1. International Dispute
Resolution
 Litigation
 Differs within countries
 Complication of evidence, witnesses and documents
 Judicial system may be different from country to country
 Some courts more influenced by political pressures
 Not enforceable outside of country
 Treaties/Conventions may assist potential parties
 Contract clauses assist courts in enforcement of claims
 Usually need “minimum contacts” for jurisdiction
 International Court of Justice (ICJ)
 Only nations have standing - not individuals
 Nations may make claims on behalf of persons
 No mandatory compliance requirement
 UN Security Council must enforce
 Arbitration: 3rd neutral party decides outcome, which is binding
 Mediation: 3rd neutral party “suggests” outcome, which is not binding
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2. Resolution of International
commercial/business disputes
 Disputes:
Valuable things at risk, such as:
 Time
 Money for expenses incurred trying to resolve
dispute, lost earnings
 Business relationship and future earnings
 Loss of market to competition
 Loss of reputation
 Freedom if a criminal offence and dispute is with
authorities/society.
 Political issues between states and countries
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3. Methods of dispute resolution
 Prevent the dispute by risk management
 Avoid some disputes by drafting contracts well
 Negotiation
 Mediation and conciliation
 Expert determination
 Arbitration
 Litigation/Adjudication
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4. Legal role in Risk Management
 Objective is to avoid dispute or minimise
damage resulting from a dispute
 Must understand business
 Conduct due diligence to ascertain main areas
where dispute/legal liability likely to arise
 Appreciate bargaining position and
opportunities/limitations
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5. Negotiation
 Win/win mentality means both parties must
come out of the negotiation with an
improvement in their situation. Skill lies in
formulating such an outcome.
 Win/loss means that one side is better off and
one worse off. May resolve immediate dispute,
but might lead to loss of relationship, or
retaliation later.
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6. Mediation
 Parties appoint a person who assists them to
reach a negotiated resolution.
 Often a person with skills to work out win/win
solution to particular issue
 Puts someone in between warring parties and
can dilute poisonous atmosphere to enable
productive consideration of issues
 Not binding on parties unless reflected in a
formal settlement agreement
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7. Expert Determination
 Sometimes resolution of a single issue at base
of dispute can resolve dispute
 E.g. specification/qualities/existence of a
substance or state of affairs, a
legal/accounting/scientific opinion on a
particular matter
 Parties nominate an expert or panel to give
opinion on that single matter
 Can agree on “papers only” or independent
tests, as appropriate.
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8. International Treaty obligations
 Specialist Dispute Resolution bodies and rules
 WTO
 WIPO-Domain name disputes-cyber
 squatting
 UNCITRAL Model Arbitration law
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9. WTO dispute settlement
understanding (DSU)
 Came out of Uruguay Round
 Clearly defined rules and timetables
 Parties/countries first discuss.
 First WTO stage is good offices, conciliation.
 Then a panel and endorsed (or rejected) by
WTO membership.
 Appeals on points of law are possible.
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10. DSU timetables
60 days Consultation, mediation
45 days Panel set up, appointments
6 mths Panel hears dispute and reports
3 wks Panel reports to WTO members
60 days Dispute Settlement Body adopts
report (if no appeal) TOTAL 1 year
60-90 daysAppeals report
30 days Dispute Settlement Body adopts
appeals report. TOTAL 1.25 years
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11. How the panels work
 Each side presents case in writing to panel
 First hearing-complaining country and
responding country present case
 Rebuttals-written and oral
 Experts, if appropriate
 Draft panel report given to both sides
 Interim report to both sides
 Review for two weeks
 Final report given to both sides and 3 weeks
later to all WTO members
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12. Remedies?
 Obligation on parties to respect ruling
 Trade sanctions possible
e.g. See www.wto.org and go to Case Studies
Thailand: Conciliating a Dispute on Tuna Exports to the EC
Dispute Settlement between Developing Countries-Argentina and
Chilean Price Bands
Pakistan’s Dispute Settlement with the US on Combed Cotton Yarn
exports.
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