RESOLVING INTERNATIONAL DISPUTES

RESOLVING INTERNATIONAL DISPUTES

Introduction:

International traders should prepare their dispute resolution during the negotiation or concluding a contract.

Dispute resolution is the process of resolving disputes between parties. As a general rule, a disagreement becomes a dispute when it is not possible for the parties to resolve it without resort to a formal resolution mechanism. Generally, what a dispute is and when it is deemed to have occurred is defined in the contract, often in a dispute resolution clause.

In the contract the parties should add the forms that wish the disputes were resolve; such as renegotiation, mediation or conciliation and sometimes commercial arbitration.

WORKING IT OUT-CONTRACTUAL FORESIGHT AND ADAPTATION CLAUSES

Adaptation clauses are used in contracts which are pretend to long enough time. Some examples of adaptation clauses are:

• Force majeure which frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, or an event; prevents one or both parties from fulfilling their obligations under the contract.

• Escalator clause guarantees a change in the agreement price once a particular factor beyond control of either party affecting the value has been determined. An important example of this is a contract that adjusts for inflation

• Variation clause ensures that contractual terms are not varied accidentally or informally, and further to prevent an unscrupulous party from falsely claiming that a contract has been varied on the telephone or during a face-to-face conversation.

TALKING IT OVER – WAIVER, RENEGOTIATION, ASSISTANCE OF AN EXPERT AND ADR (CONCILIATION)

A possible solution to a minor dispute (lateness in delivery, non-reach sale targets) is for the other party to excuse that dispute; this could happen thanks to a waiver. A waiver is the voluntary relinquishment or surrender of some known right or privilege. While a waiver is often in writing, sometimes a person's actions can act as a waiver.

The most common type of renegotiation occurs within the life of the contract, due to the failure of one side to fulfill its obligations. Flexibility, commitment and recognition that renegotiations may be necessary should be part and parcel of a negotiator's strategy.

The assistance of an expert could help resolve the disputes; they give opinion, advices or could be asked to respond questions of a financial or technical nature. The purpose of the expert’s findings, decisions or recommendations will depend on what the parties’ request is.

The parties negotiate directly, each with the assistance of an expert in their dispute. The expert can advise them, and guide them, towards an agreement.

Documentary Credit Dispute Resolution Expertise (DOCDEX) offers international traders a quick and cost-effective means to settle documentary credit disputes, usually in two to three months. Cases are decided by a panel of three impartial experts, whose decision is further scrutinized by the technical advisor of the Banking Commission to ensure that it conforms to applicable ICC Rules and their interpretation by the Banking Commission. Decisions are binding only if both parties have so agreed.

Alternative dispute resolution (ADR) includes dispute resolution processes and techniques that act as a means for disagreeing parties to come to an agreement short of litigation.

Conciliation is a process in which the parties to a dispute, with the assistance of a dispute resolution practitioner (the conciliator), identify the issues in dispute, develop options, consider alternatives and endeavor to reach an agreement. The conciliator may have an advisory role on the content of the dispute or the outcome of its resolution, but not a determinative role. The conciliator may advise on or determine the process of conciliation whereby resolution is attempted, and may make suggestions for terms of settlement, give expert advice on likely settlement terms, and may actively encourage the participants to reach an agreement.

Mediation, as used in law, is a form of alternative dispute resolution (ADR), a way of resolving disputes between two or more parties with concrete effects. Typically, a third party, the mediator assists the parties to negotiate a settlement. The term "mediation" broadly refers to any instance in which a third party helps others reach agreement. More specifically, mediation has a structure, timetable and dynamics that "ordinary" negotiation lacks. The process is private and confidential, possibly enforced by law. Participation is typically voluntary. The mediator acts as a neutral third party and facilitates rather than directs the process

THE ICC ADR RULES

ICC Arbitration is a flexible and efficient dispute resolution procedure leading to binding and final decisions subject to enforcement worldwide.

The ICC ADR Rules are the result of discussions between dispute resolution experts and representatives of the business community from 75 countries. Their purpose is to offer business partners a means of resolving disputes amicably, in the way best suited to their needs. A distinctive feature of the Rules is the freedom the parties are given to choose the technique they consider most conducive to settlement.

The Mediation Rules of the International Chamber of Commerce are administered by the ICC International Centre for ADR, which is a separate administrative body within the ICC.

The Rules provide for the appointment of a neutral third party (the “Mediator”) to assist the parties in settling their dispute.

Mediation shall be used under the Rules unless, prior to the confirmation or appointment of the Mediator or with the agreement of the Mediator, the parties agree upon a different settlement procedure or a combination of settlement procedures. The term “mediation” as used in the Rules shall be deemed to cover such settlement procedure or procedures and the term “Mediator” shall be deemed to cover the neutral who conducts such settlement procedure or procedures. Whatever settlement procedure is used, the term “Proceedings” as used in the Rules refers to the process beginning with its commencement and ending with its termination pursuant to the Rules.

When two parties are disputing something, the ICC give them two alternatives to solve their problems:

1) The mutual request, whereby the parties may insert ad ICC ADR clause into their contract o agree to ICC ADR at some time after the dispute has arisen.

2) When there is no previous agreement for ICC ADR and the part wishing to commence ICC ADR proceedings file a unilateral Request with the ICC ARS Secretariat.

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