the future of international dispute resolution · dispute resolution as part of business strategy...
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THE FUTURE OF INTERNATIONAL DISPUTE RESOLUTIONMinimising Loss and Maximising Gain When Businesses Run into Trouble
What Business Executives Should Know
Spectrum of Dispute Resolution Options
• Negotiation
• Conciliation
• Mediation
• Neutral Evaluation
• Adjudication
• Arbitration
• Litigation
Informal /
Consensual
Formal /
Adjudicative
Negotiation Process
Preparation –Know your
BATNA
Discuss Procedure
Individual and Common Goals
Listen, Acknowledge,
Reframe, Summarise
Create Doubt, Ask Questions
Offer and Acceptance
Mediation Process
Mediator’s Opening
Statement
Parties’ Opening
Statement
Agenda Setting and Issue
Exploration
Private SessionsJoint
Negotiation Sessions
Agreement
Neutral Evaluation Process
Appointment of Neutral
Neutral Evaluation Agreement
Preliminary Conference
Submission and Exchange of Documents
Evaluation Session
Delivery of Opinion
Arbitration Process
Notice of Arbitration
Response to Notice of
Arbitration
Appointment of Arbitral Tribunal
Pre-hearing Conference
DiscoverySubmission of
EvidenceHearing
Decision and Award
Litigation Process
Filing of Writ of Summons and
Claim
Enter Appearance
and File Defence
DiscoveryInterlocutory Applications
Pre-trial Conferences
Filing Affidavits of Evidence in
Chief
Trial Judgment
Adjudication Non-Adjudicative Process
Adjudicator makes final decision Parties make final decision,
mediator facilitates negotiations
Decision is binding & enforceable Settlement agreement is binding
but not enforceable
Moderate cost Low cost
Moderate time required Little time required
Win/lose outcome Win/win outcome
Adversarial Collaborative
Result limited to monetary awards
and other legal remedies
Creative and flexible solutions
possible
May damage relationships Maintains relationships
Adjudication vs Non-Adjudicative Process
Dispute Resolution as Part of Business Strategy
• Brad Berenson, Vice President and Senior Counsel for Litigation and Legal Policy, General Electric, “mediation plays a vital role in the success and growth of the General Electric Company … mediation is a critical tool as we face the dual challenges of expanding our business in a global environment, and an ever-present focus on keeping risks and costs under control”
• Dr iur Hans Peter Frick, former Chief Legal Officer of Nestlé SA, “Nestlé was and is not a litigious company. It is not part of its culture and litigation was never high on the agenda of the Chairman and the CEO. Litigation was considered as a cost of doing business. Should problems arise, business solutions must be found to keep the business going.”
• IP director, Qihoo 360, Huang Jing noted in an interview, “Every year we spend tens of millions on IP in patent applications and in protection of creation and innovation.”
Dispute Resolution as Part of Business Strategy
• An International Arbitration Survey by Queen Mary University of London published in 2015 reflected that:
• Oil and gas companies favour international arbitration because it enables them to select arbitrators who have specialist knowledge of the industry (chosen by nearly 40% of respondents) and allows for claims to be heard in private (chosen by nearly a third of those asked).
• More importantly, oil and gas companies prefer this method of dispute resolution thanks to the greater enforceability and finality of arbitral awards worldwide (chosen by nearly 65% of respondents)
• Survey on Management – Improving Economic and
Non-Economic Outcomes in Managing Business Conflicts conducted by the American Arbitration Association in 2003
demonstrated:
• Price/earning ratios for the “most dispute-wise” companies averaged 28%
higher than the mean for all the publicly-held companies
• Price/earning ratios for the “most dispute-wise” companies averaged 68%
higher than the mean for the “least dispute-wise” category
• The “most dispute-wise” companies are particularly concerned with
maintaining good relationships with all of their stakeholders; appreciate and
value the fairness and speed of ADR processes; utilise legal resources well; and experience lower legal department budgets.
“Dispute-wise” Companies Have Higher P/E Ratios
Minimising Loss and Maximising Gain
Factors to Consider
How important is confidentiality?
Is a legally-enforceable
outcome required? If so, where?
How much money and time am I
prepared to invest?
Is it important for me to have a neutral of
my choice well-versed in my field?
Are there business relationships to
preserve?
How much control do I want over the
process and outcome?
Negotiation Mediation Arbitration Litigation
Confidential
Enforceable
locally
(cf
Singapore)
Enforceable
internationally
(156 NY
Convention
countries)
(depends)
Ability to
choose Neutral
(no Neutral)
Able to
preserve
relationship
Control over
Outcome
Factors to Consider
Suggested Approach
• Have a dispute resolution strategy, e.g.
• Direct discussions and negotiations between business representatives as a first resort
• Mediation if direct discussions and negotiations do not lead to settlement
• If mediation does not settle the entire dispute, arbitration or litigation as a last resort
• Embody the dispute resolution strategy in a dispute resolution clause in your contracts
• Periodically review the dispute resolution strategy to see if change is required
• When any dispute arises, at an early stage, it is important to assess frankly and thoroughly the strengths and weaknesses of the case (see e.g. https://imimediation.org/private/downloads/0Af3ZGU3PGhmdgh99anhpA/Ol%C3%A9!%20Case%20Evaluation%20Tool.pdf)
The Future of International Dispute Resolution
2013 – Living with ADR: Evolving Perceptions and Use of Mediation, Arbitration and Conflict Management in Fortune 1000 Corporations
(Harvard Negotiation Law Review)
Fortune 1000 Use of Forms of ADR in Prior 3 Years
87%80%
40%
20% 20%
0% 0%10%
30%
98%
83%
51%
31%
15%
36%
66%
14%
39%
0%
20%
40%
60%
80%
100%
120%1997 2011
Global ADR Trends
2016 – Global Pound Conference Aggregate Data
What Innovations/Trends are going to have the most significant influence on the future of commercial dispute resolution?
24%
26%
29%
53%
60%
Enhanced understanding regarding
how people behave and resolve…
Technological innovation, e.g. online
dispute resolution
Harmonisation of international laws
and standards for dispute resolution
Changes in corporate attitude to
conflict prevention
Greater emphasis on collaborative
instead of adversarial processes
Global ADR Trends
2016 – Global Pound Conference Aggregate Data
To improve the future of commercial dispute resolution, which of the following processes/tools should be prioritised?
20%
28%
34%
43%
52%
Technology to enable faster, cheaper
procedures
Encouragement by courts, tribunals or
other providers to reduce time/costs
Non-adjudicative dispute resolution
methods
Combining adjudicative and non-
adjudicative processes
Pre-dispute or pre-escalation process
to prevent disputes
Global ADR Trends
Singapore’s Offerings
Mediation
LitigationArbitration
• The SIAC-SIMC Arb-Med-Arb Service is a one-stop process
where parties attempt mediation in the course of arbitration
proceedings
• If mediation is successful, parties may request their mediated
settlement be made a consent arbitral award
• If mediation is unsuccessful, parties may proceed with arbitration
• SIAC and SIMC provide institutional support throughout process
SIAC-SIMC Arb-Med-Arb Service
Arbitration Mediation Arbitration
Any dispute arising out of or in connection with this contract, including any
question regarding its existence, validity or termination, shall be referred to
and finally resolved by arbitration administered by the Singapore
International Arbitration Centre (“SIAC”) in accordance with the Arbitration
Rules of the Singapore International Arbitration Centre ("SIAC Rules") for the
time being in force, which rules are deemed to be incorporated by
reference in this clause.
The seat of the arbitration shall be [Singapore].*
The Tribunal shall consist of _________________** arbitrator(s).
The language of the arbitration shall be ________________.
* Parties should specify the seat of arbitration of their choice. If the parties wish to select an alternative seat to Singapore, please replace “[Singapore]” with the city and country of choice (e.g., “[City, Country]”).
** State an odd number. Either state one, or state three.
Singapore Arb-Med-Arb Model Clause
The parties further agree that following the commencement of arbitration,
they will attempt in good faith to resolve the Dispute through mediation at the Singapore International Mediation Centre (“SIMC”), in accordance
with the SIAC-SIMC Arb-Med-Arb Protocol for the time being in force. Any
settlement reached in the course of the mediation shall be referred to the
arbitral tribunal appointed by SIAC and may be made a consent award on agreed terms.
Singapore Arb-Med-Arb Model Clause
Each party irrevocably submits to the [exclusive/non-exclusive]*
jurisdiction of the Singapore International Commercial Court all
disputes arising out of or in connection with the present contract,
including any question relating to its existence, validity or termination.
Singapore International Commercial Court Model Clause
