One of the most important benefits of arbitration, a faster, lower cost, and superior alternative to litigation, is that it strives to provide parties with the same outcomes they would have received in court. Large-scale commercial contracts often include arbitration clauses in the hope of avoiding large-scale commercial litigation. But critics are starting to find that the quicker, cheaper, more private aspects of arbitration have turned into lengthy, expensive and often public quasi-trials. Complaints have come that arbitration can be as expensive as or more than litigation.
You are confused to decide on the best option to resolve your dispute. Mediation is appealing because it would allow you to reach a collaborative settlement, but you are worried it could end in impasse. Arbitration would conclude your dispute conclusively, but it wouldn’t give you much say in the outcome.
When a contract is drawn up, friendly parties fail to seriously consider the possibility of a dispute arising. Without such consideration, the parties end up in court as the default mechanism for disputes or will have a “copy & paste” inappropriate adhoc arbitration clause, which turns out to be a disaster. Often the ADR aspects of a contract are ignored or thrown in at the last minute by people negotiating the contract who have no concept of how ADR works.
So, what can you do to make the arbitration process actually work as intended? The time to control the ADR process is up front in the contract drafting.
Anyone who signs a contract should be aware of the natural tendency to underestimate the likelihood of a dispute. When this occurs, the logic of efficient dispute resolution is likely to prevail. The problems that are sometimes associated with arbitration could be avoided if parties would give more thought to the type of dispute resolution they desire. Arbitration or ADR is not something imposed on the parties; it is something the parties impose on themselves. Therefore the parties are the architects of their dispute resolution system. The parties should “tailor ADR clauses…to their specific desires and the needs.”
But many parties apparently are not aware of the extent to which arbitration can be tailored to fit particular situations, or simply do not consider the prospect of a future arbitration to be important enough to invest some modest time and effort into considering what is likely to transpire in the event of a dispute.
Role of IIAM
The solution to the problem is relatively easy. IIAM would help you draft an effective dispute resolution agreement / clause that suit your needs and goals. IIAM believes that successful dispute resolution starts with drawing of a dispute resolution clause appropriate to the parties’ business needs and dispute resolution desires. In order to make the most of it, one must move beyond a “one-size-fits-all” view of arbitration and make deliberate process choices based on one’s goals and priorities. It could be arbitration, mediation or hybrid systems designed and structured, so that it suits your needs, and proceeds with the least hurdle and in a time bound fashion.
For more details, mail to firstname.lastname@example.org