I. Cost Comparison: Arbitration has high upfront costs, while litigation may accumulate expenses over time.

Commercial arbitration typically charges fees based on the amount in dispute; the larger the dispute amount, the higher the arbitration fees, and arbitrator remuneration and administrative costs must be paid in advance. In contrast, litigation costs are lower but may accumulate more attorney fees and travel expenses due to first-instance, second-instance, or even retrial procedures. Although arbitration has high initial costs, its finality avoids subsequent procedural expenses; litigation, however, requires consideration of potential appeal costs. Enterprises should weigh short-term and long-term costs based on the dispute amount and budget.

II. Efficiency and Flexibility: Arbitration is faster, while litigation is constrained by scheduling.

Arbitration procedures are flexible, allowing parties to negotiate arbitrators, venue, and rules, typically concluding within 6-12 months, with finality preventing delays. Litigation, on the other hand, is affected by court scheduling and the appellate system; a first-instance trial may take 1-2 years, and adding a second-instance trial could take even longer. For urgent disputes, arbitration also allows for interim measures. However, the public nature of litigation facilitates the formation of precedents, making it suitable for complex cases requiring legal clarification. When efficiency is a priority, arbitration is the preferred choice.

III. Enforcement and Confidentiality: Arbitration has strong cross-border enforcement, while litigation relies on state machinery.

Arbitral awards are enforceable in over 170 countries under the New York Convention, making them suitable for cross-border commercial disputes; litigation judgments depend on judicial assistance treaties, with limited enforcement scope. Arbitration is confidential, protecting commercial reputation and trade secrets; litigation is generally public and may expose sensitive information. However, at the domestic enforcement level, court judgments have stronger coercive force, especially regarding asset preservation. Enterprises should assess the nature and region of the dispute to choose the path with the best enforcement guarantees.

IV. Strategic Recommendations: Choose Based on Dispute Type and Objectives

For high-value, cross-border, or confidential commercial disputes, prioritize arbitration; for low-amount, domestic, or precedent-guided disputes, litigation is more economical. It is recommended to clearly specify arbitration or litigation clauses in contracts and consult professional lawyers, combining industry practices and the counterparty's credit status to develop a tailored dispute resolution strategy.