Alternative Dispute Resolution - Term Paper Example

Alternative Dispute Resolution Introduction Traditionally, the use of the court system has been viewed as the main mechanism for dispute settlement in Egypt. In the recent past, there has been a severe increase in legal cases and the overload has made the judiciary inefficient as far as the modern business transactions are concerned (Tevendale & Hartzler, 2014, p. 1). In addition, the modern cases are more technical and, as a result, the court cannot speedup the litigation process as parties would require and provide justice in a timely manner. Alternative dispute resolution (ADR) is nonjudicial approach to settling legal matters among the disputing parties with or without the assistance of third parties. Many disputing parties prefer alternative dispute resolution because of flexibility, cost effectiveness, confidentiality, less confrontational and less time-consuming. The most common ADR includes mediation, arbitration, mini-trials, etc. Blake, 2014, p. 576). The challenge posed by the traditional disputes resolution mechanism and the desire for privacy by the parties has resulted in a significant increase in the use of ADR. Currently, the process has gained significant popularity in Egypt due to the enactment of the legislature in support of ADR in matters relating to civil and commercial matters. Arbitration as a General ADR Approach The hearing of disputes outside judicial control through ADR process involves an application of informal dispute resolution mechanisms that are subset s of negotiation skills (Goh 2007, p. 52). ADR involves resolving issues outside the official judicial system and informal mechanisms linked to the official judicial system. However, the ADR process is reinforced by other independent of free-standing approaches such as ombuds offices and mediation programs established within the organization to facilitate the dispute resolution process. It comprises both formal and informal tribunals and mediative processes. Use of arbitration as an ADR involves voluntary participation of the parties and a third party who acts as a private judge to execute a resolution. The parties agree that in case of any dispute they will settle them through arbitration process (Tevendale & Hartzler, 2014, p. 1). The use of arbitration is closely related to a litigation process in the sense that the arbitrators consider both sides of the issues presented by the parties before imposing a final and binding decision that is actionable by the courts. However, in order for the arbitration process to be applied there must be an "existing valid Arbitration Agreement between the parties prior to the disputes" Blake, 2014, p. 587). The parties have the opportunity to choose the arbitrators, and the disputes are settled in a less formal atmosphere. The implementation of arbitration involves use of neutral arbitrators who may direct the process. However, the disputing parties present the case to the arbitrators who the make the summary of the case before submitting them to formal judges. Unlike the formal litigation process, arbitration does not offer the disputants with an option for appeal in the case of discontentment (Fiadjoe, 2013, p. 146). The business partners sometimes include in the contract the procedure for selecting arbitrators and the entire arbitration process. Arbitrators should be selected from the individuals professing knowledge in specific and must be people with adequate knowledge of arbitration and the panel of arbitrators should be composed of individuals from different background such as lawyers and other individuals with respective expertise in related business (Cornell University Law, N.d). In the arbitration process, the disputing parties have the opportunity to choose the arbitrators before emergence of any dispute to ensure a friendly atmosphere during an arbitration process (Dlabay et al. 2008). Since the issues are resolved in secret by the arbitrators, the parties have the power to determine who is present during an arbitration process Library of Congress. (N.d.). This is unlike litigation process in which the end results are made public in court and records of the court proceedings maintained by the court for future understanding of the law. Arbitration enables parties to control the dispute resolution process. Sometimes the parties can make compromises for the sake of attaining resolution although this would not occur in case the parties chose to use the litigation process (Tevendale & Hartzler, 2014, p. 1). Other reasons for using arbitration as an ADR include faster settlement of disputes, creation of the friendly atmosphere, probability for reducing dispute resolution cost and the ability of the parties to control the outcome of the arbitration process. The agreement involves arbitration clause at the beginning of a relationship when parties are optimistic about the success of the contract and with little consideration of the disputes that may arise in the future. Due to poor attention paid by the parties there is a possibility for inadequacy in the arbitration clause that limits the dispute resolution process (Tevendale & Hartzler, 2014, p. 1). Furthermore, the parties may have included some requirements that turn out to be untenable because the specific arbitrator required cannot be found. In addition, the arbitration cost may be way too high from the predicted cost (Library of Congress, N.d.). The emergence of various issues during enforcement of the arbitration clause can prohibit the success of an arbitration process and compel the parties to seek judicial process of dispute resolution (Blake, 2014, p. 589). Arbitration as an alternative dispute resolution in Egypt Since the promulgation of Arbitration law No. 27 of 1994 in Egypt it established a framework for the arbitration process and since then process has gained significance as a mechanism for settling commercial and investment disputes (Tevendale & Hartzler, 2014, p. 1). The legislation provides guidelines for the formation and validating the arbitration process, formation of the arbitration tribunal, the arbitration procedure for legal disputes, and enforcement of an arbitral award. The arbitration process in Egypt is guided by the arbitration law, assessment of appropriate judicial decisions by the Supreme Constitutional Court and the court of Cassation as the secondary source of laws guiding the arbitration process (Chambers & Partners Pub, 2009). Furthermore, the 2011 revolution establishes procedure for settling commercial disputes related to international investors in order to promote international investment services in Egypt (Goh 2007). The international character of arbitration prescribes the brief synopsis of the appropriate international arbitration arrangement to which Egypt is party and the application of Egyptian judicial system in the dispute resolution mechanism (Schneider-White & Springer, 2014). The UNCITRL Model Law on International Commercial Arbitration sets the procedure to govern the arbitration procedure in Egypt (Schneider-White & Springer, 2014). The Egyptian law is in collaboration with international arbitration standards. The arbitration laws are applicable to arbitration proceedings conducted in Egypt or the international commercial arbitration taking place outside Egypt where the parties involved are subject to Egyptian legislation. The law determines the conditions parties must satisfy in order for the cases to qualify for arbitration. Also, it determines the procedure to be followed during an arbitration process. Finally, the law establishes the clause authorizing the arbitrators to make an absolute decision as an alternative dispute solution (Dlabay et al. 2008). The agreement for arbitration must be in writing and the document signed by the parties involved in order for it to be enforceable. The agreement must have been in existence before occurrence of a dispute, and it must be related to the case in which the arbitration is being invoked. Under article 11, matters that cannot be subjected to compromises cannot be arbitrated. Furthermore, matters relating to real estate are not subjected to arbitration according to ministerial decree No. 8310 of 2008 (UNESCO-IHP, 2013). Appointment of the arbitrators should be an odd number that is usually 3. The parties appoint each of the arbitrators while the other is appointed by the two initially appointed arbitrators (Tevendale & Hartzler, 2014, p. 1). However, if the parties are unable to appoint the arbitrators the court will be forced to intervene and appoint the arbitrators on behalf of the parties. The disqualification of an arbitrator is allowed in case of severe doubt about the arbitrator’s independence. The arbitration process begins after the claimant has petition the arbitrators in writing concerning the issues arising in the agreement. Once the arbitration procedure begins the arbitrators must conclude the process within the stipulated time (Whittington, 2008). In the case of unwarranted delays, the parties can request the competent court to terminate the arbitration process and have the case forwarded to the court. The arbitration award is final, and the case does not require further arbitration or court intervention. Once arbitrators have decided on the issue, there is no need for further litigation. However, in case either of the parties is not contented they can petition the court to declare the award null. In this case the disputes will have to be settled in court (Dlabay et al. 2008). Conclusion The arbitration process in Egypt is guided by the Egyptian Arbitration law. Also, it harmonizes international arbitration standards established in the UNCITRAL Model Rules of International Commercial Arbitration. The application of arbitration as an alternative dispute resolution aims at achieving faster, efficient and effective dispute settlement mechanism. It increases confidentiality and friendly atmosphere for dispute resolution. Parties have the chance to control the procedure for dispute resolution by deciding on the place and arbitrators to be used for settling the disputes. The cost of arbitration may be low or high depending on the nature of the case and how it is being settled. However, the arbitration process offers the parties with an opportunity to arrive at positive settlement of issues in the friendlier environment. Bibliography Blake, S., Browne, J. & Sime, S. (2014). A Practical Approach to Alternative Dispute Resolution. Oxford University Press, Aug 14, 2014 521- 656 pages Chambers & Partners Pub. (2009). Chambers UK: A Clients Guide to the UK Legal Profession Cornell University Law, (N.d). Alternative Dispute Resolution. SchoolSearch Cornell. Retrieved from http://www.law.cornell.edu/wex/alternative_dispute_resolution Dlabay, L., Burrow, J. & Kleindl, B. (2008). Intro to Business. Cengage Learning. Pp. 1- 624. Fiadjoe, A. (2013). Alternative Dispute Resolution: A Developing World Perspective. Routledge, pp. 1-234. Goh, G.M. (2007). Dispute Settlement in International Space Law. Martinus Nijhoff Publishers. Pp. 1-405. Library of Congress. (N.d.). Egypt: Legal Framework for Arbitration. Retrieved from http:// www.loc.gov/law/help/arbitration/egypt.php Schneider-White, W & Springer, J. (2014). Dispute Resolution Options: Negotiation, Mediation, Arbitration, and Litigation. LawForChange http://www.lawforchange.org/NewsBot.asp?MODE=VIEW&ID=6118 UNESCO-IHP. (2013). Alternative Dispute Resolution Approaches and Their Application in Water Management: A Focus on Negotiation, Mediation, and Consensus building. Retrieved from http://www.un.org/waterforlifedecade/water_cooperation_2013/pdf/adr_background_paper.pdf Tevendale, C. & Hartzler, J. (2014). Egypt Prevails on “Fork-in-the Road” Provision, Arbitration Notes. Herbert Smith Freehills LLP, Retrieved from http://hsfnotes.com/arbitration/2014/06/06/egypt-prevails-on-fork-in-the-road-provision Whittington, Kelemen, D., Caldeira, G. A. (2008). The Oxford Handbook of Law and Politics. Oxford Handbooks Online, pp. 1-815 Read More