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Multi-tiered resolution clauses: use them all if you can't choose one
Rigolet, Alexandre; Kohl, Benoît
2019In Kohl, Benoît (Ed.) Liber Amicorum Cepani 1969-2019
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Keywords :
mutli-tiered resolution clauses; alternative dispute resolution; arbitration
Abstract :
[en] 1. The shortcomings of conventional dispute resolution methods (i.e. litigation and arbitration ) under the adversarial system are well known. These are usually lengthy and (generally) expensive, so they are considered at odds with the desire for certainty and efficiency harboured by economic actors . In response to the dissatisfaction associated with traditional dispute resolution methods, practitioners have been exploring alternative ways, for quite some time already, to solve disputes. Over the past decades, these efforts have led to the development of a spectacular array of alternative dispute resolution methods (“ADR” methods) that parties can choose from in attempting to solve their disputes, with litigation or arbitration being viewed only as last resort . 2. It has even become quite common for parties to have an ADR clause in their agreement stipulating that parties should attempt to settle any dispute between them by using a predefined ADR method. However, resorting to ADR methods requires consensus from all parties to do so and that they act in good faith. This is often arduous after a dispute has arisen, but contractual clauses can make it possible to circumvent this obstacle. Choosing the appropriate ADR method is a complex exercise, especially before any specific dispute has arisen. Experience tells us indeed that, on the one hand, not all kinds of disputes can be solved through one single ADR method, even if they are disputes arising from the same contract. In addition, parties are reluctant to attempt using a second ADR method after having used a first method that did not create the desired outcome. This generally leads to the dispute being referred to arbitration or litigation, albeit that another ADR attempt would have revealed itself unsuccessful. On the other hand, being obliged to immediately and systematically resort to burdensome mechanisms to resolve disputes, even relatively straightforward ones, can also prove inefficient and time consuming. To address these issues, legal practitioners have developed new, more elaborate types of ADR clauses and mechanisms that compel parties to undertake several ADR methods (negotiation, mediation, advisory board, etc.) consecutively prior to commencing litigation or arbitration. It is only if no agreement has been reached between them after all the various mechanisms foreseen have been exhausted that the parties would be allowed to bring the case to court or to refer it to arbitration. These types of clauses are commonly referred to as multi-tiered dispute resolution mechanisms or clauses or as “multi-step”, “escalation,” and, more poetically, “waterfall” or cascading clauses . 3. These types of clauses have become common especially in important construction contracts. They raise important issues regarding the parties’ choice of the appropriate dispute resolution mechanism or mechanisms and regarding the enforceability and workability of the mechanisms chosen. These clauses and the issues they raise are the subject matters we are focusing on in this article.
Disciplines :
Judicial law
Author, co-author :
Rigolet, Alexandre ;  Université de Liège - ULiège > Département de droit > Responsabilité et contrats
Kohl, Benoît ;  Université de Liège - ULiège > Département de droit > Responsabilité et contrats
Language :
English
Title :
Multi-tiered resolution clauses: use them all if you can't choose one
Alternative titles :
[fr] Les clauses de résolution des litiges en cascade: utilisez en plusieurs si vous ne pouvez choisir
Publication date :
2019
Main work title :
Liber Amicorum Cepani 1969-2019
Main work alternative title :
[fr] Liber Amicorum Cepani 1969-2019
Publishing director :
Kohl, Benoît ;  Université de Liège - ULiège > Cité
Publisher :
Kluwer, Malines, Belgium
Pages :
427-444
Peer reviewed :
Peer reviewed
Available on ORBi :
since 21 February 2020

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