HOW ADR CAN BE USED IN RESOLVING DISPUTE

Arbitration operates on the foundation of the parties' agreement, making the arbitration agreement a pivotal element as it serves as the entrance to the arbitration system. Before any disputes arise, parties typically engage in a formal agreement, often containing an arbitration clause. This clause permits them to establish key aspects of the arbitration process beforehand, such as the number of arbitrators, the chosen arbitration forum, applicable arbitration rules, and associated fees. Essentially, this agreement acts as a blueprint for the entire arbitration proceedings.

If there are unresolved issues or disputes that need clarification or judgment, the parties can bring them to a court for a decision before proceeding to the arbitration process.

Arbitration process is overseen and determined by an arbitral panel or a single arbitrator, depending on the agreement between the involved parties. Unlike in traditional legal proceedings, arbitrators are not required to be lawyers. Instead, parties have the flexibility to choose arbitrators from diverse fields they believe are better suited to resolve the dispute. This flexibility becomes particularly relevant when the arbitration involves highly specialized subjects like construction or pharmaceutical issues. For instance, parties might opt for an arbitrator with an engineering background to preside over a construction-related dispute.

To form a panel, parties can either mutually agree on a single arbitrator, or each side can appoint one arbitrator, with the two selected arbitrators then jointly choosing a third. Following the hearings, the panel or a designated arbitrator engages in deliberations and issues a written decision or arbitral award, which is legally binding. Notably, these opinions are not part of the public record.

The parties can combine the use of different Alternative Dispute Resolution (ADR) methods, this essentially means that they can incorporate a variety of dispute resolution approaches into their agreements. For example, they might specify in their contracts that if a dispute arises, they will initially attempt a friendly resolution through processes like conciliation or mediation. Only if these initial attempts fail would they then consider more formal methods of resolution, such as arbitration or turning to the traditional legal system provided by the state. This multi-step approach allows for a flexible and graduated response to disputes, prioritizing amicable solutions before resorting to more adversarial or formal proceedings.