HomeOpinion & AnalysisArbitration insights: Introduction to dispute resolution mechanisms

Arbitration insights: Introduction to dispute resolution mechanisms

BY JACOB MUTEVEDZI

Sometimes litigation is protracted and long drawn out. You wait for months, and sometimes years, for your case to be set down. Simple claims are bogged down by all kinds of technical trickery employed by your opponent’s lawyers to delay the finalisation of the matter. To make matters worse, things must be done in strict accordance with inflexible rules of procedure and evidence.

Litigation is the preferred method of resolving disputes in Zimbabwe. To the unrelenting litigious individual, who wishes to punish, drown and overwhelm his opponent with court attendances, it can be a powerful weapon. In my modest years of practice I have heard statements like “let’s keep them busy in the High Court”, “I want legal costs to break them” and “how can we keep it pending for as long as possible?”. Litigation can be used, or abused, to meet all these objectives.

It is not surprising, therefore, that court litigation has a scary reputation for being emotionally and financially draining. The applicable procedures are rigid, sophisticated and time consuming. Court matters can drag on for many months or even years. Preliminary points and interlocutory matters often take up a considerable portion of the court’s time. The complex and long-drawn out nature of litigation, unavoidably, results in high costs.

A broad variety of dispute resolution mechanisms that are short of, or alternative to, full-scale court processes have evolved to avoid the usual grief associated with litigation. Access to justice, therefore, goes beyond access to courts of law. There are a number of pathways to settle disputes without the scary formality, cost and complexity of litigation.

There exists an assortment of dispute resolution methods which your company can use. You can use one or a number of them together. Some are more effective than others depending on the circumstances. The various types of alternative dispute resolution mechanisms include negotiation, mediation, expert determination and arbitration. Alternative dispute resolution is so flexible that it can be employed to resolve almost any kind of contention; including disputes that cannot ordinarily be resolved by the courts. The various mechanisms are explored below.

Negotiation

When a dispute arises, parties usually negotiate as a matter of course. A provision for negotiation may or may not be drafted into an agreement. Negotiation is, arguably, the cheapest alternative dispute resolution method and the most commercially viable solution. However, it requires the absolute co-operation of the parties and plenty of objectivity to avoid negative emotions and inflexible views. By its very nature, it should not be the sole dispute resolution method relied upon since it may not result in a settlement.

Mediation

Mediation is a process where a neutral person called a “mediator” assists the parties to attempt to reach a mutually acceptable resolution of the dispute. The mediator’s role is not to decide the dispute but to assist the parties to communicate with a view to settling the dispute themselves. Control of the outcome is left to the parties.

To work properly, mediation requires parties to be adequately prepared for and committed to the process. A skilled mediator will also guarantee success. With these conditions present, mediation can flourish as an effective tool for resolving disputes. The process focuses on the real interests of the parties, not their contractual or legal entitlements. Mediation is not a legally binding process. It is a voluntary process, and mediators do not have the power to impose a binding outcome on the parties. It should therefore be seen as supplementary to and not as a replacement to a binding process, such as arbitration.

Expert determination

Expert determination is a procedure in which a technical, scientific or related dispute between the parties is taken before one or more experts who make a decision on the matter. The expert’s decision will only bind the parties if they agree to be so bound. Expert determination is suitable for matters which involve technical issues, for example, economic valuations or technical assessments in oil and gas disputes. Expert determination can be complementary to mediation and arbitration, and is particularly useful in sophisticated arbitration matters.

Arbitration

Arbitration is a dispute resolution system where parties agree to refer their dispute to an arbitrator or panel of arbitrators of their choice. The parties accept the tribunal’s decision as final and binding. It is suitable where parties want a final and definitive conclusion to their dispute. Further to standard arbitration, some arbitral institutions also offer expedited arbitration. For instance, the Court of Arbitration for Sport has been known to resolve Olympic disputes within 24 hours!

Arbitration is the most widely accepted and used dispute resolution mechanism in commercial disputes. It is a legally binding process which allows parties plenty of flexibility to determine how they want to resolve their dispute. Arbitration has numerous advantages which include, among others, allowing parties to choose their arbitrators, choosing the form and extent of their arbitral process, picking the venue and forum where the arbitration will take place. Further, arbitral awards are also recognizable and enforceable in foreign jurisdictions. Court judgments are not readily recognisable and enforceable abroad.

However, if not properly managed, adverse parties can make the process look a lot like litigation resulting in high costs and wasted time. Despite these potential shortcomings, offered a choice between local courts and arbitration, companies involved in international transactions should settle for arbitration.

Jacob Mutevedzi is a commercial lawyer and partner at Clairwood Chambers Attorneys and writes in his personal capacity. He can be contacted at +263775987784 or at jmutevedzi@gmail.com

Recent Posts

Stories you will enjoy

Recommended reading