Resolution of intl commr disputes

1. International Dispute Resolution Litigation Differs within countries Complication of evidence, witnesses and documents Judicial system may be different from country to country Some courts more influenced by political pressures Not enforceable outside of country Treaties/Conventions may assist potential parties Contract clauses assist courts in enforcement of claims Usually need “minimum contacts” for jurisdiction International Court of Justice (ICJ ) Only nations have standing - not individuals Nations may make claims on behalf of persons No mandatory compliance requirement UN Security Council must enforce Arbitration : 3rd neutral party decides outcome, which is binding Mediation : 3rd neutral party “suggests” outcome, which is not binding 11/23/2012 1 [email protected]

2. Resolution of International commercial/business disputes Disputes: Valuable things at risk, such as: Time Money for expenses incurred trying to resolve dispute, lost earnings Business relationship and future earnings Loss of market to competition Loss of reputation Freedom if a criminal offence and dispute is with authorities/society. Political issues between states and countries 11/23/2012 2 [email protected]

3. Methods of dispute resolution Prevent the dispute by risk management Avoid some disputes by drafting contracts well Negotiation Mediation and conciliation Expert determination Arbitration Litigation/Adjudication 11/23/2012 3 [email protected]

4. Legal role in Risk Management Objective is to avoid dispute or minimise damage resulting from a dispute Must understand business Conduct due diligence to ascertain main areas where dispute/legal liability likely to arise Appreciate bargaining position and opportunities/limitations 11/23/2012 4 [email protected]

5. Negotiation Win/win mentality means both parties must come out of the negotiation with an improvement in their situation. Skill lies in formulating such an outcome. Win/loss means that one side is better off and one worse off. May resolve immediate dispute, but might lead to loss of relationship, or retaliation later. 11/23/2012 5 [email protected]

6. Mediation Parties appoint a person who assists them to reach a negotiated resolution. Often a person with skills to work out win/win solution to particular issue Puts someone in between warring parties and can dilute poisonous atmosphere to enable productive consideration of issues Not binding on parties unless reflected in a formal settlement agreement 11/23/2012 6 [email protected]

7. Expert Determination Sometimes resolution of a single issue at base of dispute can resolve dispute E.g. specification/qualities/existence of a substance or state of affairs, a legal/accounting/scientific opinion on a particular matter Parties nominate an expert or panel to give opinion on that single matter Can agree on “papers only” or independent tests, as appropriate. 11/23/2012 7 [email protected]

8. International Treaty obligations Specialist Dispute Resolution bodies and rules WTO WIPO-Domain name disputes-cyber squatting UNCITRAL Model Arbitration law 11/23/2012 8 [email protected]

9. WTO dispute settlement understanding (DSU) Came out of Uruguay Round Clearly defined rules and timetables Parties/countries first discuss. First WTO stage is good offices, conciliation. Then a panel and endorsed (or rejected) by WTO membership. Appeals on points of law are possible. 11/23/2012 9 [email protected]

10. DSU timetables 60 days Consultation, mediation 45 days Panel set up, appointments 6 mths Panel hears dispute and reports 3 wks Panel reports to WTO members 60 days Dispute Settlement Body adopts report (if no appeal) TOTAL 1 year 60-90 days Appeals report 30 days Dispute Settlement Body adopts appeals report. TOTAL 1.25 years 11/23/2012 10 [email protected]

11. How the panels work Each side presents case in writing to panel First hearing-complaining country and responding country present case Rebuttals-written and oral Experts, if appropriate Draft panel report given to both sides Interim report to both sides Review for two weeks Final report given to both sides and 3 weeks later to all WTO members 11/23/2012 11 [email protected]

12. Remedies? Obligation on parties to respect ruling Trade sanctions possible e.g . See www.wto.org and go to Case Studies Thailand : Conciliating a Dispute on Tuna Exports to the EC Dispute Settlement between Developing Countries-Argentina and Chilean Price Bands Pakistan’s Dispute Settlement with the US on Combed Cotton Yarn exports. 11/23/2012 12 [email protected]