Commercial Dispute Resolution | Quizlet

Types of Dispute Resolution

Mediation

Arbitration

Litigation

Litigation

Settlement of dispute through the a state's judicial system

- Parties may choose which court to go to (Choice of Forum)

- Parties also choose the substantive law (Choice of law

The right to go to court (Article 6 ECHR)

Arbitration

the use of an arbitrator(s) to settle a dispute.

Main Characteristics of Arbitration

1. Consent - Issues decided only within the scope of the parties agreement

2. Non governmental decision makers - Arbitrators are independent and not tied to a government agenda. more open and interactive than judges

3. Award is final and binding - Awards from arbitration can generally not be appealed to a higher level court

Advantages of Arbitration

1. Confidential

2. High likelihood of obtaining international enforcement (through the NY Convention)

3. Neutrality of the forum

4. Autonomy: Parties can choose arbitrators, applicable law, procedural matters etc..

5. Possibly less expensive than litigation but subject to individual circumstances

Disadvantages of Arbitration

1. Less discovery - less of a chance to meet burden of proof

2. Lack of significant right of appeal

3. Arbitrators have no coercive power - Cannot penalize parties that do not comply

4. Lack of power to join relevant parties in cases of multiparty disputes

Institutional Arbitration

Proceedings administered by a specific arbitral institution (e.g. ICC Int. Chamber of Commerce)

Characteristics of Institutional Arbitration

1. Institutional rules are applied

2. Time effective and efficient

3. No need to deal with fees or payment for arbitrators

4. Greater credibility of award

Ad Hoc arbitration

Arbitration based on an agreement to arbitrate entered into after, and in response to, the dispute arising.

Characteristics of ad hoc arbitration

1. No administering institution

2. No fees paid to an institution

3. Tailor procedure to the particular kind of dispute - use of own rules or model rules for proceedings

ICC

International Chamber of Commerce, oversees arbitration awards.

AAA ICDR

American Arbitration Association's International Centre for Dispute Resolution.

LCIA

London Court of International Arbitration.

HKIAC

Hong Kong International Arbitration Centre.

SIAC

Singapore International Arbitration Centre.

Mediation

A method of settling disputes outside of court by using the services of a neutral third party, called a mediator. The mediator acts as a communicating agent between the parties and suggests ways in which the parties can resolve their dispute.

Principles of Litigation

1. Independence, Impartiality and Competence of Judges

3. Procedural Equality of Parties

5. Due Notice and Right to Be Heard

9. Structure of the Proceedings

16. Access to Information and Evidence

19. Oral and Written Presentations

21. Burden and Standard of Proof

22. Responsibility for Determinations of Fact and Law

Principle 1 of Litigation Undroit: Kleyn v Netherlands and Micallef v Malta

Article 6(1) - Impartiality of Judges

Kleyn v Netherlands (State Powers) and Micallef v Malta test (Between the Parties): Impartiality Test

- Objective Test: Tribunal must offer sufficient guarantees that excludes legitimate doubt of any bias of tribunal: Are there any ascertainable facts which raise a doubt to impartiality?

- Subjective Test: No personal bias or prejudice

Independence under Kleyn v Netherlands

There was no indication of subjective bias of the judges, and the manner and conditions of appointment of the council of states members showed no a sense of sufficient and adequate safeguards against extraneous pressure. In terms of objective impartiality, the council of states institutional structure had allowed certain of its ordinary councillors to exercise both advisory and judicial function

Impartiality under Micallef v Malta

denotes the absence of prejudice or bias and its existence or otherwise can be tested in various ways

Week 2 - Litigation in General

Principle 3 of Litigation Undroit: Procedural Equality of the Parties

The court should ensure equal treatment and reasonable opportunity for litigants to assert or defend their rights

Steel and Morris v UK - Facts

Facts: Steel and Morris were sued for libel by McDonald's for publishing an alleged defamatory leaflet. Steel and Morris represented themselves in a long trial against experienced senior barristers.

Held: At the time, in the UK, no legal aid in libel cases was available. ECtHR found a violation of article 6

Steel and Morris v UK - Requirements to consider for Article 6(1)

Legal Aid will be considered necessary based on:

1. The Importance of what is at stake for the applicant

2. Complexity of the relevant law and procedure

3. Applicant's Capacity to represent themselves effectively

Steel and Morris v UK - Judgement: Equality of Arms

Requires that there be a fair balance between the opportunities afforded the parties involved in litigation (for example, each party should be able to call witnesses and cross-examine the witnesses called by the other party)

Airey v Ireland - Facts

Availability of legal assistance

Irish woman married to an abusive husband. Asked for legal aid and was denied it- took it to ECtHR

BUT you have to work out the question what would happen without legal assistance- if she was denied it she would not be able to escape her marriage

Not appropriate to deny her

Not absolute right to free legal assistance but you do have a right to legal assistance- may well be that legal aid should be provided depending on the circumstances of the case

Airey v Ireland - Judgement

No absolute right to legal aid

BUT you have to work out the question what would happen without legal assistance- if she was denied it she would not be able to escape her marriage

Not appropriate to deny her

Not absolute right to free legal assistance but you do have a right to legal assistance- may well be that legal aid should be provided depending on the circumstances of the case

DEB v Germany - Facts

DEB applied for legal aid to bring an action against Germany under EU law but was denied by the German Regional Court

DEB v Germany - Judgement: Effective Judicial Protection

The principle of effective judicial protection, as enshrined in Article 47 of the Charter of Fundamental Rights of the European Union, must be interpreted as meaning legal persons can be entitled to legal aid

National laws that prohibit the grant of legal aid to legal persons are contrary to Article 47 of the Charter of Fundamental Rights

Principle 9 of Litigation Undroit: Structure and Form of Proceedings

A proceeding ordinarily should consist of three phases: the pleading phase, the interim phase, and the final phase

Pleading Phase

parties must present their claims, defenses, and other contentions in writing, and identify their principal evidence

Interim Phase

Court must take necessary measures to

- Hold conferences to organize proceedings

- Establish schedule

- Address matters appropriate for early attention

- Address procedural formalities

Final Phase

Evidence not already received by the court ordinarily should be presented here and parties can also make their final arguments

Principle 5 of Litigation Undroit: Due Notice and Right to be Heard

The right to be notified of proceedings AND present one's case and to respond to both other party and the court

Principle 5: Due Notice

- Formalities for the provision of notice to parties other than the plaintiff

- In civil systems the Court must provide notice

- In Common systems the plaintiff must provide notice

Principle 5: Right to be Heard

Court must consider all contentions of fact and law and address substantial issues

Principle 5 - Right to be Heard: Mantovanelli v France

Audite et alteram Partem (Listen to the other side) - Ability to fairly comment on evidence against a party

Principle 19 of Litigation Undroit: Oral and Written Presentations

Pleadings, formal requests (motions), and legal argument ordinarily should be presented initially in writing, but the parties should have the right to present oral argument on important substantive and procedural issues.

Week 3 - Litigation (Evidence)

Evidence in Litigation

Verdict is based on the facts which have been established through procedure

Types of Facts in Litigation

1. Common Knowledge

2. Judicial Notice

3. Facts pleaded by parties

Principle 22 Unidroit: Responsibility for Determinations of Fact and Law

The court is responsible for considering all relevant facts and evidence and for determining the correct legal basis for its decisions

Discovery Phase

Parties gather as much relevant information (documents, witness statements, etc.) as they can before deciding their strategy and presenting their case in court

Principle 21 Undroit: Burden and Standard of Proof

Each party has the burden to prove all the material facts that are the basis of that party's case.

Facts are considered proven when the court is reasonably convinced of their truth.

Allocation of the Burden of Proof

specified by law, ultimately reflecting a sense of fairness. The determination of this allocation is often a matter of substantive law

What consequences does a party invoke when having the burden of proof?

- The party must rely on and prove the facts that correspond to the applicable rule of law which is favourable to their interests

- Article 8 Swiss Civil Code: The burden of proof of proving the existence of an alleged fact shall rest on the party which derives rights from that fact

Questions to ask when allocating the burden of proof

- Who wants the legal consequence (from the substantive provision in question)?

- Which elements does the law require?

- What is contested?

Burden of Persuasion

You have to prove to the court that your contentions are right over that of the counter-party

Risk of non-persuasion

If you have the burden of proof, you run the risk of non-persuasion: the responsibility of a party to convince the decision-maker to see the facts in their favour and the price you pay for failing to convince the court.

Substantive (Objective) Burden of Proof => the risk of non persuasion

This relates to who loses if the facts are unclear (non liquet = Latin for “it is not clear”) - Who bears the risk if the court remains uncertain

Burden of the Plaintiff

Prove allegations forming factual background of the legal remedy/claim

Burden of the Defendant

Prove facts which construe his objections

Negating Defence

Completely contesting claimant's (plaintiff) factual statements

Affirmative Defence

Accepting statements of the plaintiff while raising other facts which negate liability (essentially justifications)

e.g. Force Majeure, Necessity, Duress etc..

Procedural (Subjective) Burden of Proof

obligation of a party to bring evidence forward to support their claims.

Standard of proof in a criminal case in Civil and Common Law

Beyond a reasonable doubt

Standard of Proof in a civil case in Civil Law

Beyond a reasonable doubt

Standard of Proof in a civil case in Common Law

Balance of Probabilities: More likely true than not

L'intime conviction du juge (civil law)

judge has to be convinced at an inner, deep-seated, personal level

Standard of Proof in International Commercial Arbitration

- 'beyond a reasonable doubt': Applied usually only to fraud, bribery or corruption

- 'Balance of probabilities': Applied to general commercial cases

Principle 16 Undroit: Means of Proof

1. Documents

2. Witnesses

3. Oaths

4. Inspection

5. Expert testimony

Principle 16.6: Free Evaluation

There must be free evaluation of the evidence by the judge. All types of evidence are allowed and the judge is not allowed to attach significance to any evidence based on its type or form

Documentary Evidence

Anything written or printed which is offered to prove or disprove facts .

Documentary Evidence in Common law

Hold interrogations, depositions, or requests to produce documents in other parties control

Documentary Evidence in Civil Law

The documents that must be produced are those on which each party intends to rely

Acquiring and Presenting Evidence

Acquired during discovery, and presented in different means

Notice Pleading (Common Law)

short and plain statement in the complaint of the claim that the plaintiff seeks to enforce and the relief that the plaintiff is requesting

Fact Pleading (Civil Law) - Adhered to by UNIDROIT Principles

Pleadings required to include all relevant facts in support of all claims asserted.

Difference of Fact Pleading to American Discovery Model

American Discovery Model calls for uncovering all of the facts before stating stances.

Voluntary Interviews (Principle 16.3)

Lawyers can ask potential witnesses- what do you know etc. to see if the witness is relevant or not

Testimony Procedures (Principle 16.4)

Proceeds as customary in the forum

Testimony Procedures in Civil Law

In civil law, the system for examining witnesses is called "inquisitorial," which means that most of the questioning is done by the judge or arbitrator.

Testimony in Common Law

Lawyers do most of the questioning by direct examination and cross-examination, followed by redirect examination, the system is referred to as "adversarial."

Admissibility of Party Testimony

In some legal systems the statements of a party are not admissible as evidence or are accorded diminished probative weight.

Who prepares Witness Statements?

Generally prepared by counsel resembling witnesses own words

Expert Witnesses (Principle 22.4 Unidroit)

The court may appoint or parties may agree on an expert to give evidence on any relevant issue for which expert testimony is appropriate, including foreign law

Hot tubbing

where some or all the evidence of experts from similar disciplines is given concurrently

Admissability

Discretion of court/tribunal to decide on the evidence allowed to be considered

Adverse Inferences (Principle 21.3 Unidroit)

When it appears that a party has possession or control of relevant evidence that it declines without justification to produce, the court may draw adverse inferences with respect to the issue for which the evidence is probative i.e. choosing the most likely explanation from the facts which have been provided

Effect of Adverse Inferences

Shifting of the Burden of Proof.

Where one party frustrates evidence, the court may shift the burden of proof to that party to ensure that all relevant evidence is provided

Week 4 - Mediation

Mediation

Non adjudicative method of settling disputes outside of court by using the services of a neutral third party, called a mediator. The mediator acts as a communicating agent between the parties and suggests ways in which the parties can resolve their dispute.

Characteristics of Mediation

1. Non-binding

2. Parties voluntarily participate

3. Intervention of third party (Mediator) to aid in the resolution of dispute

4. Confidential

5. Interest based as opposed to rights based

Advantages of Mediation

1. Self Empowerment and Control

2. Improvement of relationships

3. independence of parties: Parties feel more independent

Why can Mediation be better than Litigation?

1. Looks at grey lines as opposed to black and white

2. Concerned with individual motive rather than commercial consequences

3. Moral ambiguity

4. Choosing the Lesser Wrong: As opposed to the perfect right

Criteria for Considering Mediation (Feehily)

1. Transaction Costs: Influences parties ability to continue operations

2. Satisfaction: with the outcomes, are parties interests met by the outcome and are process and outcome perceived as fair?

3. Effect on relationship: particularly important when parties have ongoing business dealings

4. Recurrence: Is the outcome sustainable / does it risk further issues?

Mediation is Interest Based: The Harvard Theory of Negotiation

1. Separate the people from the problem

2. Focus on interests not positions

3. Invent options which benefit both parties

4. Use of objective criteria

Process of entering Mediation

1. Mediation Agreement (eexpression of voluntary deviation from the right of access to a court)

2. Process (sessions)

3. If mediation is successful then an agreement may be reached

4. Enforcement of settlement agreement

Hybrid Options of Dispute Resolution

- med-arb

- arb-med

Med-Arb

A type of dispute resolution process in which both parties agree to start out in mediation and, if unsuccessful, to move on to arbitration.

Arb-Med

An arbitration hearing is held first; the arbitrator's award is sealed. Then the parties mediate. If mediation fails, award is revealed

Benefit of Med-Arb

- parties have certainty that the dispute will be resolved

- efficiencies in terms of time and expense where the same person acts as both mediator and arbitrator.

Main concern of Med-Arb

- Diminished impartiality and neutrality of the third party who acts as mediator

- Greater likelihood of award being challenged

Benefit of Arb-Med

- the parties may be more focussed on settlement since they do not know the contents of the award

Main Concern of Arb-Med

- Parties may fail to make the mediation process seriously

- Waste of time in creating arbitration agreement which is not used if settlement agreement prevails

Transaction Costs in Mediation

- Satisfaction with outcomes

- Effect on relationshiprecurrence of dispute

- Time

- Costs of Mediator

Qualitative Rationale for Mediation

Mediation improves methods of human communication and legal problem solving and facilitates more tailored outcomes in acknowledgement of a different form of 'justice

Quantitative Rationale for Mediation

Mediation is used to reduce the work of the courts or to make dispute processing more efficient

Voluntariness in Mediation: ECJ Menini

Question: Should mandatory mediation take place before a consumer can initiate proceedings before court against a trader?

Court: Mandatory mediation is allowed if:

a. Does not result in binding decision on parties

b. Does not cause substantial delay

c. Does not suspend limitation period of claims

d. Does not give rise to high costs and allows still for interim measures

e. Can be withdrawn from at any time