ALTERNATIVE MEANS OF DISPUTE RESOLUTION

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Presentation transcript:

ALTERNATIVE MEANS OF DISPUTE RESOLUTION

ARBITRATION Arbitration agreement always in writing Award is binding Agreement is voluntary Solution in the form of a contract A M I C B L E N S MINI-TRIAL MEDIATION NEGOTIATION

Negotiation The parties renegotiate to straighten up the situation Provides for a sincere effort of the parties to arrive at a solution Agreement is voluntary The solution is in the form of a contract

Mediation The parties appoint a neutral third party, a mediator to help them find a solution Agreement is voluntary The solution is in the form of a contract

Mini-trial Lawyers from both sides present legal and factual arguments and try to solve the problem with the help of a neutral third party Agreement is voluntary The solution is in the form of a contract

PROS AND CONS ?

Arbitration

ARBITRATION The parties agree in writing to subject their dispute to arbitration Before or after the dispute has arisen Options: Ad Hoc arbitration Institutional arbitration

Model Arbitration Clause or Separate Arbitration Agreement  Any dispute, controversy or claim arising out of or relating to this contract, or the breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the UNCITRAL Arbitration Rules as present in force. Parties may wish to consider adding: (a) The appointing authority shall be __________ (name of institution or person); (b) The number of arbitrators shall be __________ (one or three); (c) The place of arbitration shall be __________ (town or country); (d) The language(s) to be used in the arbitral proceedings shall be __________.

1. AD HOC ARBITRATION The parties furnish all of the administrative services needed Agree on the procedural rules (e.g. UNCITRAL Arbitration Rules) Formulate a mechanism for appointing the arbitrators > an odd number (1,3,5) Proceedings are confidential Not a commonly used procedure

UNCITRAL ARBITRATION RULES (=United Nations Commission for International Trade and Law) Originally intended for Ad Hoc arbitration Abided by arbitration institutions if the parties call for the procedures in their agreement No time limit for issuing a decision The arbitrators must consider custom and trade usage Considerable discretion to the arbitrators in determining the admissibility of evidence and witnesses The losing party will bear all of the costs unless the arbitrator believes they should be shared

2. INSTITUTIONAL ARBITRATION The parties appoint the arbitration institution The institution conducts the proceedings and manages the administrative aspects in accordance with its own sets of rules

American Arbitration Association AAA (NY) Arbitrators make a decision within 30 days Arbitrators may consider custom and trade usage in deciding the case The parties may present evidence and call witnesses or they may agree that the arbitrators’ decision will be based exclusevely on documentary evidence

International Chamber of Commerce ICC (Paris) Proceedings in any of its locations around the world Decision within 6 months, extension possible Under whatever law the parties select Custom and trade usage may be considered The right to present evidence and call on witnesses is left to the arbitrators’ discretion The parties may stipulate that decisions must be based on documents only

London Court of International Arbitration LCIA No set time limit, ”as soon as practicable” No provision on taking custom and trade usage into consideration The parties may present evidence but the arbitrators can prevent the cross-examination of witnesses The parties may stipulate that decisions must be based on documents only

ENFORCEMENT OF ARBITRATION AWARDS Arbitration Award is binding => It can’t be appealed unless the procedure was conducted formally incorrectly The award is confirmed by the court in the country where it is to be enforced

New York Convention, 1958 Applies to arbitral awards made in = The UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards Applies to arbitral awards made in any country adopting the Convention any non-signatory country when the arbitrating parties are from signatory countries The holder of a valid, binding arbitral award does not need to seek confirmation in the country where the award was given may take the award to another signatory country where it will be confirmed and enforced

NEW YORK CONVENTION ENFORCEMENT Country B Court recognizes and confirms Country A Company wins award Not necessary Enforcement Court confirms

PROS AND CONS ?

Pros and Cons of Arbitration International enforcement of awards Arbitrators are usually experts in the field => handling is professional Litigation is faster than court trials Procedure is confidential, not public Institutional arbitration is easy to the disputing parties Expensive Ad hoc arbitration is often cheaper than institutional arbitration but can be difficult to conduct