Sunday, July 26, 2009

Introducing the concept of Arbitration.

A recent report by the Kaieteur News newspapers of Saturday, March 14, 2009 carried the caption “21,366 civil matters pending at Dec 2007”, and detailed the difficulties being experienced by the Judicial system in dealing with the amount of litigation before it. The report gives some account of the efforts at alternative dispute resolution in the field of mediation, as part of the effort by the Justice system to cope with its problems, along with the old idea of appointing part time judges. There is no mention or suggestion of using the age old, highly successful medium of arbitration to dispense with any number of civil matters, as a cost effective, timely alternative to litigation. It is perhaps one symptom of the lethargy of the system that this method is not in use except in Trade Union matters and is the purview of a few handpicked individuals. It is not intended at this time to expound on the use of arbitration locally, but to introduce readers to utility of arbitration internationally, and then in subsequent writings, to discuss the modern application of this medium to our legal problems in Guyana.

The use of Arbitration is applicable to civil matters only and in large part to the efficient disposal of disputes in the field of business, more so in the area of International Trade and commerce, since with the ever increasing amount of global trade and investment, ,businesses are more focused than ever before on the need to find a suitable means for resolving international commercial and investment disputes.

Historically, parties often resorted to national court systems and the party with the most bargaining power was able to insist on the application of its national law by its own national courts in the event of a dispute, thus placing the other party at a potentially significant disadvantage. Today, businesses are more sophisticated and often seek to find a neutral venue and means for resolving international commercial and investment disputes, such as international arbitration.

One of the main characteristics of international arbitration is the notion of party autonomy. This means that parties to an international commercial transaction can fashion the dispute resolution clause in their contractual agreement to provide for international arbitration in a way that meets their particular needs.

What is Arbitration?

Arbitration is a private dispute resolution process where parties agree in writing to submit their potential disputes to an arbitral tribunal, usually comprised of one or three arbitrators, instead of using a national court system. Such proceedings are typically more flexible and informal than court proceedings. The parties agree on the law that will apply and the location where the proceedings will occur, both of which are often chosen from a neutral jurisdiction, as well as the arbitral rules that will govern the proceedings, and even the language in which the proceedings will be conducted. The arbitration can be administered by well established international arbitral institutions like the International Chamber of Commerce (ICC), the International Centre for Dispute Resolution (ICDR), or the London Court of International Arbitration (LCIA), or can be conducted ad hoc according to procedures specified by the parties or established by an arbitral tribunal.

How does it work?

The arbitral tribunal hears witnesses and receives other evidence and legal arguments presented by the parties during hearings conducted in a private setting and renders a binding decision on the dispute. The tribunal renders its decision in the form of a written award which, if it complies with the New York Convention on the Recognition and Enforcement and of Foreign Arbitral Awards, can be executed and enforced in many countries throughout the world. This means that arbitral awards are typically far easier to enforce internationally than judgments obtained from national courts because there are very few international treaties concerning the enforcement of court judgments. As a result, a party seeking to enforce a court judgment in a foreign jurisdiction must often undergo a lengthy process which involves commencing new legal proceedings in the country where the judgment is sought to be enforced. Arbitral awards also have more finality than court judgments due to the limited ability to appeal such awards. In summary, international arbitration therefore provides a fair, efficient, and cost effective means of resolving disputes arising from international trade and investment.

Who is an arbitrator?

An arbitrator is a trained neutral third party, who is usually highly trained or skilled in a particular area, to whom a dispute is referred for settlement. The Arbitrator is bound by some formal rules and controls the proceedings much as a judge controls a court room. The arbitrator’s role is more flexible, and she or he may ask questions of witnesses, visit sites, and conduct the hearings in a more informal manner then a judge. The rules of evidence which apply in a normal trial are applicable in arbitration and she or he must hear submissions from lawyers as well. Sometimes the arbitrator may not conduct a hearing but may write an award based on the basis of submitted documents only, this is done where the parties elect to proceed in such a manner.

Contrary to some popular beliefs, arbitration does not mean that a judgment will be split half and half or equally among the parties, as the award will be made based on what the arbitrator adjudges to be fair , and very often where the arbitrator is legally trained, some legal principles will be applied in making an award.

It is of some significance therefore that Guyana’s laws include an Arbitration Act which allows for the appointment of arbitrators by the court, to deal with any matter or matters as it sees fit, and includes the provisions for international arbitrations. The implementation of an arbitral scheme could make a significant difference to the efficacy of Guyana’s legal system.

Thursday, July 23, 2009

Alternative Dispute Resolution-settling your disputes out of court

It is a well established practice in Guyana, that upon the slightest hint of discord people begin to think of visiting a lawyer with the ultimate aim of having their day in court ,which should supposedly provide a final settlement to the dispute. This is hardly strange since the Common Law history of our country and the rest of the English speaking Caribbean is based on the adversarial system ; being essentially a system in which two or more parties involved in a dispute will approach a court (or formal dispute resolution forum in which one or more judges sit to try the dispute).This system is heavily based on the presentation of evidence and the persuasiveness of the arguments presented, thus the winner of the dispute is most often determined by an expert combination of those factors. In example many persons would recall the late Johnny Cochrane, criminal attorney for O.J Simpson in the 1994 trial because of his persuasive rhetoric and elegant yet flamboyant manner of delivery, which undoubtedly provided the foundation for Simpson’s acquittal. For the vast majority who approach the courts for settlement of their disputes, the result is hardly as dramatic or rewarding as presented on television or in the movies, people have been known to faint or collapse in the Magistrate’s and High Courts from the sheer terror of having key personal matters decided on by a third party in accordance with precedent and a number of issues which they do not understand. Others have been known to take ill right after judgment has been delivered because they lost a case. It is hardly to be proposed that the system of law is draconian, unjust or irrelevant, it is simply a fact that it does not necessarily address as far as possible all the ancillary factors of the disputes which come before it. A Judge does not have the time to enquire of business partners in dispute whether they wish to remain in business together after a matter is concluded, nor is she in any position to advise the parties that some give and take is necessary, that forgiveness and reconciliation would serve far better for the longevity of a relationship than a judgment as to whose rights were infringed and what the compensation would be. At the end of a dispute one party wins, the other loses and they must deal with the consequences.
Alternative dispute resolution has emerged in recent times as one of the most effective ways of dealing with disputes which arise in the civil jurisdiction of the courts and even more significantly, outside the courts. It comprises the methods of arbitration, mediation, negotiation and conciliation, and for the construction and energy industries, adjudication. The most frequently used methods of alternative dispute resolution are arbitration and mediation. The selling point of these ADR methods is that the parties have control over the resolution process to a large extent and are allowed flexibility in how they wish to resolve the disputes, they are time saving, cost effective and user friendly. The parties are made to feel at ease and can explain their side of the matter, emotions and all.
Arbitration is used normally in the resolution of commercial matters, the arbitrator being a neutral party with specific expert knowledge in the law or industry. The Arbitrator is trained to deal with lawyers, presentation of evidence court room control and may ask pertinent questions, visit sites, call expert witnesses and generally engage such aid as is necessary for a fair and clear determination of a matter. Arbitration may be voluntary, as in the case of a contract signed by two parties in which they agree to resort to arbitration to resolve their disputes.
Mediation is more commonly used to aid in resolving a wide range of disputes, from family , marriage and divorce issues, to land , corporate and property disputes. In mediation, the mediator sits as a neutral and leads the parties through structured, guided, discussion to possible solutions to their problems. In this system it has been found that people more often than not want respect, gratitude, and sometimes an apology, rather than monetary compensation, or can be led to accept more of each other’s foibles while working out ways of living harmoniously. The neighbour who is deeply hurt by another’s remarks may be able to win compensation after a long and expensive trial under Defamation law, a step which the majority of ordinary citizens would be unable to take, and so in retaliation might throw foul smelling substances in the other’s yard, the police would be called in, followed by a visit to the magistrate’s court, and the saga continues. With a choice of mediation, one party would visit the mediator and outline the issues, the mediator would then take steps to invite the other party to a briefing and then at the agreed time both parties would go to the mediation room to discuss the matter. This method has proven to be extremely successful in resolving numerous community and family disputes, and is enjoying equal fame in other areas of life. ADR is fast recognised as being an effective and affordable way of resolving disputes worldwide and is annexed to the court systems of most developed countries, and quite commendably in Guyana as well. Many mediator’s can attest to the joy experienced by parties who speak with each other under controlled circumstances , for the first time in years at times ,and then go on to solve their problems themselves. It is the power of control over one’s affairs which gives the participants in a mediation the greatest satisfaction, apart from resolving the dispute, as against having a third party or judge do it for them. Importantly, mediation is cost effective and can be arranged a time to suit the participants in most circumstances.