1. ODR for Industrial Disputes: Summary of Cybersettle/ICDR program being piloted by GE Oil & Gas in Italy
Michael McIlwrath
Senior Counsel – Litigation
GE Oil & Gas
29 March 2010

2. Dispute resolution as a Process The GE Experience

3. Early Dispute Resolution (EDR) at GE
1996–’97: systematic use of mediation
In 1998: company-wide Early Dispute Resolution (“EDR”) program tied to GE’s Six Sigma Quality initiative
Europe: In 1999, implemented EDR at GE Nuovo Pignone, Italy (now GE Oil & Gas)
Immediate and lasting results:
, 80% reduction in litigations (143 pending litigations in 1999 to approx in 2002, and then consistent over time)

4. ICDR Manufacturer / Supplier Online Disputes Resolution Programme (BETA)
Notes:

5. Problem Statement
>2,000 supplier-manufacturer claims (from over 100,000 purchase orders, $6 billion/year)
Most claims < $10,000 (delivery or manufacturing defects, scraps, etc.)
Large volume in Italy (Italian language as means of communication)
No process to resolve fairly and quickly. (Courts and traditional arbitration expensive.)

6. Concept: Systemic Solution Arbitration (rapid + low cost)
File Case
Online Negotiation
Claim Settlement
In Case Online Negotiation Unsuccessful
Online
Arbitration (rapid + low cost)
Arbitral Award

7. History of Implementation
2001 – Concept floated internally, faced resistance from purchasing managers
2002 – ODR system proposed to Italian-based mediation institution
2006 – System developed but not activated
2007 – New provider, ICDR (international branch of AAA) together with Cybersettle
History in ODR, volume claims management
2009 – System operational; Italian engineers as adjudicators for ODR
2010 – Pilot case + inclusion of ODR in purchasing terms and conditions

8. Supply Chain Online Protocol
ICDR WebFile Pleadings and Supporting Documentation
Full support for Italian language
Online Negotiation
Documents Only Arbitration
Arbitrators are Italian engineers

9. Phase 1: Online Negotiation Phase 2: Online Arbitration
ODR Process & Timing
Case initiation via WebFile; 12 days for responses and counterclaims
Phase 1: Online Negotiation
On-line Negotiation – 12 days
No settlement = Online Arbitration based on documents already submitted via WebFile
Phase 2: Online Arbitration
Award rendered within 30 days from Arbitrator appointment

10. Program Highlights WebFile: – claims filed completely online
– all documents uploaded/downloaded online
– review case progress and view multiple cases
– communicate with ICDR via message center
Telephone facilitation available for:
– online filing
– uploading supporting documents
– answering questions

11. Program Highlights – Continued
Fair
– competent arbitrators (engineers)
– brief reasoned award
Efficient
– 36-day negotiation period + 60-day arbitration period
– $500 USD negotiation fee (50% each party)
– additional $1,000 USD arbitration fee
– administrative cost includes arbitrator fees
– fees recoverable in arbitration (loser pays)