Alternative Dispute Resolution (ADR) are methods through which disputing parties seek to settle their conflict outside the state judicial system. Throughout this brief, we cover three main topics: the four types of ADR methods used to resolve disputes between both parties (I), the list of institutions that provide such services to clients locally and globally (II). Lastly, we discuss the current implications of COVID19 on ADR (III).
- Forms of ADR methods
The four mainstream ADR methods are Arbitration (A), Mediation (B), Conciliation (C) and Negotiation (D). We discuss each format's various advantages, which can be tailored to each party's needs below:
Arbitration is a process by which disputing parties refer their conflict to one or more private persons "arbitrators" for the latter to render a binding decision, known as an "arbitral award."
According to Dr Roland Kläger, references to arbitration as a dispute resolution method can be traced back to the 1610s in the early codifications of German procedural law. Additionally, the 1899 and 1907 Hague Peace Conferences affirmed its significance in the dispute resolution world.
Arbitration is generally divided into "Ad hoc Arbitration" and "Institutional Arbitration." The former is a more flexible form of arbitration that allows the parties the freedom of shaping the procedural aspect of the arbitral proceedings, whilst the parties' recourse to the latter means that an entity "Arbitral Institution" will be administering and supervising the arbitral proceedings.
Arbitration is a method used to settle various types of disputes between entities. For example, arbitration mitigates conflict between private entities regarding their commercial relationship, commonly known as "commercial arbitration." Additionally, arbitration aids in settling disagreements between States "inter-State arbitration", as well as assisting in minimizing conflict between a private investor and a State "investor-State arbitration."
Although arbitration is generally perceived as a consensual method, there are cases where arbitration is the primary procedure used in national laws.
Coincidentally, arbitration is currently the only ADR provided for and regulated by Egyptian law (see Law No. 27/1994 Promulgating the Law Concerning Arbitration in Civil and Commercial Matters).
Mediation is when the parties appoint a neutral person, "the Mediator," to guide negotiations to settle the dispute. However, the decision rendered during the mediation process is non-binding and cannot be enforced upon the parties.
According to Harvard Law School professor Frank E. A. Sander, mediators play a significant role in mitigating communication between parties. For instance, they help uncover information that either party does not wish to disclose. Additionally, mediators can share their impartial expertise to help the parties reach a satisfactory resolution.
Conciliation is when the parties assign a neutral third party to use their expertise in investigating the dispute and, therefore, use it to construct a recommendation report for the parties to resolve their dispute. Consequently, a conciliator naturally plays a more active role in settling the conflict; however, their report is non-binding upon the parties.
Negotiation is primarily considered a preliminary step in dispute settlement; it involves the parties communicating directly to settle their pending dispute.
- Institutions offering ADR services locally and globally
Recently, the industry providing ADR services flourished due to the increase of parties willing to resort to these methods to help settle disputes.
Established in 1979, "Cairo Regional Centre for International Commercial Arbitration (CRCICA)" is among the several institutions offering services to ADR clients. In addition to providing several ADR related services, the centre acts as an arbitral institution and a mediation centre.
The most notable international institutions are:
- The London Court of International Arbitration (LCIA), founded in 1891.
- The Permanent Court of Arbitration (PCA), established in 1899.
- The International Chamber of Commerce (ICC), founded in 1923.
- The International Centre for Settlement of Investment Disputes (ICSID), founded in 1966.
- The Dubai International Arbitration Centre (DIAC), founded in 1994.
- COVID-19's implications on ADR
Kim M Rooney, a renowned international arbitrator, shared in the journal of the IBA's Dispute Resolution Section that "the conduct of international arbitration has been less affected (concerning litigation), as a move to online proceedings was already underway before the pandemic was accelerated. Online mediation has proven to be highly effective."
Court closures due to precautionary measures causing a backlog of cases have pushed parties to seek ADR to settle their disputes quicker and more conveniently. What made ADR particularly appealing to entities is its ability to adapt to the current conditions; this can be observed through the development of Online Dispute Resolution (ODR). The United Nations Commission defines the ODR on International Trade Law as "a mechanism for resolving disputes facilitated through the use of electronic communications and other information and communication technology."
The flexible nature of ADR has allowed this type of service to claim its place as a reliable resort for disputing parties.
ADR is adaptable to new conditions, time-efficient, reliable and confidential for the most part, which is why ADR is here to stay, especially with the COVID-19 crisis proving its place among individuals and entities worldwide.
To view our sources, please click on the attached file below.
1 - Attachment 1