I. INTRODUCTION
What is meant by the term 'Alternative Dispute Resolutions' and how do
such schemes operate?
This Examples and Explanations Series on Alternative Dispute Resolutions
will explain briefly why alternatives to the ordinary court system have
been developed and consider the operation of arbitration as compared to
the ordinary courts. It will refer specifically to the draft Commercial
Arbitration Law currently awaiting ratification by the Parliament. It
will also consider the distinction between mediation and conciliation as
well as detailing how and when they are likely to be used.
It is recognized generally that the formal atmosphere of the ordinary
courts is not necessarily the most appropriate one in which to determine
all disputes that might need adjudication. In recognition of this fact,
various alternatives have been developed specifically to avoid the
perceived shortcomings of court procedure. These alternatives are known
collectively as alternative dispute resolution procedures.
The first and oldest of these alternative procedures is arbitration.
Arbitration is the procedure whereby parties in dispute refer the issue
under contention to a third party for resolution, rather than by
instituting legal proceedings in the courts. This practice is well
established in commerce and industry and its legal effectiveness has
long been recognized by the court. In contemporary business practice it
is a matter of common practice for commercial contracts to contain
express clauses referring any future disputes to arbitration.
It is important to note that although the courts will recognize the
efficacy of such provisions referring future disputes to arbitration and
will enforce any award properly arrived at, such provisions are no
different from other terms of a contract and, in line with the normal
rules of contract law, courts will strike out any attempt to oust their
ultimate jurisdiction as being contrary to public policy. The courts
have no objection to individuals settling their disputes on a voluntary
basis but at the same time they are careful to maintain their
supervisory role in such procedures.
The other alternative dispute mechanisms to be considered conciliation
and mediation are the most informal of all. Conciliation takes mediation
a step further and gives the mediator the power to suggest grounds for
compromise and the possible basis for a conclusive agreement. Mediation
is the process through which a third party acts as the conduit to allow
two disputing parties to communicate and negotiate in an attempt to
reach a common resolution of a problem.
The essential weakness in these two procedures, however, lies in the
fact that, although they may lead to the resolution of a dispute, they
do not necessarily achieve that end. Where they operate successfully
they are excellent methods of dealing with problems, because,
essentially, the parties to the dispute determine their own solutions
and therefore feel commitment to the outcome. The problem is that these
procedures have no binding power and do not always lead to an outcome.
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