How ADR fit in the global village

Our world is getting smaller, our disputes are becoming larger and yet not confined by national borders. Global trade international transactions compel us to expand our horizons.

Alternative dispute resolutions (ADR) have increased recently. Global economic integration has been fuelled by technological advancement. This has increased the importance of transnational dispute resolution including agreed regimes in bilateral investment treaties. In general, the benefits of arbitration are often considered to be lower costs, greater efficiency and speed, and the ability to choose expert adjudicators to resolve specialised disputes. International arbitration proceedings are governed by different legal rules and systems, whereas domestic arbitration is embedded in national legal order.

ADR is an industry in itself. My recent visit in various countries recently for cases has shown a paradigm shift of arbitration on a global aspect and an important economic factor.

Thinking about international arbitration, it is merely concerned about the legal security. Both international trade and investment are the fundamentals for the future prosperity of most countries. It would be obvious that most countries try to provide incentives to foreign countries to invest capital and know-how, and one of the most important incentives for foreign investors is that they need legal security and protection for investments transactions. Investors are ready to invest in countries if they have dispute settlement system available, which is fully independent. We need not forget that for an international economic development, be it Mauritius or other countries, an efficient system of dispute settlement is absolutely mandatory and necessary with a global mindset perspective and trustworthy for foreign investors.

Even though, there are some drawbacks and challenges handing with ADR. Couple of months back in USA, I had key discussion with pillars of arbitration committees and people. I had noted that arbitration procedures have become too long and complex at times. The reason is more than commercial arbitration, legislatives, court decisions, etc. When I start a new arbitration, I am amazed by how much time counsel from both sides request for submission of their memorials and possibly a procedure for document disclosure. Effective case management should become very important.

Second drawback is that arbitration is costly. Although earlier I mentioned that arbitration is less costly. Yes what I meant earlier is that arbitration was a consideration to lower cost and that it brings more efficiency. But on the other side, the procedure is often more costly. Lawyers with support staff on both sides, together with expenses and costs of witnesses and experts, court reporters and interpreters have to be paid. If counsel is expected to do the best for the client, it is not easy for counsel to eliminate certain options for cost reasons. It may vary depending on the arbitration rules the parties have selected, the arbitrators’ fees and the amount of dispute.

Third factor is transparency, which is critical. Although confidentiality is of major importance, parties do demand for load of transparency. This is agreed at the very beginning prior to the case starting. Nowadays, many awards are being reported by the media and the hearings are open in the public in Washington. If they are open to the public, it will tend to be less focused on the professional exchange within the tribunal and become more a public statement.

Last but not the least, most cases have financial implications. There should be a second instance for appeal which might bring more predictability and consistency of the jurisprudence. It is hard at times to see how a permanent tribunal could be composed of even better judges.

I believe we are in a learning process which never ends. Things keep changing incrementally, simultaneously and synchronically. Concerning case management, parties involved should have a thorough know-how of management structure with specific tools like time, project, quality and ethic management that help to reduce the cost of arbitration. We should embrace ADR with a broader and global mindset in order to keep pace with the going trend as we are living in a global village with different traditions, cultures and habits leading to one.