adr today and tomorrow

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Practical tips on choosing the right dispute resolution strategy, entering into enforceable agreements for ADR, and navigating complex matters such as arbitrations with an international component.

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  • 1.ADRTodayandTomorrowFebruary10,2011Presentedby: JohnLornMcDougall,Q.C.DerekLloyd,Q.C.DavidMcCutcheonMichaelSchafler1

2. WhatisADR? Oneview:AlternativeDisputeResolution(ADR)isatermusedtodescribeabasketofproceduresoutsidethetraditionallitigationprocess,usuallyenteredintovoluntarilybypartiestoadisputeinanattempttoresolveit. 2 3. AMoreExpansiveView: 3 4. Mediation Premediationsteps: theright mediator whatapproachwillwork evaluative vs.interestbased howmuchinformationtoputinthemediation briefexpertreports? roleofmediationcounsel(beforeandduring) themediatorsrole(partyinterviews?) authoritytosettle 4 5. Mediationcontd Atthemediation: Differentstyles intimidation,stonewalling Outcomesareflexible Dealornodeal Partialdeal Agreedfactsandadmissions Setrangeofoutcomes bookenddamages;narrowliabilityissues Determinationofpointoflaworfact OtherADRprocesses arbitration,neutralevaluation5 6. Mediationcontd Factorsthatcaninfluencesettlementstrategy Suppliers Reputation Discounts Paymenttiming Taxefficiency DoyoupaperMinutesrightawayornot? 6 7. Arbitration Internationalvs.domestic adhoc andinstitutional Itsfaster andcheaper ArbitratorsalwaysapplyKingSolomonswisdom 1or3arbitrators? 7 8. ArbitrationNeutralityitisnotimproperforapartynominatedarbitratortoensurethatthearbitraltribunalproperlyunderstandsthecasebeingadvancedbythepartydissentingopinionswerealmostinvariably(inmorethan95%ofthecases)writtenbythearbitratornominatedbythelosingparty1.Redfern andHunteronInternationalArbitration,5th ed.OxfordUniversityPress,2009,atpp.573742.MoralHazardinInternationalDisputePresentation,Prof.JanPaulsson,InauguralLectureasHolderoftheMichaelR.KleinDistinguishedScholarChair, UniversityofMiamiLawSchool,April29,2010,p.8 8 9. ArbitrationNeutrality contd Mynomineewillhelpmewinthecase EvenHomernods,threeheadsarebetterthanone,especiallywhenthestakesarehigh Partieshavegreaterconfidenceinarbitratorsselectedfortheirspecialknowledgeorskill 9 10. Arbitration TruthsorMyths(contd) Arbitrationislitigationsittingdown 10 11. MoreMyths Itshardtoenforceanarbitrationclause ArbitrationAct,1991,S.O.1991,c.17 Arbitraltribunalmayruleonownjurisdiction 17. (1) Anarbitraltribunalmayruleonitsownjurisdictiontoconduct the arbitrationandmayinthatconnectionruleonobjectionswithrespecttothe existenceorvalidityofthearbitrationagreement.1991,c. 17,s. 17(1). UNCITRAL1985MODELLAW Article16.Competenceofarbitraltribunaltoruleonitsjurisdiction (1)Thearbitraltribunalmayruleonitsownjurisdiction,includinganyobjections withrespecttotheexistenceorvalidityofthearbitrationagreement.Forthat purpose,anarbitrationclausewhichformspartofacontractshallbetreatedasan agreementindependentoftheothertermsofthecontract.Adecisionbythe arbitraltribunalthatthecontractisnullandvoidshallnotentailipsojurethe invalidityofthearbitrationclause. 11 12. MoreMyths Itshardtoenforceanarbitrationclause OntarioCourtofAppeal Forum selection and arbitration clauses are generally interpretedgenerously. Onlywhereitisclearthatthedispute in question is outside the terms of the arbitration agreement willthecourtsusurptheroleofthearbitratorasthedecision makeroffirstinstanceinrespectofjurisdiction. Dalimpex Ltd.v.Janicki,2003CanLII34234(ONC.A.) Dancap ProductionsInc.v.KeyBrandEntertainment,Inc.,2009ONCA135(CanLII)12 13. MoreMyths EnforcementoftheAwardisdifficult InternationalCommercialArbitrationAct,R.S.O.1990,c.I.9 Recognitionandenforcementofforeignarbitralawards 10. Forthepurposesofarticles35and36oftheModelLaw,anarbitralaward includesacommercialarbitralawardmadeoutsideCanada,evenifthearbitration towhichitrelatesisnotinternationalasdefinedinarticle1 (3)oftheModelLaw. R.S.O.1990,c. I.9,s. 10. Enforcement 11. (1) Anarbitralawardrecognizedbythecourtisenforceableinthesame mannerasajudgmentororderofthecourt.R.S.O.1990,c. I.9,s. 11 (1). Idem (2) Anarbitralawardrecognizedbythecourtbindsthepersonsasbetweenwhom itwasmadeandmaybereliedonbyanyofthosepersonsinanylegalproceeding. R.S.O.1990,c. I.9,s. 11 (2). 13 14. UNCITRAL1985ModelLawArticle35.Recognitionandenforcement (1)Anarbitralaward,irrespectiveofthecountryinwhichitwasmade,shallberecognizedasbindingand,uponapplicationinwritingtothecompetentcourt,shallbeenforcedsubjecttotheprovisionsofthisarticleandofarticle36. (2)Thepartyrelyingonanawardorapplyingforitsenforcementshallsupplythedulyauthenticatedoriginalawardoradulycertifiedcopythereof,andtheoriginalarbitrationagreementreferredtoinarticle7oradulycertifiedcopythereof.IftheawardoragreementisnotmadeinanofficiallanguageofthisState,thepartyshallsupplyadulycertifiedtranslationthereofintosuchlanguage.14 15. UNCITRAL1985MODELLAW Article36.Groundsforrefusingrecognitionorenforcement (1)Recognitionorenforcementofanarbitralaward,irrespective ofthecountryinwhichitwasmade,mayberefusedonly: (a)attherequestofthepartyagainstwhomitisinvoked,ifthatpartyfurnishestothecompetentcourtwhererecognitionor enforcementissoughtproofthat: (i)apartytothearbitrationagreementreferredtoinarticle7wasundersomeincapacity;orthesaidagreementisnotvalid underthelawtowhichthepartieshavesubjecteditor,failing anyindicationthereon,underthelawofthecountrywherethe awardwasmade,or (ii)thepartyagainstwhomtheawardisinvokedwasnotgivenpropernoticeoftheappointmentofanarbitratororofthe arbitralproceedingsorwasotherwiseunabletopresenthiscase,or (iii)theawarddealswithadisputenotcontemplatedbyornotfallingwithinthetermsofthesubmissiontoarbitration,orit containsdecisionsonmattersbeyondthescopeofthesubmission toarbitration,providedthat,ifthedecisionsonmatters submittedtoarbitrationcanbeseparatedfromthosenotsosubmitted,thatpartoftheawardwhichcontainsdecisionson matterssubmittedtoarbitrationmayberecognizedandenforced, or (iv)thecompositionofthearbitraltribunalorthearbitralprocedurewasnotinaccordancewiththeagreementoftheparties or,failingsuchagreement,wasnotinaccordancewiththelawofthecountrywherethearbitrationtookplace,or (v)theawardhasnotyetbecomebindingonthepartiesorhasbeensetasideorsuspendedbyacourtofthecountryin which,orunderthelawofwhich,thatawardwasmade;or (b)ifthecourtfindsthat: (i)thesubjectmatterofthedisputeisnotcapableofsettlementbyarbitrationunderthelawofthisState,or (ii)therecognitionorenforcementoftheawardwouldbecontrarytothepublicpolicyofthisState. (2)Ifanapplicationforsettingasideorsuspensionofanaward hasbeenmadetoacourtreferredtoinparagraph(1)(a)(v)of thisarticle,thecourtwhererecognitionorenforcementissoughtmay,ifitconsidersitproper,adjournitsdecisionandmay also,ontheapplicationofthepartyclaimingrecognitionorenforcementoftheaward,ordertheotherpartytoprovide appropriatesecurity.15 16. MoreMyths EnforcementoftheAwardisdifficult ArbitrationAct,1991,S.O.1991,c.17 50. (1) ApersonwhoisentitledtoenforcementofanawardmadeinOntarioor elsewhereinCanadamaymakeanapplicationtothecourttothat effect.1991, c. 17,s. 50(1). Dutyofcourt,awardmadeinOntario (3) ThecourtshallgiveajudgmentenforcinganawardmadeinOntariounless, (a)thethirtydayperiodforcommencinganappealoranapplicationtosetthe awardasidehasnotyetelapsed; (b)thereisapendingappeal,applicationtosettheawardasideorapplicationfora declarationofinvalidity; (c)theawardhasbeensetasideorthearbitrationisthesubjectofadeclarationof invalidity;or (d)theawardisafamilyarbitrationaward.1991,c. 17,s. 50 (3);2006,c. 1,s. 1 (8).16 17. Enforcement BewareLocalLimitationPeriods Underinternationalarbitrationlaw,thematteroflimitationperiodsislefttolocalprocedurallawofthejurisdictionwhererecognitionandenforcementissought. Asanarbitralawardisnotajudgmentoracourtorderforthepaymentofmoney,anapplicationforrecognitionandenforcementwilloftenbesubjecttothegenerallimitationperiodapplicableintheprovinceformostcommonlawclaims. YugraneftCorp.v.RexxManagementCorp.,2010SCC19 17 18. ProblemswithClauses PathologicalICCClauseWhatsWrongHere?Apracticaldiscussion.IntheeventthatthereisanydisputewithrespecttothisMasterContract,themattersshallbesubmittedtoapanelofthreearbitrators.Withinfifteen(15)daysafterwrittennoticefromeitherpartyofafailure toresolvethedispute,eachpartyshallselectonearbitratorandnotifyeachotheroftheirselection.Within(15)daysaftertheirselection,suchtwoarbitratorsshallselectthethirdarbitrator.Thearbitratorsshallmeetwithinthirty(30)daysaftertheselectionofthethirdarbitratorandconductahearinginaccordancewiththecommercialarbitrationrulesoftheInternationalChamberofCommercetoresolvethedispute.18 19. ICCArbitration ModelClause AlldisputesarisingoutoforinconnectionwiththepresentcontractshallbefinallysettledundertheRulesofArbitrationoftheInternationalChamberofCommercebyoneormorearbitratorsappointedinaccordancewiththesaidRules. 19 20. THANKS! 21. Theprecedingpresentationcontainsexamplesofthekindsofissuescompanies looking at Alternative Dispute Resolutioncouldface. Ifyouarefacedwithoneoftheseissues,pleaseretainprofessionalassistanceaseachsituationisunique.