Alternative Dispute Resolution(ADR).pptx

About ADR

1. Alternative Dispute Resolution(ADR) By FM

2. DEFINITION OF THE CONFLICT(1) How can we name opposition of interests? Disagreement » opinion differences or simply differences in points of view. Conflict » disagreement followed by actions against each other. Dispute » disagreement connected with violation of rights (legal concept). The same issue may cause disagreement, conflict, dispute or even WAR!

3. What is Dispute Resolution? Dispute resolution involves bringing two or more discordant parties to clear understanding wherein their differences are ironed out. It points to every technique applied for settling dispute between entities. Definition of ALTERNATIVE DISPUTE RESOLUTION (ADR) A lternative D ispute R esolution, or ADR is the means of resolving a dispute without having to go to court.

4. Features of ADR: Informality; Allowance for the parties to control the procedure as well as it’s outcomes; Possibility to involve the third neutral person; Special role of neutrals (if they are involved).

5. A.D.R.s Very effective in:- Domestic International Commercial disputes A.D.Rs – benefits Low costs and formalities  Expeditious Parties’ participation – maximum  Result – win - win

6. Preserves relationships Provides durable resolution of disputes Preserves confidentiality Avoids establishing legal precedents Interested parties have more control over the process Parties Attorneys Management

7. Limitation of A.D.Rs Not workable in all disputes/penal offences Hidden costs Awards challengeable  Chances of failure

8. Principles Underlying ADR Prevention is the first goal Speedy, direct resolution Conflicts should be dealt with at the most informal level of dispute resolution possible Interest based Right based Power based

9. Trends Costs of litigation are increasing Legal expertise is in demand, expensive and access is limited Most states across the US have instituted Ethical Guidelines for Mediators and State ADR Acts Judges are referring cases to mediation 10% or less of lawsuits filed are actually resolved by a judge or jury verdict Even when “you know you’re RIGHT,” ADR still proves beneficial Beneficial for value-based relationships High level of receptivity due to time and cost savings

10. Chapter Two: Types of ADR Negotiation Mediation Conciliation Arbitration

11. A. N egotiation What is Negotiation? Negotiation is a method by which people settle differences.  It is a process by which compromise or agreement is reached while avoiding argument and dispute . In any disagreement, individuals understandably aim to achieve the best possible outcome for their position (or perhaps an organization they represent).

12. However, the principles of fairness, seeking mutual benefit and maintaining a relationship are the keys to a successful outcome . Specific forms of negotiation are used in many situations: international affairs, the legal system, government, industrial disputes or domestic relationships as examples . However, general negotiation skills can be learned and applied in a wide range of activities.

13. ILLUSTRATION       A  person discussing with the other person  B  regarding salary negotiation. Here bargaining the salary is considered a negotiation . In any negotiation, the following three elements are important and likely to affect the ultimate outcome of the negotiation: Attitudes Knowledge Interpersonal Skills

14. Negotiation characteristics : A. Voluntary : None of the parties to a negotiation are required to participate. The parties are free to accept or reject the results of the negotiations and to halt the procedure at any time . Parties have the option of taking part in the negotiations personally or choosing to have a third party, such as a relative, friend, attorney, or other professional, represent them.

15. B. Bilateral/Multilateral : There may be two, three, or even dozens of parties involved in negotiations. They can range from discussions involving diplomats from dozens of States (like the World Trade Organization (WTO)) to two people trying to reach an agreement on the sale of a house .

16. C. Non-adjudicative: Only the parties to the negotiation make decisions. The parties to a negotiation decide on the outcome collectively, without using a third party.

17. Negotiation skills can be of great benefit in resolving any differences that arise between you and others . Stages of Negotiation In order to achieve a desirable outcome, it may be useful to follow a structured approach to negotiation. For example, in a work situation a meeting may need to be arranged in which all parties involved can come together.

18. The process of negotiation includes the following stages : Preparation Discussion Clarification of goals Negotiate towards a Win-Win outcome Agreement Implementation of a course of action

19. Preparation Before any negotiation takes place, a decision needs to be taken as to when and where a meeting will take place to discuss the problem and who will attend. Setting a limited time-scale can also be helpful to prevent the disagreement continuing . This stage involves ensuring all the pertinent facts of the situation are known in order to clarify your own position . In the work example above, this would include knowing the ‘rules’ of your organization, to whom help is given, when help is not felt appropriate and the grounds for such refusals.

20. Your organization may well have policies to which you can refer in preparation for the negotiation. Undertaking preparation before discussing the disagreement will help to avoid further conflict and unnecessarily wasting time during the meeting . 2. Discussion During this stage, individuals or members of each side put forward the case as they see it, i.e. their understanding of the situation. 

21. Key skills during this stage include  questioning ,  listening  and  clarifying . Sometimes it is helpful to take notes during the discussion stage to record all points put forward in case there is need for further clarification.  It is extremely important to listen, as when disagreement takes place it is easy to make the mistake of saying too much and listening too little.  Each side should have an equal opportunity to present their case.

22. 3. Clarifying Goals From the discussion, the goals, interests and viewpoints of both sides of the disagreement need to be clarified. It is helpful to list these factors in order of priority.  Through this clarification it is often possible to identify or establish some common ground . Clarification is an essential part of the negotiation process, without it misunderstandings are likely to occur which may cause problems and barriers to reaching a beneficial outcome.

23. 4. Negotiate Towards a Win-Win Outcome This stage focuses on what is termed a 'win-win' outcome where both sides feel they have gained something positive through the process of negotiation and both sides feel their point of view has been taken into consideration . A win-win outcome is usually the best result. Although this may not always be possible, through negotiation, it should be the ultimate goal.

24. Suggestions of alternative strategies and compromises need to be considered at this point.  Compromises are often positive alternatives which can often achieve greater benefit for all concerned compared to holding to the original positions . 5. Agreement Agreement can be achieved once understanding of both sides’ viewpoints and interests have been considered.

25. It is essential to for everybody involved to keep an open mind in order to achieve an acceptable solution.  Any agreement needs to be made perfectly clear so that both sides know what has been decided . 6. Implementing a Course of Action From the agreement, a course of action has to be implemented to carry through the decision.

26. 2. MEDIATION: What is mediation? Mediation is an alternative dispute resolution process where the parties engage in negotiation to resolve the issues in dispute.  An independent third party, the mediator, will assist the parties to identify the key issues in dispute and consider options and alternatives to settle the matter . Mediation can be voluntary, court ordered or required as part of a dispute resolution clause in a contract.

27. The mediator acts as an independent third party who facilitates the discussion between the disputing parties. They will explain how the mediation will take place, identify the real issues in dispute by asking questions to the parties and help develop options to resolve the dispute . In most mediations, the parties will be physically separated - as in, they will sit in different rooms, with the mediator speaking with one party at a time, shuffling between parties through the course of the mediation.

28. As an independent third party, the mediator can provide innovative solutions that the parties may not have considered prior to the mediation. However , they will not give advice, take sides or make decisions . In commercial disputes, and depending on the size of the matter, mediators are often retired judges or other senior lawyers . A mediation usually occurs over the space of a single day.  However the parties are able to adjourn a mediation and reconvene on another date if they agree that it may result in a resolution.

29. Illustration M person has a disputed issue with person N. Both M and N agree to choose a mediator because in mediation the parties have the power to appoint and to agree or not to agree with the settlement. In this case M and N dispute sort out and at the end of the day both parties get benefits.

30. What are the advantages of mediation? Some of the key advantages of mediation include: It is much less formal and more cost effective than arbitration or litigation; It is confidential; The parties can offer creative settlements that go beyond usual monetary offers. This allows both parties to make offers that protect their commercial interests which can facilitate a win/win outcome;

31. compared with litigation or arbitration, it is extremely inexpensive; it happens over a relatively short space of time. Even where mediation does not resolve the matter, the process can clarify the issues in dispute which will help keep costs down if the matter goes to arbitration or litigation . Mediation may not be suitable where the commercial relationship has broken down and there is a real sense that one of the parties is not willing to negotiate.

32. The obvious disadvantage with mediation is that it's not guaranteed to produce an outcome. It depends on both parties being willing to negotiate, and their ability to reach an agreement that will be acceptable to both of them .

33. TYPES OF MEDIATION Evaluative mediation: The mediator evaluates the claims or rights of the parties having regard to the applicable legal rules Facilitative or problem-solving mediation: The mediator helps the disputants to resolve their differences by facilitating communication and the search for creative (mutual gain) solutions .

34. Therapeutic mediation: The mediator helps parties "heal the hurt" caused by disputes and may facilitate a "reconciliation" between the disputants . Transformative mediation: The objective of mediation is to transform the disputants, both individually and in relation to one another through "empowerment" (disputants improve or learn new skills to resolve their own disputes) and "recognition" (understanding the other side's perspective, thereby creating "empathy" for the other).

35. 3 . CONCILIATION: Conciliation is the process of resolving disputes without resorting to litigation. It is a non-binding process in which a conciliator, or third party, attempts to bring the disputants to an agreement .  He resolves disputable issues by reducing tension, improving communication, interpreting issues, providing technical assistance, exploring potential solutions, and presenting the negotiated settlement to the parties.

36. Conciliate uses his method to resolve the dispute, and his steps are not strict or legal. There is no need for an agreement such as an arbitration agreement. Both parties must agree to the terms of the settlement. CONCILIATION METHODS : A. Voluntary Conciliation- In this method, parties can voluntarily participate in the conciliation process to resolve their dispute.

37. B. Compulsory Conciliation- If parties do not want to pursue voluntary conciliation, they can pursue compulsory conciliation. If the parties do not want to meet with the other party to resolve the dispute, the process is said to be mandatory. This method is frequently employed in labor cases.

38. Illustration: X a trade union has issues regarding the payment of wages so they went against management Y. The case came in front of Z conciliation officer for conciliation. Z needs to complete the matter within 90 days.

39. DIFFERENCE BETWEEN MEDIATION AND CONCILIATION : Mediation is a technique for resolving disputes between parties in which a third party assists them, as opposed to conciliation, which appoints an expert to resolve disputes between the parties . Reliability Confidentiality is governed by law and is dependent on public faith in mediation . The conciliator serves as both a facilitator and an assessor, while the mediator serves as both

40. Chapter Three: Arbitration When you see the history you can know that arbitration was started during the period of king Solomon. So the very first arbitration case emerged between two mothers claiming for a single baby boy. Arbitration is the first form of alternate dispute resolution method in which two parties come together and coordinate with each other and then appoint a third party or a person who is known as an arbitrator.

41. The main purpose of the arbitrator is to avoid court proceedings . Usually in India, An arbitrator is appointed in dispute matters like labor disputes, business disputes, consumer disputes, and family matters. Businessmen go with alternate dispute resolution just too speedy the case matters and to sort out immediately . The only difference between arbitration and trial is arbitration takes place outside of the court.

42. Document verification, hearings, evidence reviews, and the decision are the same as in court manner. It is formal and legally binding in nature . ILLUSTRATION:                       X   a trade union is conducting a strike action against the employer Y because they can’t agree with the decision made by the employer so here the trade union move to the independent arbitrator Z to solve the issue as soon as possible.

43. The purpose of arbitration is to ensure just  an  impartial dispute resolution, which provides  the  parties full freedom and control on the matter .  It also delivers a speedy decision which saves time as well as proves less expensive as compared to the tedious judicial process in a traditional courtroom system.  It  takes away the excess burden and backlog from the judiciary.

44. What are the advantages of arbitration ? Some of the key advantages of arbitration include: Unlike mediation, it is certain to result in a resolution of the dispute. This is because there will be a final binding award  made by an independent third party;  It is sometimes more efficient and cost effective than litigation;

45. Unlike litigation, arbitration remains confidential; and The process is flexible and can sometimes be determined by the parties . While arbitration can sometimes be cheaper than litigation, often it will end up costing roughly the same . The parties will still have to pay legal fees (and usually the other party's fees if they are unsuccessful), the adjudicator’s fees and other incidental costs (such as transcript fees and room hire costs).

46. Depending on the nature of the dispute, it is rare for a commercial arbitration to be concluded in less than 6 months. At the same time, it is not uncommon for an arbitration to run for more than a year (just like litigation ). Arbitration can provide an effective means of resolving a dispute where mediation or negotiation has failed, and where the parties would prefer for the dispute to be kept outside the public domain.

47. Types of arbitration A. Ad hoc  Arbitration This kind of arbitration is generally independent of any arbitration institution . Ad hoc  arbitrations are particularly more appropriate for disputes involving governments.  An ad hoc arbitration is one which is not administered by an institution and therefore, the parties are required to determine all aspects of the arbitration like the number of arbitrators, manner of their appointment, procedure for conducting the arbitration, etc.

48. Ad hoc arbitration is a proceeding that is not administered by others and requires the parties to make their own arrangements for selection of arbitrators and for designation of rules, applicable law, procedures and administrative support. It allows the parties more flexibility and provides them with more control over the arbitration . The absence of administrative fees alone provides an excellent incentive to use the ad hoc procedure.

49. Generally,  ad hoc  arbitration clauses are longer and more detailed than institutional arbitration clauses, especially in terms of the procedure for the arbitration such as how the arbitrators are to be appointed, how many arbitrators should be there etc . United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules are the most common suspect for the conduct of this kind of arbitral proceedings.

50. If the parties do not agree on any rules or the procedure, usually default provisions of the law of the place of arbitration will be applicable . Advantages of ad hoc arbitration Flexibility which enables the parties to decide upon the dispute resolution procedure . This necessarily requires a greater degree of effort, co-operation and expertise of the parties in determination of the arbitration rules.

51. It is less expensive than institutional arbitration. The parties only pay fees of the arbitrators', lawyers or representatives, and the costs incurred for conducting the arbitration i.e. expenses of the arbitrators, venue charges, etc . They do not have to pay fees to an arbitration institution which, if the amount in dispute is considerable, can be prohibitively expensive.

52. In ad hoc arbitration, parties negotiate and settle fees with the arbitrators directly, unlike institutional arbitration wherein the parties pay arbitrators' fees as stipulated by the institution . This allows them the opportunity of negotiating a reduction in fees . But this involves an uncomfortable discussion & in certain cases, the parties may not be able to negotiate a substantial reduction or for that matter, any reduction at all.

53. B. Institutional Arbitration An institutional arbitration is one in which a specialized institution with a permanent character intervenes and assumes the functions of aiding and administering the arbitral process, as provided by the rules of that institution . Each institution has its own set of rules which provide a framework for the arbitration, and its own form of administration to assist in the process.

54. It is pertinent to note that these institutions do not arbitrate the dispute, it is the arbitrators who arbitrate, and so the term arbitration institution is inappropriate and only the rules of the institution apply . Some common institutions are the London Court of International Arbitration (LCIA), the International Chamber of Commerce (ICC), the Dubai International Finance Centre (DIFC) and the Dubai International Arbitration Centre (DIAC). 

55. When a dispute arises, the named arbitration institution administers and manages the smooth conduct of the arbitration from the appointment of arbitrators to (sometimes) scrutinise the arbitral awards under its rules of arbitration . In institutional arbitration, the first issue arising for agreement of the parties is choice of the institution, appropriate for the resolution of disputes, arising out of their contract.

56. Advantages Availability of pre-established rules and procedures which assure that arbitration will get off the ground and proceed to conclusion with dispatch ; Administrative assistance from institutions providing a secretariat or court of arbitration ; Lists of qualified arbitrators, often broken out by fields of expertise;

57. Appointment of arbitrators by the institution should the parties request it ; Physical facilities and support services for arbitrations; Assistance in encouraging reluctant parties to proceed with arbitration An established format with a proven record

58. One of the advantages of arbitration is that it provides for final & binding determination of the dispute between the parties . In other words, no review or appeal lies against an arbitral award to ensure finality. This involves an inherent risk that mistakes committed by the tribunal cannot be corrected, whereby one party would inevitably suffer.

59. However, some institutional rules provide for scrutiny of the draft award before the final award is issued and some provide for a review procedure . The latter entitles the dissatisfied party to appeal to an arbitral tribunal of second instance, which can confirm, vary, amend or set aside the first award and such decision in appeal is considered to be final and binding upon the parties

60. Contrasting this to ad hoc arbitration where there is no opportunity for appeal or review and the parties have to be prepared to suffer for the mistakes of the arbitrators, this is a redeeming feature of institutional arbitration as it allows the parties a second chance of presenting their case and also permits the rectification of mistakes made by the tribunal of first instance.

61. The Position of Alternative Dispute Resolution in Ethiopia today The modern attempt at introducing ADR into the Ethiopian legal system started with the promulgation of the Civil Code of 1960 and the Civil Procedure Code of 1965 . Under the provisions of the Codes, conflict resolution is centered more on contractual or legal relations . Article 3307 of the Civil Code defines a compromise as a contract whereby the parties, through mutual concessions, terminate an existing dispute or prevent a dispute arising in the future.

62. Under the Ethiopian law, compromise is a means of creating, modifying or terminating a contractual obligation. Once a compromise is arrived at between the parties it now becomes a final and settled matter – res judicata . It cannot be appealed against for trivial reasons except for fraud, duress and other compelling illegalities in the process of reaching the compromise.

63. Arbitrability In Ethiopia, arbitrability is simply the notion of whether a dispute falls within the category of disputes that can be resolved by arbitration . What disputes are not arbitrable in Ethiopia are listed under Article 7 of Arbitration and Conciliation Working Procedure Proc.1237/2021. This includes divorce, adoption, guardianship, tutorship, succession, criminal cases, tax cases, judgments on bankruptcy, decisions on the dissolution of business organizations, all land cases, including leases, administrative contracts,

64. except where permitted by law, trade competition and consumer protection, and administrative disputes falling under the powers given to relevant administrative organs by law . Jurisdiction Jurisdiction refers to the scope of powers of the arbitration tribunal. Article 19 of Proclamation 1237 provides that the arbitral tribunal can determine its own jurisdiction.

65. With regard to an objection against the decision of the tribunal on its jurisdiction, Art. 19(5) provides that an objection against the decision of the tribunal on its jurisdiction shall be submitted to the First Instance Court within one month from the date of rendering such a decision . The submission of an objection in accordance with Sub-Article (5) of this Article shall not prevent the tribunal from continuing with the arbitration proceedings and rendering an award according to Article 19(6).

66. The submission of an objection in accordance with Sub-Article (5) of this Article shall not prevent the tribunal from continuing with the arbitration proceedings and rendering an award according to Article 19(6). The implication of Art. 19(5) and 19(6) is that arbitration will not be stayed because of a jurisdictional objection. The implication is that defendants will not delay arbitration by raising jurisdictional objections.

67. The tribunal may go on and issue its award, and the court may rule that the tribunal doesn’t have jurisdiction. In which case, the award will be void . The arbitration agreement An arbitration agreement is an agreement to submit present or future disputes between the parties to arbitration. The notion of an arbitration agreement comprises two basic types:

68. a) A clause in a contract by which the parties to a contract undertake to submit to arbitration the disputes that may arise in relation to that contract (arbitration clause); or b) An agreement by which the parties to a dispute that has already arisen submit the dispute to arbitration (submission agreement). The arbitration agreement has to be in writing in light of Art. 6 of Proc. 1237/2021.

69. An arbitration agreement has to be written, signed, and attested by witnesses in light of Article 6 of Proc. 1237/2021. Arbitration agreement can be made by electronic means such as emails, telegrams, etc. that can be retrieved . The Arbitration Tribunal : The Arbitration Tribunal is a sole arbitrator or a panel of arbitrators that hears the case and makes the award or other necessary orders.

70. With regard to the appointment of arbitrators, contracting parties are free to agree on the procedure for the appointment of arbitrators, whether by arbitration centers or by a third party, in light of Article 12 of Proc. 1237/2021. Objection is possible if there are circumstances that create justifiable doubts as to impartiality, independence, or fulfillment of the criteria stated in the arbitration agreement.

71. Right of Arbitrators  Right to fee Duties of Arbitrators  The duty to be and remain impartial and independent The duty to conduct the arbitration in an efficient manner Duty to decide the case expeditiously Not meet any of the parties separately. Not to receive any gifts from the parties

72. Appeal under Proclamation No. 1237/2021 According to Proclamation No. 1237/2021, Article 49 an appeal is not automatically available; it depends on the presence of an agreement. Article 49(1) states that unless the contracting parties agree otherwise in their arbitration agreement, no appeal shall lie to the court from an arbitral award. In the absence of agreement between the parties, there is no appeal. With regard to an error of law, parties can exclude cassation by agreement.

73. Article 49(2) of Proclamation 1237/2021 provides that unless there is agreement to the contrary, an application for cassation can be submitted where there is a fundamental or basic error of law. According to the above provision, cassation review is available unless excluded by agreement.

74. Article 49(3) provides exceptions for exceptions. It provides grounds on which appeals are never allowed, even if the parties agree to appeal. Appeal on arbitration on equity, According to Art. 41(5), an arbitral award may be granted based on equity or known commercial practices where such power is expressly given to the tribunal by the contracting parties or the applicable law authorizes such application. With regard to such an arbitral award, parties cannot appeal even by entering into an agreement.

75. Arbitration on agreed terms/consent award: According to 43, when contracting parties have resolved their dispute by agreement before an arbitral award is rendered on the subject matter of the arbitration, parties cannot appeal to court by opposing such a decision even by entering into an agreement. Arbitration without reason: according to Art. 44(2), contracting parties may agree not to disclose the reason or whether the arbitral award is granted based on mutual consent. With regard to such decisions, parties cannot appeal to the court even after entering into an agreement.

76. In light of Article 49(3) of Proclamation 1237/2021, parties cannot appeal on the above-listed grounds even by entering into an agreement. Article 49(3) limits parties’ autonomy by limiting their contractual power with regard to appeals.