitrage". This new law is based on the recommendations made by the Commission of the United Nations for Mercantile Rights in its Uniform Law of Commercial Arbitrage. This allows our legislation to be parallel and up-to-date with the present regulations in the field.

An arbitrary award has the same impact than a sentence dictated by a court of justice. Once an arbitrary procedure is set, its main objective is to pronounce an award that, for legal purposes, is as valid as a judicial sentence.

The new Law of Arbitrage also covers Conciliation, which is basically a non-jurisdictional means by which the two parties agree, upon making a contract, to seek conciliation. The conciliator is really an expert in negotiation who is not related to any of the parties and is therefore absolutely objective.