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Alternative Dispute Resolution “Conflict into Opportunity”

Conflict may also be a positive experience
Atty. Ever Rose Higuit
I. CONFLICT 1. It can help us see things from diverse perspectives.
A. What is conflict? 2. Lead to innovative and creative solutions
3. Challenges us to improve ourselves and our relationships with
Conflict refers to the friction between incompatible parties and their others.
differences (Black’s) 4. Can lead to growth and learning.
“Conflict is actual or perceived opposition of needs, values, and interests
B. How do we manage conflict?
A conflict can be internal (within oneself) or external (group or
organization dynamics) Conflict Management

Conflict can refer to wars, revolutions or other struggles, which may The practice of recognizing and dealing with disputes in a rational,
involve the use of force as in the term ‘armed conflict’.” balanced and effective way; a theoretical concept focusing on the
limitation, mitigation, and/or containment of a conflict without necessarily
(Higuit Powerpoint, 2016)
solving it.
Sources of Conflict (Id.)
a. Objectives
1. Difference in attitudes, opinions, views, and perceptions 1. Provides skills to resolve conflict for growth and learning
2. Misunderstanding and/or disagreement about needs, goals, 2. Assist individuals in preventing, or resolving conflict before it
priorities, and interests escalates and becomes unhealthy.
*Misunderstanding v. Diasgreement 3. Each party to the transaction plays an important role in
managing conflict.
Mis – Misappreciation of facts which does not necessarily lead to
disagreement or conflict; “Difference in perception of facts; Resolution If conflicts arises, each party should be involved in evaluating selection
of perception” (Higuit, 2016) appropriate options for resolving the issues.

Dis – Parties are aware of the factual settings but they cannot arrive at b. Benefits
unanimity or consensus; “Parties know the facts; different perceptions” 1. Greater job satisfaction
(Id.) 2. A more productive workplace.
3. Personality 3. Early resolution of disputes with no resort to legal process.
4. Scarcity of resources 4. Greater privacy and confidentiality.
5. Poor communication 5. Cost-effectiveness
6. Poor organizational structure 6. Preservation and improvement of relationships
7. Lack of teamwork 7. Greater control over outcomes and, thus, higher satisfaction
8. Lack of clarity of rules and responsibilities with solutions.
8. Greater opportunity for win-win resolution
Nature of Conflict
Conflict Management v. Conflict Resolution
1. Dispute of Right – Judicial
Conflict management refers to measures that limit, mitigate and/or
Where people or groups are entitled by law, by contract, by previous contain a conflict without necessary solving it
agreement or by established practice to certain rights.
Conflict resolution refers to the resolution of the underlying
Disputes of right will focus on conflict issues such as employment incompatibilities in a conflict and mutual acceptance of each party’s
contracts, legally enforceable matters or unilateral changes in accepted existence.
or customary practices.
It can either aim at resolving or terminating conflicts in an open and
A dispute of rights is, therefore, usually settled by legal decision or predictable process in accordance with legal principles.
arbitration and not by negotiation.
It focuses on the efforts to increase cooperation among the parties to a
2. Dispute of Interest (opinion) – ADR conflict and deepen their relationship by addressing the conditions that
Where the conflict may be a matter of opinion, such as where a person led to the dispute, fostering positive attitudes and allaying distrust
or group is entitled to some resources or privileges (such as access to through reconciliation initiatives, and building or strengthening the
property, better working conditions, etc.). institutions and processes through which the parties interact
Because there is no established law or right, a dispute of interest will Ways and strategies to manage conflict
usually be solved through collective bargaining or negotiation. 1. Avoidance –
Effects of Conflict The avoidance strategy seeks to put off conflict indefinitely by ignoring
If conflicts are not resolved early and effectively, they can easily escalate the resolution of the problem; the avoider hopes the problem resolves
and result in: itself without confrontation
1. Low productivity Someone who uses avoidance has the ability to side step problems,
2. Low morale leave issues unresolved, and allow others to take ownership.
3. Stress If an issue is unimportant avoidance may be the correct strategy.
4. Other negative outcomes However, if you continually avoid conflicts it is like a simmering pot that
(See “Life Cycle of Conflict”, Higuit PPT) will eventually boil over.
A person who avoids conflict has a low concern for herself and for
others. In the two-dimensional space they are uncooperative and
unassertive.
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2. Accommodation – 2. Consensual – specific dispute resolution chosen by parties

It entails giving the opposing side what it wants; often occurs when one with their consent; voluntary
Example: negotiation, conciliation, & mediation
of the parties wishes to keep the peace or perceives the issue as minor.
Features of ADR
Accommodation is useful when you want to create goodwill or show
reasonableness. 1. Consent
2. Parties have more freedom/leeway over the conduct over the
If it is overused it can result in restricted influence, loss of contribution,
overlooked ideas and anarchy. If it is underused it can result in low procedure (venue, period of resolution, third parties)
morale and lack of rapport among colleagues. 3. It does not require exhaustion of administrative/legal remedies
4. System and/or method of ADR is not limited (take note of
The skills of an accommodator are selflessness, obedience and an method limits)
ability to yield.
Note: ADR is all about compromise and collaboration
3. Competition –
Competition operates as a “zero sum game”; good in emergencies or III. COMMON TYPES OF DISPUTE SETTLEMENT
other instances when quick decisions need to be made.
1. Negotiation – a discussion between the parties themselves
Competitors use rank, position and influence and state their positions, of their respective claims and counterclaims with a view to
opinions and feelings clearly. their just and orderly adjustment
When competition is overused, the environment is characterized by a 2. Inquiry – an investigation of the points in question, on the
lack of feedback, low empowerment and reduced learning. If theory that their elucidation will contribute to the solution of the
competition is underused, indecision or delayed action could have a problem
crippling effect on an organization 3. Good Offices – method by which a third party attempts to
bring the disputing parties together in order that they may be
The competitor is easy to recognize. Winning is the name of their game
able to discuss issues in contention
and they are only concerned about their own needs.
4. Mediation – a mediator (third party) actively participates in the
They are at the top of the assertiveness scale and low on the discussions in order to reconcile conflicting interests and
cooperativeness scale. appease their feelings of resentment
4. Compromise – 5. Conciliation – a conciliator (third party) attempts to settle the
dispute through recommendations (non-binding); the services
A compromising strategy typically calls for both sides of a conflict to give of conciliator not volunteered but solicited by parties
up elements of their position in order to establish an acceptable if not 6. Arbitration – process by which the solution of a dispute is
agreeable solution; needs are only partially met (e.g. negotiation) entrusted to an impartial tribunal, usually created by the
A compromiser demonstrates skills of moderation and negotiation. parties themselves under a compromis
a. Compromis – provides for the composition of the body
An overuse of compromise means a loss of the big picture perspective
and its rules of proceedings, delineates issues to be
and lack of trust.
decided and specifies laws to be applied
If it is underused there may be frequent power struggles and b. Award in arbitration is, by previous agreement, binding
unnecessary confrontations. on the parties
The compromiser is seeking ways to make a deal and meet halfway. *refer to Cruz (2005): International Law Reviewer for definitions
5. Collaboration –
Collaboration works by integrating ideas set out by multiple people. The IV. INTERNATIONAL DISPUTE RESOLUTIONS
object is to find a creative solution acceptable to everyone A. International Law
Sometimes referred to as the ideal alternative, collaboration is high on International law is that branch of public law which regulates relations of
the assertiveness and cooperativeness axis. states and of other entities which have been granted an international
A collaborator demonstrates reasonableness and an ability to listen, personality; “law of nations”
understand and empathize. 1. Overview of I/L
Lack of commitment, low empowerment and loss of innovation can take 1.1. Sources of I/L
place when there is insufficient collaboration. Primary sources Subsidiary sources
(1) International treaties and (1) Decisions of courts
On the other hand, when collaboration is overused there may be too conventions (2) Teachings of publicists
much time spent on trivial matters and extra work created as a (2) International customs
result. Collaboration takes time and energy to correctly execute (3) General principles of
international law
1.2. Functions of I/L
II. ALTERNATIVE DISPUTE RESOLUTION: OVERVIEW
(1) To promote international peace and security
Alternative Dispute Resolution (ADR) (2) To foster friendly relations among nations; and to discourage
ADR is a process of settling a dispute between 2 or more parties in an use of force in solution of differences;
amicable/ peaceful settlement; alternative to war or retaliation (3) To provide orderly regulation in conduct of mutual dealings
of states
Methods of ADR
(4) To insure international cooperation
1. Adjudicative – a neutral person is involved (a judge defines
the outcome); consent of the parties with regard to the neutral
is necessary; legal process
Example: litigation & arbitration

1.3. General Principles of I/L
These are rules which, because of intrinsic merit, have been
accepted and are being observed by the majority of civilized states.
1.4. Basic Principles of International Law/ Rights
and Privileges of a State
1.4.1. Existence / Self-Defense
It is described as the most comprehensive right of the state. In the
exercise of this inherent right, the state may take such measures,
including the use of force, as may be necessary to counteract any
danger to its existence. (Cruz, 2005:49)
1.4.2. Independence
Independence is the right of national self-government, the freedom
of a state from control by another state, or the right of a state to
direct both its internal and external affairs without dictation or
interference from others (Cruz, 2005:54)
1.4.3. Sovereignty (Internal/External)
Sovereignty refers to the supreme and uncontrollable power
inherent in the state by which such states is governed. (Id.)
In – freedom of state to manage its domestic affairs
Ex – freedom of the state to direct its foreign affairs i.e.
independence
1.4.4. Jurisdiction (Personal/Territorial)
Jurisdiction is the authority exercised by a state over persons and
things within or outside its territory, subject to certain exceptions.
(Cruz, 2005:72)
Pe – refers to the power exercisable by a state over its nationals.
The duty of obedience and allegiance follows the individual even
when he is outside the territory of the state.
Ter – refers to the authority of the state, based on sovereignty and
right of domain, which it exercises over persons and property within
its boundaries
1.4.5. Legation (Passive/Active
It is the right of a state to maintain diplomatic relations with other
states. It involves the right to send (active) and the right to receive
(passive) diplomatic representatives. The right of legation is purely
consensual. (Cruz, 2005:81)
1.4.6. Equality
1.5. Municipal Law v. International Law
2. Article 33 (1) of the UN Charter:
Pacific Settlement of Disputes
“The parties to any dispute, the continuance of which, is likely to
endanger the maintenance of international peace and security,
shall first of all, seek a solution by negotiation, inquiry, mediation,
conciliation, arbitration, judicial settlement, resort to regional
agencies or arrangements, or other peaceful means of their own
choice.”
*Judicial Settlement – a process by which a pre-existing and
permanent tribunal aims to settle a dispute between parties;
compulsory jurisdiction; application of laws is independent of will of
the parties
*Resort to regional a/a – an organization or agency which deals
with matters relating to international peace and security “makes
every effort at the pacific settlement of local disputes” involving
states comprised in a particular region or area (e.g. ASEAN).
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3. The International Court of Justice
The ICJ is the judicial organ of the UN and which superseded by
the Permanent Court of International Justice under the League of
Nations; also known as the World Court. (Cruz, 2005:123)
a. Parties before the Court
“Only states may be parties before the court” (Statute, Art. 34)
b. Basis of jurisdiction
Consent of the parties involved (Id. Art. 36)
c. “Optional Jurisdiction Clause”
Parties may at any time declare that they recognize as compulsory
ipso facto and without special agreement, in relation to other states
accepting the same obligation, the jurisdiction of the Court (see Id,
Art. 36)
d. Matters before the Court
“The jurisdiction of the Court comprises all cases which the parties
refer to it and all matters provided for in the UN Charter or in treaties
and conventions.”
“The state parties to the present Statute may at any time recognize
x x x the jurisdiction of the Court in all legal disputes concerning:
Interpretation of a treaty;
Any question of international law
The existence of any fact which, if established, would constitute a
breach of an international obligation
The nature or extent of the reparation to be made for the breach of
an international obligation” (Id, Art. 36)
e. Enforcement of decisions
Failure to perform obligations incumbent upon a party under a
judgment rendered by the court, the other party may have recourse
to the Security Council which would provide recommendations or
decide measures to give effect on the judgment (UN Charter, Art.
94)
f. Application of stare decisis
“Stare decisis does not apply because Article 59 of the Statute
provides that decisions of the Court shall be binding only between
parties an in respect of their particular case.
Nevertheless, decisions of international and even of national
tribunals may have a strong persuasive influence in the resolution
of international litigations.” (Cruz, 2005:3)
B. Alternative Dispute Settlement Institutions
1. Permanent Court of Arbitration
(Hague Convention of 1907) –
“International arbitration has for its object the settlement of disputes
between States by Judges of their own choice and on the basis of
respect for law. Recourse to arbitration implies an engagement to
submit in good faith to the Award.” (Art. 37)
“In questions of a legal nature, and especially in the interpretation
or application of International Conventions, arbitration is
recognized by the Contracting Powers as the most effective, and,
at the same time, the most equitable means of settling disputes
which diplomacy has failed to settle. Consequently, it would be
desirable that, in disputes about the above-mentioned questions,
the Contracting Powers should, if the case arose, have recourse to
arbitration, in so far as circumstances permit.” (Art. 38)
“The Arbitration Convention is concluded for questions already
existing or for questions which may arise eventually. It may
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embrace any dispute or only disputes of a certain category.” (Art.
39)
“Independently of general or private Treaties expressly stipulating
recourse to arbitration as obligatory on the Contracting Powers, the
said Powers reserve to themselves the right of concluding new
Agreements, general or particular, with a view to extending
compulsory arbitration to all cases which they may consider it
possible to submit to it.” (Art. 40)
Purpose of the Convention – applicable to state to state disputes;
to ensure states use best efforts in the pacific settlement of
disputes. (Higuit, 2016)
*Can a person invoke the HC 1907 in the settlement of a dispute?
No. An individual does not have international personality (subject
to exceptions). (Id)
1.1. Application
“The Permanent Court is competent for all arbitration cases, unless
the parties agree to institute a special Tribunal” (Art. 42);
“accessible at all times, and operating, unless otherwise stipulated
by the parties, in accordance with the rules of procedure inserted
in the present Convention.” (Art. 41)
“The Permanent Court is competent to settle the 'compromis', if the
parties are agreed to have recourse to it for the purpose. It is
similarly competent, even if the request is only made by one of the
parties, when all attempts to reach an understanding through the
diplomatic channel have failed.” (Art. 53)
1.2. Arbitration Procedure
beformed and the extent of thhe powers of the Commissioners.”
(Id, Art. 10)
Art. 45 & Art. 57 (Applicable to PCA and ICI)
3 Arbitrators
Arbitrator #1 (P) Arbitrator #2 (P) Umpire #3 (N/TP)
The Parties choose one Arbitrator each. The, third Arbitrator, the “umpire”
is chosen by both parties; or entrusted to a third party.
Article 63 (Arbitration Procedure)
“As a general rule, arbitration procedures comprises of two distinct
phases:
a. Pleadings – communication by the respective agents to the
members of the Tribunal and the opposite parts of cases,
counter-cases, and if necessary, of replies
b. Oral Discussions – discussions consists in the oral
development before the Tribunal of the arguments of the
parties.
“The agents and counsel of the parties are authorized to present
orally to the Tribunal all the arguments they may consider
expedient in defense of their cases.” (Art. 70)
“They are entitled to raise objections and points. The decisions of
the Tribunal on these points are final and cannot form the subject
of any subsequent discussion.” (Art. 71)
“The Tribunal considers its decisions in private and the proceedings
remain secret. All questions are decided by a majority of the
members of the Tribunal.” (Art. 78)

“Compromis” – agreement in which the subject of the dispute is Article 84 (Award)

clearly defined; the time allowed for appointing Arbitrators, the
“The Award is not binding except on the parties in dispute.”
form, order, and time in which the communication (Art. 63) must be
made. The compromis also defines the manner of appointing of
Arbitrators, any special powers, where it shall meet, the language 3. International Court of Arbitration
to be used, x x x. (Art. 52) (International Chamber of Commerce)
Good Offices v. Mediation (See: Higuit Discussion on ICC, 2016)
Mediation Good Offices
Submission Submission to a TP Submission to a TP
Use Active participation of Attempts to bring 4. UN Commission on International Trade Law
TP in discussion to disputing parties together (1985 UNCITRAL Model Law on International Commercial
reconcile (give advice) in order to discuss issues Arbitration) –
in contention
Relationship Relationship still in tact No longer in speaking “The Model Law is designed to meet concerns relating to the
of Parties terms current state of national laws on arbitration. It covers all stages of
Third Party Important that the TP the arbitral process from the arbitration agreement to the
(TP) has influence recognition and enforcement of the arbitral award and reflects a
Exercise of It should be seen as a means of providing service worldwide consensus on the principles and important issues of
Right and not an “unfriendly act” towards a party international arbitration practice.”
*Good offices apply in serious disputes that would likely to “The model law is not a law. It is only a guideline.” (Higuit, 2016)
endanger peace.
“It seeks to harmonize domestic laws of arbitration with
international commercial arbitration practice.” (Exp. Note 1-4)
2. International Commission of Inquiry (ICI) 3.1. Application
“In disputes of an international nature x x x arising from a difference The Law “applies to international commercial arbitration, submitted
of opinion on points of facts, Contracting Powers deem it expedient to any agreement in force between this State and any other State
and desirable that the parties who have not been able to come to or States.
an agreement by means of diplomacy should institute an
The provisions of this Law applies only if the place of arbitration is
International Commission of Inquiry…” (HC 1907, Art. 9)
in the territory of this state.”
2.1. Function and Scope
3.2. Arbitration “Agreement”
“x x x to facilitate a solution of these disputes by elucidating the
“An ‘arbitration agreement’ is an agreement by the parties to submit
facts by means of an impartial and conscientious investigation.”
to arbitration all or certain disputes which have arisen or which may
“ICI are constituted by special agreement between the parties in arise between them in respect of a defined legal relationship,
disputes. The Inquiry Convention defines the facts to be examined; whether contractual or not. An arbitration agreement may be in the
it determines the mode and time in which the Commission is to

form of an arbitration clause in a contract or in the form of a
separate agreement.” (Art. 7(1))
“The agreement shall be in writing. An agreement is in writing if it
is contained in an document signed by the parties or in an
exchange of letters which provide a record of the agreement…”
(Art. 7(2))
3.3. The Arbitral Tribunal
Art. 10. Number of Arbitrators.
(a) The parties are free to determine the number of arbitrators
(b) Failing such determination, the number of arbitrators shall be
three.
Chapter IV. Jurisdiction of the Arbitral Tribunal.
“The tribunal may rule on its own jurisdiction, including any
objections with respect to the existence or validity of the arbitration
agreement.” (Art. 16, UNCITRAL/ML)
“Unless otherwise agreed by the parties, the arbitral tribunal may,
at the request of a party, order any part to take such interim
measure of protection as the arbitral tribunal may consider
necessary measures in respect of the subject-matter of the dispute.
The arbitral tribunal may require any party to provide appropriate
security in connection with such measures.”
Principle of Kompetenz-Kompetenz – a court or tribunal has
competence to rule as to the extent of its own jurisdiction.
3.3.1. Conduct of Proceedings
“The parties shall be treated with equality and each party shall be
given a full opportunity of presenting his case.” (Art. 18)
“Subject to the provisions of this Law, the parties are free to agree
on the procedure to be followed by the arbitral tribunal in
conducting the proceedings.” (Art. 19)
3.4. Recognition of Awards
“An arbitral award, irrespective of the country in which it was made,
shall be recognized as bindings and, upon application in writing to
the competent court, shall be enforce subject to the provisions of
this article and article 36.” (Art. 35)
3.4.1. Grounds for refusing recognition
At the request of the party against whom it is invoked, if that party
furnishes to the competent court:
(1) Proof of incapacity of other party;
(2) No notice of appointment of arbitrator;
(3) Award deals with dispute not contemplated within terms of those
submitted for arbitration.
(4) Composition of tribunal not in accordance with agreement
(5) Award has not yet become binding on the parties;
(6) Court finds that:
(i) Subject of dispute not capable of settlement by arbitration
(ii) Recognition of award would be contrary to public policy of
the State
3.5. Termination of Proceedings
“The arbitral tribunal proceedings are terminated by the final award
or by an order of the arbitral tribunal.
“The arbitral tribunal shall issue on an order for the termination of
the arbitral proceedings when:
(a) The claimant withdraws the claim, unless respondent objects
thereto and the arbitral tribunal recognizes a legitimate
interest on his part on his part in obtaining a final settlement
of the dispute
(b) Parties agree to the termination of the proceedings
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(c) The arbitral tribunal finds that the continuation of proceedings
has for any other reason become unnecessary impossible.
(Art. 32, Id.)
5. Convention on the Recognition and Enforcement of
Foreign Arbitral Awards (1958 New York Convention) –
The convention seeks to provide common legislative standards for
the recognition of arbitration agreements and court recognition and
enforcement of foreign and non-domestic arbitral awards.
Its principal aim is that that foreign and non-domestic arbitral
awards will not be discriminated against and it obliges Parties to
ensure such awards are recognized and generally capable of
enforcement in their jurisdiction in the same way as domestic
awards. (UNCITRAL)
4.1. Application
“The convention shall apply to the recognition and enforcement of
arbitral awards made in the territory of a State other than the State
where the recognition and enforcement of awards are sought, and
arising out of differences between persons, whether physical or
legal;
It shall also apply to arbitral awards not considered as domestic
awards in the State where their recognition and enforcement are
sought.” (Art. I (1))
4.2. Arbitration
“Each Contracting State shall recognize an agreement in writing
under which the parties undertake to submit to arbitration all or any
differences which have arisen or which may arise between them in
respect of a defined legal relationship, whether contractual or not,
concerning a subject matter capable of settlement by arbitration.”
(Art. II (1))
4.3. Recognition of Awards
“Each Contracting State shall recognize arbitral awards as binding
and enforce them in accordance with the rules of procedure of the
territory where the award is relied upon, under the conditions laid
down in the following articles.” (Art. IV (1))
4.3.1. Requirements for recognition
The party applying recognition shall supply:
(a) Duly authenticated award or a duly certified copy thereof;
(b) Original agreement referred to in Art. II or a duly certified copy
thereof;
4.3.2. Refusal to recognize
Recognition and enforcement may be refused, at the request of a
party whom it is invoked, only if the party furnishes to a competent
authority proof that:
(a) Agreement is not valid under the laws subjected to it; under
the law of the country where the award was made;
(b) The contending party was not given notice of appointment of
arbitrator; or unable to present his case;
(c) The award deals with a difference not contemplated within the
terms submitted for arbitration;
(d) Composition of arbitral tribunal is not in accordance with the
agreement of the parties;
(e) Award has not yet become binding; set aside by competent
authority (Art. VI(1))
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4.4. Other provisions

“The provisions of the Convention shall not affect the validity of
multilateral or bilateral agreements concerning the recognition and
enforcement of arbitral awards entered into by the Contracting
parties x x x.” (Art. VII)
* Rule 39, Rules of Court: Effects of Foreign Judgments
The effect of a judgment or final order of a tribunal of a foreign country,
having jurisdiction to render the judgment or final order is as follows:
Upon a specific thing Against a person
Conclusive upon the title of the Presumptive evidence of a right
thing as between parties
The judgment or final order can be repelled by evidence of:
1. Want of jurisdiction
2. Want of notice to the party
3. Collusion
4. Fraud
5. Clear mistake of law or fact
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C. Settlement of International Business Disputes Non-jurisidictional Process: ADR

This part summarizes Chapters 1-8 of “Arbitration and Alternative 2.3. Conciliation – aims to bring parties together before a third
Dispute Resolution: How to settle international business disputes”
person whom they have chosen for the purpose of settling
1. Types of International Business Disputes & Their Remedies
their dispute (ad hoc or institutional); conciliator attempts to
Refer to Arbitration and ADR (ITC/ALF, 2001:7-25) set out the best perspectives from which to conciliate the
Type Remedy
different points of view; transform contentions to conciliations
Contract on sale of Incoterms – provides a set of international 2.4. Mediation – variation of conciliation; a mediator (TP) attempts
goods (including rules for the interpretation of the most to settle the dispute by examination of the claims of the parties
commodities commonly used terms in international trade;
and assists the parties in their negotiations to settle their
compiled by the ICC
Distributorship, Experts help establish the quality of goods, or dispute
agency, and the number of sales made by the agent; parties *Mediator v. Conciliator
intermediary may resort to other methods of dispute Generally, a conciliator gives advice, either orally or in writing,
contracts resolution
Construction, FIDIC – International Federation of Contracting while the mediator persuades parties in order to find an amicable
engineering and Engineers; provides standard forms of contracts solution to their dispute.
infrastructure for use between employees and contractors in 2.5. Mini-trial – amicable; simulated procedure; entered into by
contracts international construction projects
disputing parties in order to resume normal commercial
Intellectual property WIPO – World Intellectual Property
contracts Organization; administers IP dispute resolution relations; parties’ counsel exchange their memoranda and
mechanisms; argue their case before the top executive representatives of
Registration of UDRP – Uniform Domain-Name Dispute- both parties. The parties’ representatives start negotiations in
domain names Resolution Policy; dispute resolutions arising
from cybersquatting may be submitted for order to settle the matter.
administrative dispute resolution proceedings 2.6. Dispute Review Board/Dispute Adjudication Board
Joint venture An international panel of arbitrators with (DRB/DAB) – members are appointed by the parties in the
agreements experience in the field are well-suited to deal
with such questions.
same way as an arbitral tribunal; difference: the panel is
Maritime contracts Bills of lading are transport contracts which appointed at the very beginning of the project and for its whole
incorporate maritime arbitration clauses duration (flexible or formal)
Dealings with a Agreement on PSI by the WTO – balances the 2.7. Partnering – doing business that emphasizes the importance
preshipment concerns of exporters in developing countries
inspection agency and interests of the developing countries that of trust, teamwork and cooperation among various parties
consider the PSI useful involved in a contract; means of avoiding disputes
Dealings with WCO – World Customs Organization; 2.8. Technical Expertise – parties deem it more efficient to
customs authorities Harmonized System (HS) for classification of
particular articles
present technical issues (industrial, hi-tech) to experts in the
WTO Agreement on Customs Valuation – field; decision to call upon an expert depend on the parties.
lays down the basic rules of dutiable values of *DOCDEX (Documentary Credit Dispute Expertise) –
customs articles
straightforward system to resolve documentary credit disputes;
Documentary credit Experts (or panel) may provide either a binding
arrangements or non-binding opinion for the settlement of aimed mainly at enabling banks to resolve differences between
documentary credit disputes themselves.
Employment
Contracts
Where a State or
State-owned entity 3. Types of Arbitration
is involved
a. Institutional arbitration means that the parties choose to
conduct their arbitration procedure in accordance with the
2. Resolving Commercial Disputes and Differences rules of and with the assistance of an arbitral institution. To
a. Jurisdictional – refers to State court litigation and arbitration obtain assistance of the institution, the parties will have to
b. Non-jurisdictional – simply refers to alternative dispute have agreed to it explicitly, usually in the wording of the
resolution arbitration clause in their contract or on a separate agreement
*Assistance rendered by arbitral institutions
Jurisdictional Processes 1. Setting in motion the arbitration
2.1. Recourse to State courts – states courts are called upon to 2. Fixing and supervising time limits
hear the case and make a judgment on the merits; grants 3. Deciding on challenges and replacements of arbitrators
provisional and conservatory measures, and other preliminary 4. Scrutinizing and notifying award
steps before the commencement of the proceedings *Examples of Arbitration Institutions:
2.2. International Commercial Arbitration – arbitration is a 1. International Court of Arbitration – ICC
private method of settling disputes, based on the parties’ 2. International Centre for Settlement of Investment
agreement; General rule: “no agreement to arbitrate, no Disputes
arbitration.” 3. China International Economic and Trade Arbitration
Ad Hoc Arbitration – parties are responsible for setting up, on Commission
their own, the arbitral tribunal and stipulate rules that will govern its b. Ad Hoc Arbitration means that the arbitration is not
proceedings conducted pursuant to the rules of an arbitration institution;
Institutional Arbitration – parties call upon an arbitration parties may stipulate their own rules of procedure; “do it
institution (e.g. ICC) to administer the proceedings in accordance yourself arbitration”; difficulties concerning the arbitration will
with the institution’s arbitration rules; two types: partly/fully be resolved in accordance with the national law of the place
administered of arbitration.
 A D S A L V A D O R R e v i e w e r - A D R |8

4. The Arbitral Tribunal 6. Applicable Law

4.1. Powers and Limitations of the AT
The powers of the AT are those conferred by the parties in
order to fulfill its task; granted explicitly in the arbitration
agreement; or implicitly through reference to institutional rules
(e.g. UNCITRAL Arb. Rules)
In general: power to fix place of arbitration, determine language of
the proceedings, fix time limits for the procedure, organize hearings
and site visits
Conservatory measures: The AT can order “interim measures” of
protection before issuing an award, either to avoid loss or damage
of subject of arbitration, or provide for measures of enforcement of
the award.
4.2. Duties of the AT
The duties of the AT may flow from the parties’ agreement,
from the applicable law, or from the applicable rules of
arbitration; essential duty: to render a decision that will
dispose of the parties’ dispute
1. Due process
2. Terms of reference
3. Reasoned award
4. Notification of award
4.3. Jurisdiction of the AT
Where parties have agreed to submit their dispute to
arbitration, they confer jurisdiction on the AT to determine the
dispute; State courts will not have jurisdiction unless the
arbitration agreement is void
Kompetenz-Kompetenz – the arbitral tribunal will have the power
to decide on its own jurisdiction (if a party should contest the
tribunal’s jurisdiction)
An arbitration agreement contained in a contract which is null and
void does not declare the non-existence of the arbitration
agreement; autonomous and severable from the contract itself; the
jurisdiction of the AT is upheld.
5. Arbitration Proceedings
General Principle: Party Autonomy
In arbitration proceedings, parties can avail themselves of the freedom
to tailor the proceedings in accordance with their wishes and needs,
within the limits of relevant applicable laws; take into account the
desiderata of the parties.
Procedural regulations decided by the AT:
Failure to come into an agreement, the AT, duly considering the
desiderata of the parties, will decide on the ff. matters:
1. Language
2. Timing
3. Hearings and evidence
4. Appointment of experts (optional)
6.1. Law applicable to the substance – refers to the substantive
which governs the contract; Absence of a stipulation may
complicate disputes and may sometimes lead to a new dispute
arising from what law is applicable
Once the parties have agreed upon the law applicable to the
contract, the AT is bound thereby. However, the AT may find the
applicable law limited by the intervention of public policy of the legal
system to which the contract is related
Lex mercatoria – general principles of law
Lex loci delicti – law of the place where the loss or damage occurred
Amiable compositeur – mediator in a dispute between subjects of
international law; AT authorized, when applying a specific law, to
derogate from a strict application of the law if it considers that such strict
application would lead to an unjust result, or to decide ex aequo et bono
(on the basis of equity).
6.2. Law applicable to the arbitration agreement (lex fori) –
refers to the law of the arbitration agreement separate from the
contract; parties can choose the substantive law that would govern
the arbitration agreement
Separability Doctrine - an arbitration clause and the underlying
contract are generally considered separable contracts; different laws
may apply to the contract and the agreement to arbitrate.
Issues relative to the arbitration agreement
1. Validity of a/a
2. Arbitrability
3. Capacity
4. Form
6.3. Law applicable to the arbitration procedure – procedural
laws agreed upon by the parties to govern the proceedings;
directives for the conduct of the arbitration proceedings, e.g.
constitution of AT, removal of arbitrators; further provides for rules
on the recognition and enforcement of the award.
*By agreeing to submit their dispute to the rules of an arbitration
institution, the parties agree to follow essentially the rules of that
institution = waiver of the arbitration laws of the place of arbitration
Lex arbitri – law of the seat of arbitration; refers to mandatory provisions
imposed by each country on arbitrators in their own territory
Parties are also free to choose by virtue of their choice of arbitral seat,
a source of procedural laws affecting the rights and remedies available
to parties; limitation:
7. Award
c. Rendering
d. Recognition
e. Enforcement