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Introduction Multi-tiered dispute resolution clauses merege ADR and arbitration procedures and provide for a sequence of dispute resolution procecesses.

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Presentation on theme: "Introduction Multi-tiered dispute resolution clauses merege ADR and arbitration procedures and provide for a sequence of dispute resolution procecesses."— Presentation transcript:

1 Introduction Multi-tiered dispute resolution clauses merege ADR and arbitration procedures and provide for a sequence of dispute resolution procecesses generally composed of negotiation, mediation, expert determination and finally abitration. By inserting a Multi0Tier resolution clause in their contract parties agree to resolve their potential controversies by using these escalating steps with an intention that arbitration proceedings will only be commenced in case of failure of previous ADR techniques. James H. Carter issues arising out of integrated dispute resolution clauses in New Horizon in the International Commercial Arbitration and beyond. ICCA congress series No. 12 ,14 Van De Berg 2005 With significant increase in the size the global commerce, most commercial disputes are popularly being referred to alternative dispute resolution (ADR), they being both cost effective and less time consuming in comparison to traditional dispute resolution mechanism and arbitration. Arbitration though being an alternative process to traditional court system has become costly and time consuming as the award passed is to be enforced by the courts. The other ADR processes are of consensual nature with the involvement of third neutral party in contrary to Arbitration which is an adjudicative process. We will discuss and see the difference approaches in enforcement of Multi-tiered Dispute Resolution Clauses (MTDRC) in various jurisdictions which bring out various new perspectives to this process of dispute resolution. Also The opinion of scholars such as Martin Hunter, Michael Pryles, Peter Klaus Berger, Robert N. Dobbins and Richard Craven to name a few who have opined and commented upon the effectiveness of the process, and the solutions to make this process smooth and successful in resolving disputes. Lets find Out whether the wedding cake strikes back or does all end in ‘TIERS’?

2 Basics A clause may provide first for non-binding mediation under mediation procedures. If the mediation is unsuccessful, the clause authorizes the dispute to be resolved by binding arbitration pursuant to specific arbitration rules. A three tier clause may provide first for negotiation, which, if unsuccessful, is followed by non-binding mediation, then by binding arbitration.

3 Goal of the Clause Prompt, cost-effective dispute resolution
Appropriate escalation of ADR techniques Negotiation and mediation required before “litigation mind-set” takes hold Conservation, if possible, of the underlying relationship

4 Example Clause: ICDR Model Clause
In the event of any controversy or claim arising out of or relating to this contract, or a breach thereof, the parties hereto agree first to try and settle the dispute by mediation, administered by the International Centre for Dispute Resolution under its Mediation Rules. If settlement is not reached within 60 days after service of a written demand for mediation, any unresolved controversy or claim arising out of or relating to this contract shall be settled by arbitration in accordance with the International Arbitration Rules of the International Centre for Dispute Resolution. The parties should consider adding: “The number of arbitrators shall be (one or three)”; “The place of arbitration shall be (city and/or country)”; “The language(s) of the arbitration shall be ___.”

5 Example Clause: ICDR Model Clause (Three Tier)
In the event of any controversy or claim arising out of or relating to this contract, or the breach thereof, the parties hereto shall consult and negotiate with each other and, recognizing their mutual interests, attempt to reach a solution satisfactory to both parties. If they do not reach settlement within a period of 60 days, then either party may, by notice to the other party and the International Centre for Dispute Resolution, demand mediation under the Mediation Rules of the International Centre for Dispute Resolution. If settlement is not reached within 60 days after service of a written demand for mediation, any unresolved controversy or claim arising out of or relating to this contract shall be settled by arbitration administered by the International Centre for Dispute Resolution in accordance with its International Arbitration Rules.

6 Example Clause: ICC Model Clause
In the event of any dispute arising out of or in connection with the present contract, the parties agree to submit the matter to settlement proceedings under the ICC ADR Rules. If the dispute has not been settled pursuant to the said Rules within 45 days following the filing of a Request for ADR or within such other period as the parties may agree in writing, such dispute shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules of Arbitration.

7 Example Clause: LCIA Model Clause
In the event of a dispute arising out of or relating to this contract, including any question regarding its existence, validity or termination, the parties shall first seek settlement of that dispute by mediation in accordance with the LCIA Mediation Rules, which Rules are deemed to be incorporated by reference into this clause. If the dispute is not settled by mediation within [ ] days of the appointment of the mediator, or such further period as the parties shall agree in writing, the dispute shall be referred to and finally resolved by arbitration under the LCIA Rules, which Rules are deemed to be incorporated by reference into this clause. The language to be used in the mediation and in the arbitration shall be [ ]. The governing law of the contract shall be the substantive law of [ ]. In any arbitration commenced pursuant to this clause,          (i) the number of arbitrators shall be [one/three]; and          (ii) the seat, or legal place, of arbitration shall be [City and/or Country].

8 What is Multi- Tiered Dispute Resolution Clauses?
Multi-Tiered Dispute Resolution Clauses is a clause in the contract between the parties which requires the parties to be engaging themselves in distinct stages which give results of a final and binding resolution prior to arbitration or litigation. The stages of the process are as follows: Negotiations between project personnel Negotiations between senior executives mediation Dispute Resolution Board Arbitration or Litigation. Alexander Jollies, Consequences of Multi-tiered Arbitration Clauses: Issues of Enforcement, (2006) 72 Arbitration 329 ( The Chartered Institute of Arbitration, Switzerland). Alexander Jollies, Supra n.7 Lets understand these concepts one by one

9 Typical Uses of Multi-Tier Arb
Typical Uses of Multi-Tier Arb. Clauses - Long Term or “Relationship” Agreements Joint Ventures Distributorship or Licensing Agreements Supply Agreements Long Term Service Agreements Governing Documents for Closely Held Entities Construction or Infrastructure Projects

10 Increasing Role of Party Autonomy
One of the most important aspects of multi- tiered arbitration clauses is ‘party autonomy’. The principle of ‘party autonomy’ is greatly recognized in a driving force in the international arbitration.  Party autonomy in arbitrational proceedings acts as one of the key distinguishing features of the arbitration agreements. It gives the parties the freedom to choose the forum and the procedure to be followed according to their own convenience. This principle guides international commercial arbitrators in determining the correct choice of the law applicable to an international commercial contract.  The only limitation, which is there with regards to multi- tiered arbitration clause is that, it should not be against public policy or be illegal. 

11 Negotiations Negotiations are the cheapest and fastest dispute resolution mechanism which allows parties to preserve their business relationships and continue in future. Negotiations are usually the first step of MTDRC’s and contractually mandated because a contractual binding has a psychological effect that ensures parties actually to negotiate before beginning arbitration or litigation. The MTDRC drafters contractually mandate different levels of negotiations with different authorities in order ensure a result out of the dispute. Liana Kartsivadze, Jurisdiction of Arbitral tribunal on the grounds of Multi-tiered Dispute Resolution Clause, Central European University Thesis (March 29,2010) at p.5 And Dana N. Freyer, Practical Considerations in Drafting Dispute Resolution Provision in International Commercial Contract: A US Perspective, Arbitration International, Vol.15 No.4 (1998) p. 8, Supra n.9 at p.6

12 Mediation in terms of the outcome of the settlement which is absolutely based on the parties’ interests and needs. Mediation is a process where the negotiation is conducted by a neutral third party, the mediator. Mediator is a trained professional, who helps parties to find the best solution to their disputes, by identifying the strength and weaknesses of their positions, mediation will result in a settlement. Mediation is a confidential ADR process it’s a creative in nature Martin Hunter at p.65, Supra n.1 and Dana N. Freyer at p. 9, Supra n.11

13 Dispute Resolution Boards
In contracts involving specific and very technical details, parties may put for dispute resolution boards consisting of contract specific experts. The purpose of such option is the fact that “technical issues to be handled by experts before considered by Arbitral Tribunal.” Martin Hunter at p.1 Supra n.1

14 Problems with MTDRC When one tier should come to an end and next begins, it becomes necessary to know when to stop wasting time and money and proceed to the next stage. mediation may require disclosure of sensitive business information. an agreement reached by mediation is not directly enforceable. Michael Pryles at p. 160 Nathalie Voser, Enforcement of Multi-Tier Dispute Resolution Clauses by National Courts and Arbitral Tribunals – the Civil Law Approach, IBA Conference Durban 2002: Session on Multi-Tiered Dispute Resolution Clauses and their Enforcement, Wian Erlank, seen on Enforcement of Mutli-Tiered Dispute Resolution Clauses, available at: (last visited: September 9, 2012) Michael Pryles at p. 161 Michael Pryles at p. 162

15 QUESTIONS Whether an agreement to negotiate and mediate our enforceable? Whether MTDRC’s providing arbitration as the last stage are they part of mechanism of arbitration? Answer 1 This question concerns each stage’s enforceability individually, especially since it is often claimed that procedures such as negotiation and mediation are consensual in nature, conditional on the willingness of parties participation and therefore not enforceable whereas arbitration can continue even if one of the parties does not participate, as an arbitration agreement can be enforced by a court. A mediator cannot proceed without one of the parties and neither can negotiations. Answer 2 Those against the use Art.II (1) in MTDRC argue that MTDRC rather is an agreement providing for the resolution of disputes by a procedure other than arbitration, with the possibility of arbitration if the dispute is not resolved through the earlier procedures.

16 Enforceability of ADR stage of MTDRC in Different Jurisdictions

17 ENGLAND (Common Law) In England it appears from the decided decision that two different theories are present one in favour of ADR and the other against it. In Courtney’ Case it was decided that agreement to negotiate is vague and uncertain and in Channel Tunnel it was held that parties in general be held to the agreements made by them regarding their chosen dispute resolution procedure. Courtney & Fairbairn Ltd v. Tolaini Brothers (Hotels) Ltd, [1975] 1 WLR 297 Channel Tunnel Group Ltd v. Balfour Beatty Construction Ltd, [1993] AC 334

18 AUSTRALIA (Common Law)
Aiton v. Transfield The defendants wanted a stay of proceedings on the grounds that the contracts on which the plaintiff based its claims contained express provisions for the use of ADR before proceedings could be instituted. The plaintiff asserted that the defendant made misleading representations during the tender process and during the performance, thereby causing the plaintiff to be unable to complete the works according to the contracts, and as a consequence to have performed additional work and according to a different completion period. The plaintiff therefore claimed damages allegedly incurred by reliance on these representations. It was held that it could not order specific performance of a dispute resolution clause even if it was possible to satisfy the legal requirements for the court to be able to determine that the clause is enforceable. This is due to the difficulty for the court to supervise the process. Judgment given by Einstein, J - Aiton v. Transfield [1999] NSWSC 996 Note: It is clearly evident that English and Australian courts hold different view points over ADR clauses prior to arbitration or litigation, as them to be binding or not before invoking arbitration or litigation, as to their enforceability as a mandatory requirement. Aiton makes clearly is not making arbitration clause to be effective only post completion of negotiations the aussie case

19 Switzerland (Civil Law)
In Switzerland there is a doubt casted over the practical importance of mediation by an independent mediator for commercial disputes because the Swiss courts always conduct settlement negotiations themselves and the fact that broad common-law type pre-trial discovery procedures does exist in Switzerland and as such cannot inflate the cost of litigation. In a case involving a construction of an apartment the parties had agreed that disputes arising would be decided by the courts. However, the parties undertook that, before referring the matter to the court, they would submit it to a panel of conciliators. If the parties failed to settle the matter within 30 days after the conciliators had issued a recommendation, each party could refer the dispute to litigation. After completion of the apartment, the claimants discovered several construction defects. The parties commenced conciliation proceedings with two main defects and settled. However, when the respondents interrupted these works, the claimants filed a claim with the Zurich District Court requesting the remedy of all the defects, not just the two on which the parties had settled by conciliation. The respondents maintained that the court had no jurisdiction, or if it had, it must reject the claim. The respondents argued that conciliation had dealt with only two of the defects invoked by the claimants and that, with regard to other defects, the necessary condition precedent for commencement of litigation was not met. The Cassation Court decided that a conciliation clause was an issue regarding material contractual commitments, i.e. of substantive nature, a condition precedent to jurisdiction of the court. According to this decision, a conciliation clause is to be treated as an agreement of purely substantive nature. Consequently, ordinary courts would, despite the existence of a conciliation clause, accept jurisdiction, even if one of the parties ignored the clause. See Heiner Eyholzer, Die Streitbeilegungsabrede, Fribourg (1998), Wian Erlank, seen on Enforcement of Mutli-Tiered Dispute Resolution Clauses, available at: (last visited: September 9, 2012) at p.30 Cassation Court o f the Canton of Zurich on Marc h 15, 1999, ZR 99 (2000) No.29, Alexander Jollies, Supra n.7

20 France (Civil Law) In Polyclinique des Fleurs case, the French 2nd Civil Chamber held contrary to the Zurich Cassanation Court. According to French practice the claimant is required to comply with the conciliation clause, otherwise the court will refuse to start with judicial proceedings. In 2001 the French 1st Civil Chamber has held that namely a finding that a contractual provision for conciliation in mandatory terms, is not enforceable- a result which violates the fundamental principle pacta sunt servanda. Revue de l‟arbitrage 4/2001, 749, (July 2, 2000) Pg. 40. And Poiré v. Tripier. Arbitration International, Vol. 19, No.3. (2003) at p.364, Wian Erlank, seen on Enforcement of Mutli-Tiered Dispute Resolution Clauses, available at: (last visited: September 9, 2012) at p.32

21 Germany The Bundesgerichtshof held that a clause, under which the parties had agreed to attempt to resolve disputes arising out of a contract by settlement negotiations before commencing court proceedings, was valid under German Law and that, in general, any claim brought against one of the parties by the other before the courts would be inadmissible if the settlement negotiations had not been commenced and completed. The court confirmed that, if the parties agreed on a mandatory settlement clause, both parties were obliged to co-operate in carrying out the settlement negotiations. An action brought before the courts prior to completion of an agreed settlement procedure was inadmissible. Like the Common Law position the questions even in the Civil Law System our answering in two different directions as to is mediation mandatory prior to commencement of arbitration or litigation and whether it is enforceable under law. One of the objections raised is that mediation should be voluntary and that a forced mediation cannot lead to a satisfactory result which seems to be refuted because of the fact that modern mediation science has proven that the intervention by a third neutral party improves or multiplies the probability that the parties may be able to reach an agreement. Fridolin Walther, E-confidence in e –commerce durch Alternative Dispute Resolution, PJA; 7 /2001, at p.762, Alexander Jollies, Supra n.7

22 Other Legal Problems Enforceability of Settlement Agreements:
Prescription: Does initiation of ADR proceedings stay the run of prescription or is it still necessary to approach a court for an injunction? In Cable & Wireless the court found that “the mere issue of proceedings is not inconsistent with the simultaneous conduct of an ADR or with a mutual intention to have the issue finally decided by the courts only if the ADR process fails.” It follows that proceedings could also be instituted to interrupt prescription. In France it was mentioned obiter in Poiré v. Tripier that by submitting a dispute to conciliation or arbitration the effect of the applicable statute of limitations is suspended. Thus, in most cases a person whom is unsure about the question whether the run of prescription will be suspended while MTDR is being used will be able to approach the court for an order to that effect. Enforceability of Settlement Agreements: Article 14 states that the settlement agreement becomes enforceable the same as an arbitral award. Thus this being an internationally widely accepted principle courts must follow it for the success and smooth functioning to conciliation proceedings UNCITRAL Model on International Commercial Conciliation, Art. 14 Cable & Wireless Plc v IBM United Kingdom Ltd [2002] EWHC 2059 Poiré v. Tripier. Arbitration International, Vol. 19, No.3. (2003) at p.364 Wian Erlank, seen on Enforcement of Mutli-Tiered Dispute Resolution Clauses, available at: (last visited: September 9, 2012) at p.43

23 The Solutions by General Drafting Methods
Drafting MTRDC’s the following has to be kept in mind which of the ADR techniques to use; in what order to use them; over what period of time they will be used; the precise form of each particular technique to use and lastly whether there is a need for “separate” dispute resolution paths, or an integrated multi-tiered process. In order for an ADR clause to be effective, it ought to be contractually sound and the following should be included to ensure certainty and thus eventually enforceability. The procedures to be used before employing arbitration should be clearly stipulated in the contract. Contracting parties should double ensure there to be ambiguity for MTDRC’s to be successful. The reason for including an arbitration clause in a contract is lay down a suitable procedure for resolving conflicts before conflicts arise. This has the effect of minimising the risk of not being able to agree to a suitable procedure in case of a conflict. On the other hand, when a contract already contains an arbitration clause, the parties may decide to use a faster and less expensive method of dispute resolution before initiating arbitration. MTDRC once incorporated in the contract the risk of uncertainty if the parties want to choose such a dispute resolution method. Pryles recommends point two Point three Aiton

24 Enforceability Issues Solutions:
Seat your Multi-Tier ADR Clause in a jurisdiction which will enforce the preliminary tiers If you are considering placing the seat in an unfamiliar jurisdiction, Consult Local Counsel Include provisions giving the arbitrator the power to require specific performance of preliminary tiers of the ADR clause

Interim relief, preliminary measures Involvement of arbitrators in first-tier phase Confidentiality of information from first-tier Suspension of limitation periods Penalty payments in case of non-compliance Remedies in case of breach of contract Counterclaims Violation of non-mandatory settlement processes Involvement of arbitrators in first-tier phase To what extent may facilitators, mediators and arbitrators participate in the various tiers? Would a facilitator or mediator involved in the first-tier phase be acceptable as arbitrator in the second-tier phase, or would his or her independence and impartiality be affected by the earlier involvement? Confidentiality of information from first-tier To what extent is information exchanged between the parties in the first-tier stage admissible in the succeeding arbitration? Could a party object to the disclosure of material information in the arbitration on the ground that this information was obtained by the other party in the course of first-tier confidential settlement negotiation or mediation? Suspension of limitation periods Is the commencement of first-tier negotiations or mediation sufficient to meet deadlines of limitation periods? How can a party prevent limitation periods expiring during the time of the pre-arbitral steps? Penalty payments in case of non-compliance Is it permissible to secure compliance with pre-arbitral commitments by way of contractual penalty payments? Remedies in case of breach of contract If non-compliance with contractual pre-arbitral requirements is treated as a breach of contract, what are the remedies? Could a party withdraw from the contract? Could a party withdraw from the arbitration agreement? Could a party claim damages, and if so, in what amount? Counterclaims Are counterclaims subject to the pre-arbitral settlement mechanism? If a respondent raises the counterclaim only after the arbitration has been commenced, does this counterclaim need to go through the first steps of the multi-tier process? Violation of non-mandatory settlement processes Does the violation of non-mandatory pre-arbitral steps have any effect on the arbitration? Should arbitrators take a party’s failure to comply with non-binding first-tier steps into consideration when deciding on the assessment of costs and party compensation? Despite the many issues arising in connection with multi-tier arbitration clauses, court and arbitral practice shows that these clauses are being treated as relevant by arbitrators and judges and that requests for arbitrations filed in violation of such clauses are usually held inadmissible, provided that there is no doubt about the parties’ intention that their agreement to the settlement process was binding.

26 Position in India In the case of M.A Sons v. Madras Oil and Seeds Exchange Limited and another the High Court of Madras observed that: “an award made pursuant to a proper arbitration agreement is final, subject, of course, to the consequences of any such term of the contract” The parties entered into and agreement and one of the clause specified that the contract would be subject to the by-laws of the Madras oil and seeds exchange Ltd. later a contract by- law came into existence which gave the parties a right to appeal. It was contended that this was opposed to the Condition No. 7 of the First Schedule of the Arbitration Act, 1940 which provided that the award shall be binding on the parties. The Court however rejected this argument observing that there is nothing preventing parties to pursue an appeal. The Court heavily relied on a decision of the Calcutta High Court in the case of Hiralal Agarwalla and Co. v. Joakim Nahapier and Co. Ltd , in this case the Calcutta High Court dealt with a situation where the dispute was first refered to Arbitrators, then to an umpire, and there on to a committee of appeal. The Court held that there was nothing to prevent the parties from agreeing to a submission containing in it a further submission to arbitration and held that the appeal was valid. The Court also referred to a passage from Russel on Arbitration which mentions that an arbitration agreement may provide for an appeal. Hence, the High Court was of the opinion that, an award made pursuant to a proper arbitration agreement is final, subject, of course, to the consequences of any such term of the contract. The concept of two- tier arbitration is relatively new to the Indian laws. Although, there did exist a provision for an appeal before a private authority under the 1940 Act

27 The Centrotrade Case In the present case, Centrotrade Minerals and Metals Limited entered into a contract for the sale of Copper Concentrate to Hindustan Copper Limited to be used at by the latters at its plant in Khetri, Rajasthan. One of the clauses in the contract provided that, in case of any dispute between the two parties, the matter would be referred to arbitration in India before the Indian Council of Arbitration (ICA) in accordance with the rules of arbitration of ICA. In the event of any disagreement with the decsions given by the arbitrators under the ICA, the matter would be further referred to a second arbitration in London, in acoordance with the rules of International Chamber of Commerce (ICC). A dispute arose Centrotrade Minerals approached ICA for arbitration, arbitrator made an award in favour of Hindustan Copper Lt. (HCL). Centrotrade made an appeal to the second arbitral tribunal in london under the ICC. Arbitrator made an award in favour of Centrotrade. As a result HCL filed an application with the District Judge of Alipore, Calcutta, seeking declaration of the award passed by the ICC as void and unenforceable. On the other hand Centrotrade filed an application with the Senior division Civil Judge for the execution of the ICC award. both the cases were sent to the Calcutta High Court, where a single Judge Bench gave the decision in favour of the Cantrotrade but the Division Bench of the High Court reversed the decision. Hence an appeal by both the parties to the Supreme Court. The matter was placed before a bench comprising Justice S B Sinha and Justice Tarun Chatterjee. Both of whom differed in their opinions. Justice S B Sinha outrightly rejected the presence of two tiers of arbitration under the scheme of the Arbitration Act, Justice Tarun Chatterjee on the other hand was of the opinion that the two tier arbitration is possible under the Arbitration Act. Centrotrade Minerals and Metals Limited v. Hindustan Copper Limited  - Till this time had not come into existence, the law regarding two- tier or multi-tier arbitration clauses were pretty much silent. It is not that the upcoming of this case has made law very clear about such arbitration clauses, but one can say that atleast people have started realizing the importance of such clauses irrespective of whether it is within the purview of the laws of arbitration in India or not.

28 Justice S.B. Sinha’s View
“throughout, the provisions nowhere it is mentioned that an appeal can be made or an application can be filed against the award to a separate arbitration board or forum. So, the finality and legality has to be determined Further Justice Sinha added that a domestic award not set aside as provided under the act within the time frame provided under S. 34 would become a decree by legal fiction as provided under S. 36 of the Arbitration Act. [14] The decree can only be set aside as provided under the Act. It would be opposed to public policy if the same is set aside by a private adjudicator.  by the Court if it is so challenged.”  On the issue of whether the ICC award would be enforceable as a foreign award or not justice Sinha opined as “it is inconceivable that one part of the arbitration agreement shall be enforceable as a domestic award but the other part would be enforceable as a foreign award”  Justice Sinha further said that the move from Indian Council of Arbitration to the ICC arbitral tribunal would not amount to an appeal, as an appeal is generally a continuation of the same proceeding. In the present case two different tribunals would use two different set of proceedings and rules. Hence it would not amount to the same proceedings. 

29 Justice Chatterjee’s View
Justice Sinha was of the opinion that, a domestic award cannot be challenged anywhere else except before a national court on the grounds specified under Sec. 34 of the 1996 Act. However, on the same issue issue Justice Tarun Chaterjee was of the opinion that, “…The intention of the parties was that the second arbitration was in the nature of an appeal and that the second award would take precedence over the first award. It is therefore amply clear that the intention of the parties to the agreement was that if the parties are dissatisfied with the first award and if approach was made to the ICC arbitrator… then the first arbitration award would not be binding on the parties nor there would be any existence of the same after the ICC award was made. Thus, it cannot be said that the proceeding before the ICC arbitrator was an independent proceeding nor it could be said that it was merely a second arbitration in London, U.K.”  Hence one can see that while Justice S P Sinha was strictly against the applicability and validity of such two- tier arbitrations, Justice Tarun Chaterjee was completely for it. He contrastingly observed that there was nothing which prohibited the existence of an arbitral appellate forum under the Arbitration Act

30 Conclusion With an in-depth analysis of MTDRC one can conclude that drafting of them has to be specific for their application to be success when disputes arise. The courts shall also make efforts that these ADR processes are respected as is arbitration therefore when the question of their applicability is an issue the courts shall take a dynamic stand and always try to make them as far as possible applicable upon the parties. This will undoubtedly reduce unnecessary tensions between the parties and increase business cooperation. As today the world is growing global village and commerce and trade is growing at a rapid scale such dispute resolution mechanisms have to become enforceable for a cheaper and less time consuming process. Dispute Resolution in the commercial world is to be done at the fastest to achieve the greater good and for a better future of the world of tomorrow.

31 Delhi High Court Havels India Ltd. vs Electrium Sales Ltd
Delhi High Court Havels India Ltd. vs Electrium Sales Ltd. on 16 April, 2013 C.S. (O.S.) No. 2221/2012 Page 14 of 23 regarding the invocation of the arbitration. If that were the case, all multi-tier dispute resolution clauses, also known as escalation clauses can be frustrated by one party claiming that its participation in the preceding mediation proceedings cannot be used to trigger the arbitration clause, merely because it used the term „without prejudice‟ in the communications.

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