The Resolution of Commercial Disputes

Mediation

Arbitration

What is Arbitration?

The dispute is submitted, by mutual agreement of the parties, to a arbitrator(s). The arbitrator(s) make a binding decision on the dispute

Why use this process?

  • it is less expensive that other forms of resolution
  • the results and details of the arbitration are private
  • evidentuary rules and requirements are not as strict
  • the right to apeal, of both parties, is more limited
  • mandatory submission to arbitration is of set out in contracts

What are the benefits of choosing this process?

  • the right to apeal of the losing party is limited
  • the process of arbitration can proceed without all the facts of the case being known by one or both parties
  • Enforcing submission to arbitration, via a contract, limits the availability of litigation as a means to resolve a dispute.
  • Lack of experience in the selection of a arbitrator, may cause parties to be at a disadvantage
  • There isnt a precedential value to the ruling of a arbitrator

What are the disadvantage of choosin this process?

Mediation: Useful Information

  • Most countries involved in trade, have laws that permit arbitration and specify the effects of a arbitration award
  • There are many worldwide bodies that provide arbitration services
  • Contracts containing arbitration clauses, removes uncertainty of action should a breach occur. This is why it a arbitration clause is included in many contracts.
  • The courts of many countries enforce arbitration awards
  • the resolution can take place in a neutral territory
  • the parties involved are free to choose the territory
  • the abritrator chosen by both parties, can be from a list of experts related to the industry in which the dispute takes place, but not involved in the dispute
  • the dispute is resolved using arbitration rules of the arbitrating person (not the rule of law)

Litigation

The process of settling a dispute in a court of law

What is Litigation?

Determining the authority to settle a dispute

Jurisdiction:
The authority of a court to hear and determine a case

  • Territorial jurisdiction
  • In rem jurisdiction
  • Subject matter jurisdiction
  • Diversity jurisdiction
  • In Personam jurisdiction

Types

Generally, jurisdiction is determined by domicile, specifically, his or her habitual or ordinary residance

“due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the mainte-nance of the suit does not offend traditional notions of fair play and substantial justice.” International Shoe Co. v. Washington, 326 U.S. 310 (1945).

In Personam

What happens when the domicile is in a different country?

Obtaining Jurisdiction by Service of Process

The Hague Convention on the Service Abroad of Judicial and Extra-judicial Documents in Civil or Commercial Matters

How do I obtain jurisdiction of a foreign defendant?

Where will the dispute be heard?

Venue

The geographical location of a court of competent jurisdiction where a case can be heard

Forum Non Conveniens

Whenever a case is properly heard in the courts of more than one jurisdiction, it should be heard in the jurisdiction that is more convenient and has the closer connection to the cause of action that led to the case.

NB: Forum Shopping may be used as a tactic to shop around for better legal "deal". Forum Selection Clauses in contracts fixes jurisdiction in advance, should mediation or litigation occur