Alternative Dispute Resolution Issues - Essay Example

Memorandum March 25, International Business Law I wanted to quickly discuss some issues concerning Alternative Dispute Resolution (ADR). I intend also to highlight issues concerning World Economic Forum and World Trade Organization (WTO). Alternative Dispute Resolution (ADR) ADR is any method that can be used in resolving disputes other than through a legal action. Public courts are normally ordered to review the validity of the methods used in ADR. However, the public courts rarely overturn the ADR decisions and awards especially in situations where the disputing parties formed a legal contract. The two major forms of ADR are arbitration and mediation (August, Don and Michael, pg245). Generally, ADR can also be referred to as a means through which disputes can be settled outside the courtroom. ADR typically consist of early neutral evaluation, cooperation, reconciliation, mediation, and negotiation. Because of court queues, time delays and elevating costs of litigation continue to affect litigants; many states have decided to experiment with ADR programs. Some of these programs are mandatory while others are voluntary. Despite arbitration and mediation being the major forms of ADR, negotiation is in most cases attempted first so as to resolve dispute. This is because it is the best mode of resolving a dispute. Negotiation creates a forum whereby the parties involved can meet so that they can settle a dispute. The main benefit of negotiation is that the parties involved have the opportunity to control the negotiation process and come up with solutions themselves. Another informal alternative to litigation is mediation. Mediators are those individuals who have been trained carry out negotiations. They bring together the opposing parties by trying to figure out the kind of agreement or settlement, which both parties can accept. Mediation can be applied in a wide variety of case-types ranging from federal government negotiations to minor juvenile felonies. It is also a significant method in solving of disputes that arise between shareholders and their stock brokers. Arbitration, on the other hand is a simplified version of a trial that involves limited discovery and rules of evidence. Arbitration is normally headed and decided by an arbitral committee. To comprise a committee, both sides can either agree on a single arbitrator, or each side can select one arbitrator after which the two arbitrators can elect the third arbitrator. During arbitration process, the committee only meets for a few hours and this may last for probably a week. After this, the committee then deliberates and issues an arbitral award, or a written decision. The agreement made during arbitration is enforceable under both state and federal law. World Economic Forum The World Economic Forum is a global institution that has the responsibility of ensuring that the state of the world is improved through private-public cooperation in the spirit of international citizenship. The World Economic Forum has recently had some ‘hot topics’ with regards to the public international trade law. For instance, the issue concerning the European debt crisis has been of interest in the World Economic Forum. European Debt Crisis This has proved to be one of the worst nightmares for Europe over the past few years. This crisis was as a result of excessive private borrowing and government extravagance. Greece, for instance, experienced a lot of problems simply because the tax collected by its government was less than what its government spent. However, in Ireland and Spain the bust followed a private-sector binge; the mortgage debt. Also Portugal and yet again Spain faced the debt crisis because of corporate borrowing. The euro zone, an organization for European countries that have adopted the Euro, has however made minimal progress in trying to reduce the private debt burden. Fortunately, the mortgage write-downs and faster growth that have resulted from America’s households has managed to reduce about two-thirds of the excess debt created during the boom years. Several euro-zone countries have managed to achieve far less private-sector deleverage for three reasons. First, the financial austerity obligated on Europe’s peripheral economies intensified their collapses, which has made it much harder to lessen private debts. Second, banks have been unwilling to recognize, and hence end up making provisions for loans that are non-performing. And third, the European bankruptcy law compared to American bankruptcy law is less debtor-friendly. Therefore, the European bankruptcy law is less favorable to restructuring debt. For instance, in America most mortgages are non-recourse, to mean a borrower has the right to hand back the keys and leave. While in Europe, one will typically remain accountable for an unpaid mortgage debt and corporate-bankruptcy procedures are normally slow and costly, for instance, the process may take an average of seven years in a country like Italy. Moreover, Portugal, Spain and Italy experience one of the worst corporate-debt problems. For example, the IMF asserts that 50%, 40% and 30% of debt, respectively, is owed by organizations that do not have the capability of covering their interest disbursements out of the pre-tax earnings (August, Don and Michael, pg67). These organizations are incapable of investing or growing. Inland on the other hand experiences a heavy household-debt burden. Payment of mortgage in Europe impact heavily on household finances and crimps the spending of consumers. While in America the income share held by an average household has been the lowest for decades. World Trade Organization (WTO) The agreements made by World Trade Organization are extensive and complex since they are legal texts that cover a wide range of activities. WTO deals in government purchases, industrial standards and product safety, intellectual property, agriculture, telecommunications, textiles and clothing, banking, and food sanitation regulations. One of the main focuses of WTO is to ensure trade without discrimination. This brings about two principles. Trade without Discrimination According to the WTO agreements, countries are not allowed to discriminate their trading partners. If a country happens to grant ones of its partners a special favor, then it must do the same for all the other WTO member states. This principle is called Most Favored Nation (MFN) Treatment. The principle however has some exceptions allowed. For instance, member nations are allowed to set up a free trade agreement, which only applies to goods traded within the member nations. In other words, they can discriminate against goods from non-member nations. They also have the opportunity of giving developing countries special access to their markets. The second principle known as National Treatment, simply states that both locally produced and imported goods ought to be treated equally. The same applies to foreign and domestic services (August, Don and Michael, pg69). These principles are very important because if they are not in existence, many trading partnerships may not last long since there could be high chances that some partners may end up not adhering to the agreement made. This will most probably have a negative impact on trade. Work Cited August Ray, Don Mayer, and Michael B. Bixby. International Business Law: Text, Cases, and Readings. Upper Saddle River, NJ: Pearson Education, 2009. Print. Read More