Outside the Courtroom
As markets expand, incidents of infringement and business disputes have become increasingly common. Addressing these issues through traditional litigation is often costly, time-consuming, and may compromise confidentiality, especially for well-known businesses. Moreover, relying solely on the courts to resolve these disputes increases their workload, potentially reducing overall efficiency.
Alternative Dispute Resolution (ADR) offers a solution that benefits both sides (1) judicial efficiency by reducing court workload, while also (2) serving the interests of disputing parties by providing faster, cost-efficient, more flexible, and confidential methods to settle disputes.
It worth noting that in many jurisdictions, judges now require parties to participate in settlement chambers as a preliminary step before a case can proceed to trial, with the aim of encouraging amicable resolution without overloading the court system.
Considering the above introduction, challenges can be divided into private and public concerns:
Private concerns:
- Money: Litigation can be expensive, including expert’s fees.
- Time: Court cases can take months or years to resolve.
- Confidentiality: Sensitive business information may become public during court proceedings and final judgment is accessible.
Public concerns:
- Court workload: Increasing volumes of cases strain the judicial system.
- Efficiency: Delays in resolving disputes affect not only the parties involved but also the functioning of the legal system.
In response, ADR provides mechanisms that allow parties to resolve disputes more efficiently than traditional court proceedings, outside the courtroom.
While ADR includes several methods, this article focuses on two primary forms: Arbitration and Amicable Settlement.
Definition of Arbitration: –
Arbitration is a process whereby parties agree, through a contractual clause, to resolve any future disputes by referring them to a “neutral third party”, either a sole arbitrator or an arbitral panel.
Parties may also agree to resort to arbitration after a dispute has arisen through a separate agreement known as a “Submission Agreement”, which specifically identifies the subject matter of the dispute.
Why Arbitration?
Arbitration is often preferred when parties seek:
- A faster process compared to traditional court proceedings.
- Confidentiality, as arbitration hearings and awards are not accessible to the public, helping preserve business relationships and reputations.
- Flexibility, since arbitration is based on party agreement, allowing them to choose key elements such as the arbitration center, applicable law, seat of arbitration, and arbitrator(s).
- Finality, as arbitral awards are generally final and binding. Arbitration is a single-instance procedure; awards may only be challenged on procedural grounds, while the merits of the dispute are not subject to review.
Amicable Settlement
Definition of Amicable Settlement:
An amicable settlement is a peaceful and voluntary method of resolving a dispute in which both parties mutually agree to settle the matter without litigation but rather through negotiation, compromise, or mediation, aiming to save time and costs while preserving relationships as well.
The parties formalize the settlement by a written agreement to be legally binding.
Why?
An amicable settlement is often preferred because it is a cost- and time-efficient strategy and helps preserve relationships between the parties.
The best way to resolve any problem in the human world is for all sides to sit down and talk. Dalai Lama
K.I.S.S – Keep It Simple, Stupid
The KISS concept, which stands for “Keep It Simple, Stupid”, is widely adopted in drafting agreements. Its main purpose is to ensure that agreements remain straightforward and avoid the use of complex or lengthy terminology that could create issues during implementation or interpretation.
In line with this principle, it is highly advisable to remember the KISS concept when drafting any agreement—whether for arbitration or an amicable settlement. Keeping agreements simple enhances clarity, reduces misunderstandings, and facilitates smoother execution.
Complexity is the enemy of execution. Tony Robbins
In today’s fast-paced business environment, ADR has become an effective tool for resolving disputes, supporting both public and private interests. It has proven itself as a powerful mechanism that benefits all parties involved.
For businesses, ADR promotes cost and time efficiency while preserving commercial relationships and achieving satisfactory outcomes.
For the judiciary, it enhances efficiency by reducing workloads and allowing courts to focus on matters that truly require judicial intervention.
Thank you.
Written by our Junior Attorney: Ms. Mariam Khaled
