ADR-A CATALTST IN COMMERCIAL DEVELOPMENT (A CASE STUDY FROM UGANDA) BY JUSTICE GEOFFREY KIRYABWIRE

Introduction Vibrant commercial sector is critical to overall development of a nation There is need for an effective commercial legal system to enforce contracts Uganda economic indicators -average annual growth in GDP 6.9% -overall private investment as a share of GDP 76.8%

Poor contract enforcement mechanisms as a disincentive to commercial development 1.Few judicial officers to handle disputes -Delays -Case backlog -Self help techniques by disputants 2. Bureaucratic Judicial Procedures

Poor contract enforcement mechanisms as a disincentive to commercial development

3. Delays/Time

Poor contract enforcement mechanisms as a disincentive to commercial development

4. Lack of awareness of commercial law and practice by Judges and Magistrates 5. Problems of enforcement of Judgments. 6. corruption/corrupt Practices. 7. High Costs.

Poor contract enforcement mechanisms as a disincentive to commercial development

Effects of poor enforcement and dispute resolution mechanisms Leads to fewer investment and business transactions resulting in -loss of confidence in the system -Escalation of under hand business practices -Retardation of countys growth and development

Effects of poor enforcement and dispute resolution mechanisms

Traditional approach to dispute resolution The traditional approach is to resolve a dispute by going to court and suing However private sector perceptions of suing in the courts have not always been good though they have now greatly improved (review two studies in Uganda one in 1999 and the other in 2004)

Traditional approach to dispute resolution

What possible solutions exist? There is need to develop other dispute resolution mechanisms that are -efficient and accessible -Faster -cheaper

What possible solutions exist? 1. This where ADR comes in ADR can be defined as That ADR is a structured negotiation process whereby the parties to a dispute themselves negotiate their own settlement with the help of help of an independent intermediary who is a neutral and trained in the techniques of ADR

What possible solutions exist? There are various types of ADR i.e. -Negotiation -Conciliation -Mediation -Mini-trial/early neutral evaluation -Court annexed ADR -Arbitration

What possible solutions exist? 2. Enactment of a comprehensive and modern legal framework for the use of ADR outside court. -The Arbitration and Conciliation Act (Cap 4). Based on the UNCITRAL MODEL LAW. Centre for Arbitration and Dispute Resolution (CADER)

What possible solutions exist? 3. The enactment of a legal framework to allow for Court annexed ADR. -The Constitutional Commercial Division (Mediation Pilot Project Rules) Practice Direction legal Notice 7 of The Commercial Court Division (Mediation Pilot Project) Rules Statutory Instrument No 71 Of 2003

What possible solutions exist? Characteristics of the mediation pilot project i.It makes mediation compulsory before litigation (with strict time frames) ii.Mediation is managed by CADER under a strict code of conduct iii.Has CADER staff mediators who are free iv.Allows for enforcement as a consent judgment of the court.

Results of using ADR 1.Of cases that go straight to court -80% were settled by the Judges through ADR techniques leading to consent Judgments -Shows increased willingness of parties to settle disputes out of court even after filling a case. 2. Of cases that go to The pilot project

Results of using ADR

3. Of Cases that go to CADER as a Private ADR provider

Existing challenges and possible solutions. 1.Strong perceptions that Litigation is better than ADR Verner V Gen and Commercial invest. Trust (1894) 2 CH 239 at 264 Lord Justice Lindley A proceeding may be perfectly legal and yet opposed to sound commercial principles

Existing challenges and possible solutions. 2. ADR used as a time wasting fishing expedition. - Dunnett V Rail Track [2002] 2 All ER Inadequate ADR training 4. Sustainability and self-Funding

Conclusion With appropriate training and a good legal framework ADR can be a catalyst for commercial development by providing an efficient, expeditious and cost effective alternative mode of dispute resolution

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