While it may be pessimistic to consider the “what if” when drafting dispute resolution clauses at the beginning of a business relationship, considering these points should not be seen as an admission of the possibility of failure, but as the best chance of success of your contract. The proper dispute resolution clause puts you in the best position to handle disputes constructively and cost-effectively when they arise, and also gives you the best chance of maintaining a friendly relationship if you wish. It depends very much on the wording of the section; The parties may express that a certain step in the process is optional. However, it is important to note that the courts in England and Wales expect the parties to attempt to resolve their dispute through THE EXTRAJUD SETTLEMENT AND THAT THERE MAY BE PENALTIES FOR A PARTY WHO DOES NOT PARTICIPATE IN THE ALTERNATIVE SETTLEMENT, EVEN IF THAT PARTY ULTIMATELY WINS – SEE OUR ARTICLE “Should I CONSIDER Mediation?” Therefore, even if the parties are not contractually required to follow all the steps of the dispute settlement clause, they would do well to participate in ADR if their dispute is ultimately brought before the courts of England and Wales. In the case of international contracts, it may be considered a disadvantage if a dispute is submitted to the “court of origin” of a counterparty, particularly if the other party is a state entity. Arbitration allows the parties to refer their disputes to a neutral jurisdiction. In addition, the consensual nature of arbitration means that the parties can ensure that the composition of the arbitral tribunal, as well as the seat of the arbitration and the place of a hearing, are neutral. On the question of the interpretation of the dispute settlement clause, Judge Akenhead, a judge of the English High Court, said that the interests of anti-risk companies often seek ways to avoid the uncertainty associated with jurors. The right to a jury trial is a fundamental right guaranteed by our federal and state constitutions. Menschen gegen Bracey, 213 Fig. 2d.

265, 269 (Fig. 2004). However, the Illinois Constitution has been interpreted by our Supreme Court to mean the right to a jury trial, as it existed at common law and when the Constitution was passed. Persons ex rel. Cizek v Azzarello, 81 Fig. App.3d. 1102, 1105 (1st Dist. 1980). This does not mean that a jury trial must take place in all cases, nor does it preclude any restriction on the exercise of this right.

While the right to a jury trial is fundamental, it can be knowingly and voluntarily nullified by contract. In re Reggie Packing Co., Inc., 671 Scup. 571, 573 (N.D.IL 1987]). Arbitration. Any dispute, controversy or opinion arising between the parties arising out of or in connection with this Agreement or arising out of the breach of this Agreement shall be settled solely by arbitration in the Hong Kong Special Administrative Region of the People`s Republic of China. This arbitration shall be conducted in English in accordance with the Arbitration Rules of the International Chamber of Commerce by three (3) arbitrators, one of whom shall be appointed by the Buyer and/or the Parent, another by the Seller and the third by the first two (2) arbitrators. If the third arbitrator is not so appointed within one (1) month of the appointment of the first two (2) arbitrators, the third arbitrator shall be selected in accordance with the Arbitration Rules of the International Chamber of Commerce. The decision of the arbitrators shall be made in accordance with the principles of majority rule. The arbitral award rendered by the arbitrators shall be final and binding on the parties and may be enforced in any court of competent jurisdiction.

Notwithstanding the foregoing, the Parties have the right to initiate legal proceedings at any time during the ongoing arbitration proceedings in order to obtain an application for an interim injunction, provided that such interim injunctive relief is subject to final arbitration decisions. Unless the arbitrators decide otherwise, the costs of the arbitration shall be borne equally by the Buyer and/or the parent company on the one hand and the Sellers on the other hand. A jurisdiction clause should be included if the parties wish all disputes arising from their agreement to be decided by one or more specific national courts. A party who expressly submits to the courts of a particular jurisdiction will find it difficult to argue that these courts are not the appropriate place for the negotiation of disputes. A dispute resolution clause is beneficial to both parties because it allows them to control how they resolve disputes. It also provides for an alternative resolution that can save time and money. This clause saves time because the dispute resolution terms are set out in the contract and are not open to further negotiations. It also saves money as it avoids litigation and refocuses the parties on their business. If a dispute arises out of or in connection with this Agreement, the parties agree to meet to find a solution through negotiation or other appropriate dispute resolution before resorting to a dispute. You may also want to consider adding this to dispute settlement clauses: if one of the parties is a state or state entity, a waiver of the sovereign immunity clause is necessary to ensure that a judgment or arbitral award can be enforced.

This guide highlights the main considerations to consider when drafting dispute settlement clauses. A seller may apply such restrictive dispute resolution covenants if they provide for the possibility of simple arbitration to collect outstanding claims. However, parties should be aware that to have a good chance of success, alternative dispute resolution methods must approach it with an open mind and prepare appropriately, rather than treating it as a “checkbox” exercise. This, in turn, means that there are additional costs to participate in alternative dispute resolution procedures (including the parties` legal fees and the neutral third party fees), so that if alternative dispute resolution fails to resolve the dispute or limits the problems, it increases the total cost of resolving the dispute rather than saving it. Useful guidelines for the development of skillful clauses have been published by these organizations at these addresses on the Internet: If a dispute arises out of or in connection with this contract and the parties do not resolve the dispute in whole or in part through negotiation, either party to the dispute may immediately submit a notice of the intention to mediate. Such notification must be in writing and contain information on the issues in dispute. Structured negotiations and/or mediation provide parties with alternatives to arbitration and litigation and provide faster, more cost-effective and flexible methods of dispute resolution. .