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International Centre for Dispute Resolution

Article provided by Sally & Fitch LLP

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In a growing, global economy where alternative dispute resolution is becoming more and more common, the

International Centre for Dispute Resolution provides an increasingly important forum for resolving international

business disputes.

What is ADR?

Alternative dispute resolution offers a different forum for resolving disputes than the traditional adversarial

court system. The two most common types of ADR are meditation and arbitration.

During mediation, parties work together with an impartial mediator in a more collaborative process to find a

solution to their dispute. The mediator typically does not have the authority to make any decision made by the

parties binding upon them. Parties may use the mediation process first before proceeding with the more formal

arbitration process.

Arbitration is more like an informal court proceeding than mediation. Each party is given an opportunity to

present its claim, supporting evidence and witness testimony before an independent and impartial arbitrator. The

arbitrator may be a single person or a panel. After each side has had an opportunity to be heard, the arbitrator

will issue a written decision to settle the dispute. The decision can include an award of damages. Unlike

mediation, arbitration decisions are generally binding and enforceable.

What is the ICDR?

The International Centre for Dispute Resolution is the international branch of the American Arbitration

Association (AAA). It was formed in 1996 to exclusively handle international disputes. The ICDR has

cooperative agreements with arbitral institutions in more than 40 countries and handles hundreds of cases each

year. The ICDR employs experienced and multilingual staff, case managers, arbitrators and mediators. The

ICDR can preside over arbitrations held anywhere in the world.

How does international arbitration work?

Generally, parties will have agreed to use arbitration to settle any disputes that may arise before a disagreement

ever occurs, usually through a clause in their contract or a separate arbitration agreement. The arbitration

agreement can stipulate how the process will work, where the arbitration will be held, how many arbitrators will

be used or even the specific arbitrator(s) that will decide the dispute. Parties also have the option of using

arbitration after the dispute arises, but all parties involved must agree to use the alternative forum.

To initiate the process, one party (the claimant) will file a written notice with an ICDR administrator and the

other party to the dispute. This notice, much like a typical legal complaint, will include the parties' decision to

use arbitration to settle the dispute, reference the contractual clause requiring arbitration (if applicable), provide

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a concise statement of the facts of the dispute and any supporting evidence and list the type of remedy the

claimant is seeking from the other party.

Once the notice has been filed and received, the other party (the respondent) has 30 days to file its own written

statement (the defense statement) in response to the claimant's statement. The defense statement also may

contain any counterclaims by the respondent as well set offs of any claims covered by the arbitration agreement

between the parties. The defense statement must be provided to the ICDR administrator and the claimant. After

the defense statement has been filed and received by the claimant, the claimant will have an additional 30 days

to respond to the defense statement.

If the parties did not provide a process for selecting the arbitrator or cannot come to an agreement on which

arbitrator to use, the International Arbitration Rules provide that the ICDR will select the arbitrator.

The procedure of the actual arbitration is much more flexible than the procedure used by courts. Unless the

parties have specifically agreed to a certain procedure, the arbitrator is allowed to conduct the arbitration in any

manner he or she sees fit. The only requirement is that each party is treated fairly and given equal opportunity to

be heard before the arbitrator.

Most arbitration proceedings are completed within 45 days, but may take longer at the discretion of the

arbitrator. The proceedings are completely private and confidential, unless the parties agreed differently or

controlling law requires otherwise.

How are final decisions made by the arbitrator?

After both sides have had a fair opportunity to present their cases and supporting evidence, the arbitrator will

issue a decision. If there is a panel of arbitrators, the majority vote will determine the outcome. The arbitrator's

decision is generally binding on the parties and enforceable.

Many countries have laws that recognize and enforce arbitration decisions. Currently, 144 countries have ratified

the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the international treaty

requiring countries to recognize arbitration agreements and uphold and enforce arbitration decisions made by

other countries. A list of the countries that have ratified the treaty is available at the United Nations Commission

on International Trade Law Web site, available at www.uncitral.org.