Conflict Resolution

Basic Forms of Conflict Resolution

Litigation

Alternate Forms of Dispute Resolution Negotiation Mediation Arbitration

Advantages of ADR over Litigation Less expensive Less time consuming Parties can choose the person who will preside Might prevent adverse publicity Preserve confidentiality Serves to preserve relationship between the

parties

Problems with Arbitration Unpredictable: Not required to follow previous

cases Lack of legal training of some arbitrators. Absence of written opinions. No standard rules to follow No Discovery Limited or no appeal

Fed. Arb. Act. Sec. 10 Corruption, fraud or other undue means Arbitrator exhibited bias or corruption Refusal to postpone hearing, hear evidence Arbitrator exceeded his/her powers

Arbitration

Resolution of a dispute by a neutral third party(s)

Arbitrator not constrained by precedent, as is a judge.

Award is legally binding.

Limited of no Appeal (Finality)

Methods of Securing Arbitration

Binding arbitration clause in contractMore than 95% of collective bargaining

agreements have such clauses.

Statute

Submission agreementA written contract which can be entered into

at any time.

Methods of Securing Arbitration

Court Annexed ArbtrationCompulsory by court rule

Lawsuits below a certain amount of damages($50,000.) must first be heard at an arbitration hearing.

Automatic right of appeal to trial

International Dimensions of ADRADR is highly favored internationally.

New York Convention

Makes arbitrators’ awards enforceable in losing party’s

country.

U.S. policy favors arbitration of international disputes.

Federal Arbitration ActSection 3If any suit or proceeding be brought in any of the courts

of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court … shall onapplication of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement,

Title 9, US Code, Section 1-14, enacted February 12, 1925

New York Convention

United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958)

To date about 160 nations have adopted the Convention

Article I1. This Convention shall apply to the recognition and enforcement of arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought, and arising out of differences betweenpersons, whether physical or legal. It shall also apply to arbitral awards not considered as domestic awards in the State where their recognition and enforcement are sought.

Article II

Each Contracting State shall recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration.

Article IIIEach Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon, under the conditions laid down in the following articles. There shall not be imposed substantially more onerous conditions or higher fees or charges on the recognition or enforcement of arbitral awards to which this Convention applies than are imposed on the recognition or enforcement of domestic arbitral awards.

Effects of New York Convention

Attracts and protects foreign investment since efficient global trade requires effective international dispute resolution.

Provides a reliable mechanism to enforce binding resolution of business disputes without interference from local courts.

Additional Conventions and Treaties

Convention on the Settlement of Investment Disputes Between States and Nationals of

Other States, "ICSID Convention" or "Washington Convention").

North American Free Trade Agreement ("NAFTA").

Conventions and Treaties

Inter-American Convention on International Commercial Arbitration ("Inter-American Convention") is yet another key multilateral convention. The United States and 18 other OAS countries are signatories

Contractual Precaution

1. Insure all parties to contract are based in countries which are signatories of the N.Y Convention

2. Specify place of appeal and limit reasons to those listed in N.Y. Convention.

3. Examine court system of country to determine likelihood of court interference.(Russian Courts likely to interfere)

4. Consider insurance to cover loses.

5. Select place of arbitration considering law governing conduct of the arbitration.

•Commonly used venues: Paris; London, Geneva; Stockholm; The Hague, Netherlands; Vienna

International Arbitration AssociationsAmerican Arbitration Association (AAA)

ICC International Court of Arbitration - The International Court of Arbitration of the International Chamber of Commerce

(Paris, France). ICCA

The International Council for Commercial Arbitration.

ICSIDThe International Centre for the Settlement of Investment Disputes, World Bank, Washington, USA. Created by theWashington Convention. LCIAThe London Court of International Arbitration. Permanent Court of Arbitration(The Hague, The Netherlands)

UNCITRAL The United Nations Commission on International Trade Law (Vienna)

WIPO The World Intellectual Property Organization (Geneva)

Current Issues

EEOC v Waffle HouseA private agreement between an

employer and an employee to arbitrate employment – related disputes does not prevent the the Equal Employment Opportunity Commission from pursuing victim-specific relief, i.e. back pay, reinstatement and monetary damages