The need for ADR in International disputes

We have different forums with the power to entertain disputes and give binding disposition to the dispute there under. The most dominant and binding one is that which derives its power from the supreme laws, i.e. constitution, of each nation to entertain disputes with in the nation’s jurisdictional limit. In addition, customary and alternative kinds of dispute resolution mechanism supplement the function of courts of law by entertaining disputes of different kinds in the domestic relations. The spheres of functioning of these devises are mostly limited to the disputes that arise in the national level.  If the dispute has some nature of international dispute, it is not to mean that these forums established in the national level do not have jurisdiction to entertain the case. The issue here is about the conflict of interest that might arise between the disputants as to forum and law, and the nations and also the enforceability of such out comes in the other nation. International treaties have tried to address these conflict of interest issues and make court decisions much smoother and enforceable in other nations.

Further, international tribunals have been established by the UN to serve as a forum for international disputes. Most nations of the world are making their diplomatic and commercial relations much smoother by the help of their institutes, i.e. UN. Though, there is unlimited number of critiques against the enforceability and reasonableness of decisions given by UN dispute settlement systems, huge number of international disputes are well addressed by it. The panel established under WTO is also the other most widely acceptable dispute settlement mechanism entertaining a wide range of international trade disputes raised among the member states.

What necessitated ADR in international disputes in the existence of all these different kings of mechanism function well in different kinds of disputes? Do you think that there are a lot more kinds (subject matters) of disputes not yet addressed by these mechanisms we have seen so far? Or is that because the enforcement of decisions or out comes of these mechanisms have got obstacles?

A. Extra – territorial relations of citizens – With the increasing concept of ‘Globalization’, the interaction of citizens with other person or entity who is not a citizen of him is not uncommon. To survive as a state and to have a civilized nation peacefully established on the willingness of the subjects, the government should encourage such kinds of commercial and social interactions. The state is bound by its commitment to give protection to its and its citizens’ interests. As long as there is relation, commercial or other, it is inevitable for a conflict to arise from that relation. It will be wise to look for effective means of dispute settlement for such kind of dispute where the outcome will get recognition from all parties and which secure the enforceability of it as well. At this time ADR can be thought as a best alternative.

B. Limitations of the domestic courts - As it has been explained earlier the jurisdiction of domestic courts is limited to the matters related with the citizens’ interest and sometimes in the interests of public. Stated differently, state courts might have not jurisdiction to matters arised in international disputes for some times the other party is not clearly under the jurisdiction of the court so that enforcement of such kinds of court decisions will be obstacles. That means citizens might not get the opportunity to get the decision enforced and thereby exercise their rights. Especially, when one of the parties is not an Ethiopian and/or if he doesn’t have any property under Ethiopian jurisdiction, the decision given against him will not be easily enforced unless there is reciprocity in between the nations. The other thing is when there is a conflict of interest between the nations where the two disputants belong to. This happens where, for instance, both of the nation claims to have primary jurisdiction over the matter, when there is no reciprocity agreement to the enforceability of decisions given in one state to the other one. The parties, in such instances, prefer alternative meanses of getting justice by taking their grievances to ADR based on the sole consent of the disputants.

International Arbitration by J.S. Verma (taken from a book entitled, Alternative Dispute Resolution, Univ. Law Publishing. P. 13)

I. Need for International Arbitration,

The growth of international trades bound to give rise to international disputes which transcend national frontiers and geographical boundaries. For the resolution of such disputes the preference to international arbitration vis-à-vis litigation in national courts is natural because of arbitration being preferred to litigation in courts and the foreign element being preferred in the international arbitration to the domestic elements in the national courts. This is also because there is no international court to deal with international commercial disputes. “In situations of this kind, recourse to international arbitration in a convenient and neutral forum is generally seen as more acceptable the recourse to the courts as a way of solving any dispute which can’t be settled by negotiation.” (Alan Redforn and Martin Hunter, Law and Practice of International Commercial Arbitration, 2^nd ed. P. 26.)

The rationale and purpose of international arbitration should be to provide a convenient, neutral, fair, expeditious and efficacious forum for resolving disputes relating to international commerce.

Basic features which are uniform in the legal framework for resolution of international commercial disputes “can be broken down in to three stages; (i) jurisdiction, (ii) choice of law, and (iii) the recognition and enforcement of judgements and awards.” (Jonathan Hill, in the Law Relating to International Commercial Disputes, para. 1.1.3).

The trend towards growing judicial intervention which tends to interfere with arbitral autonomy as also finality is a significant factor to be kept in view. The need is to reconcile and harmonise arbitral autonomy and finality with judicial review of the arbitral process. National law differ on this issue. UNCITRAL Mode Law attempts to promote harmony and uniformity in this sphere. The aim is to ensure arbitral autonomy coupled with neutrality or impartiality in the arbitral process by the composition of the arbitral tribunal by competent and impartial members with ensures equality between the parties and full opportunity to them to present their case. Total exclusion of judicial intervention does not match with the current trend but the scope of judicial supervision needs to be reduced to the minimum. The source of authority of the international arbitral tribunal is the agreement of the parties and not the mandate of the State. The choice of the law applicable is also determined by the provision in the arbitral agreement. With the increased arbitral autonomy the requirement of reasons for the award is greater. Apart from transparency in the arbitral process, it also acts as an inherent check on the arbitrators and discloses to the party the basis of the award and the logical process by which the conclusion was reached by the arbitrators. The presence of the reason also regulates the scope of judicial supervision.

Informality of the arbitral process permits relaxation from strict rules of evidence and it reduces costs and delay which are often unavoidable in litigation. However, observance of basic principles of natural justice cannot be dispensed with.

Appropriate provisions for enforcement of award are essential to impart efficacy to international arbitration.

C. To promote of Access to Justice – It is not only on the national level that peoples will be denied of the right to have access to courts, but some times it happens in the international relations as well. For instance, it happens when none of the domestic courts of the disputants assume jurisdiction over the matter. In other words, some times the national courts where the disputants belong to me may not have the jurisdiction to entertain the case according to their own national laws. In such instances, the parties will not get access to any of the courts and the only alternative for them will be to look for ADR based on their free consent.

“Following its exponential development in US, the ADR movement was exported to many parts of the world. National courts in Europe, stymied by the volume of transborder litigation, have been attracted to ADR. Members of the European Union see ADR as a way to facilitate access to justice, a fundamental right contained inn Article 6 of the European Convention for the protection of Human rights and Fundamental Freedoms. Growing interest in ADR in the European Union has also resulted in a Green Paper proposing greater use of alternative process in civil and commercial matters, and efforts are currently underway to develop a European Code of Conduct on mediation.” (International Conflict Resolution; Consensual ADR Process, American Case Book Series, Thomson west Pub, 2005, p. 18)

D. Development of e-commerce – Most of the time we think of three parties involved in ADR, the two disputants what ever there number may be and the third neutral intermediator. But these days, it becomes common to see ADR as a square or rectangle instead of a triangle. The fourth party, the new presence in the table, is the technology that works with the mediator or arbitrator. Interest in this fourth party has been fuelled by the emerging cyber market place, a market place of transactions taking place over the internet, known as e-commerce. These buyers and sellers need access to cost effective and efficient means to resolving disputes that arise from these online transactions. These buyers and sellers need a dispute resolution process that is inexpensive- one in which the costs are much lower than the purchase price of the commodity. Going to court or convening mediation are not viable resolution methods for these modest transactions.

“The development of e-commerce also increased the need for ADR. Given the difficulties of processing e-commerce disputes in a global e-market place, on-line dispute resolution has become an attractive alternative, particularly in small disputes. When ADR processes, such as mediation and arbitration, occur in the on-line environment, it is often referred as online dispute resolution (ODR).

In the context of civil disputes ADR processes, such as negotiation and mediation, introduced a civilized way to resolve international conflicts. They were designed to overcome the limitations and failures of domestic judicial processes and the lack of a binding international public process.” (International Conflict Resolution; Consensual ADR Process, American Case Book Series, Thomson west Pub, 2005, P. 19-20)

E. Influence of the UN Charter – The traditional dispute settlement procedures available under international law are enumerated in Article 33 of the UN Charter;

1. The parties to any dispute, the continuance of which is likely to endanger the maintenance of international peace and security, shall, first of all, seek a solution by negotiation, enquiry, mediation, conciliation, arbitration, judicial settlement, resort to regional agencies or arrangements, or other peace full means of their own choice.

2.  The Security Council shall, when it deems necessary, call up on the parties to settle the dispute by such meas.

Negotiation is generally acknowledged as the most fundamental of these processes. The most common process for international dispute settlement, however, are the diplomatic or the consensual methods – mediation and good offices, enquiry, and conciliation. The consultation process, although not mentioned in Article 33 of the UN Charter, is a species of negotiation that should be considered as part of the traditional package of processes for the resolution of international disputes. Together with pre-negotiation activities, such as public peace processes, coalition-building, dialogue groups, and co-existence practices, theses processes offer a panoply of choices for dispute and conflict resolution practitioners. (p. 20)

This provision of the UN Charter and the general trend in the world towards ADR as a means of settling dispute makes the disputants to put trust and confidence on the procedure. The recognition of ADR in the charter as a first option before resorting to the International Court of Justice (ICJ), a court established under the umbrella of the UN by its charter, dictates the easy enforceability and the quality of ADR outcomes. It is also considered as a preliminary proceeding before going to ICJ.

F. The Limitation of International Courts – Internationally well functioning tribunals like the International Court of Justice (ICJ) and Criminal Court of Justice (CCJ) of the UN and the Dispute Settlement Body of the WTO have lots of limitation. The first one is the identity of the parties that have the right to institute a case or defend their case before these tribunals. It is only sovereign sates and some times international organizations that can be a party before the ICJ. By the same taken, the WTO tribunal accepts claims only from member states. In terms of the subject matters which can be seen by these tribunals, all; cases can’t be entertained before them. Most of the time ICJ entertains disputes “concerning issues related to frontiers and maritime boundaries, territorial sovereignty, the non-use of forces, non-interference in the internal affairs of States, diplomatic relations, hostage-taking, the right of asylum, nationality, guardianship, rights of passage, and economic rights.” (International Conflict Resolution; Consensual ADR Process, American Case Book Series, Thomson west Pub, 2005, p. 42). In the other hand, CCJ has jurisdiction to adjudicate only the gravest offences affecting the international community: genocide, crime against humanity and war crimes. The WTO tribunal entertains disputes in the implementation of any of its documents, like the GATT.

Though, these tribunals try to cover most of the possible disputes in terms of subject matters, the right of the international community to take its cases before them is not fully guaranteed. Thus, we have a lot more parties who do not have a right before any of these tribunals, like individuals, NGOs, companies etc. By the taken, we have some more subject matters of disputes which can’t be entertained in any of these tribunals, like ownership of property, tort claims etc. ADR tries to fill these gaps or matters which are not well addressed by these well known tribunals of the world.