1.  Q: Do business disputes have to be resolved through court action?

A: Litigation is the last resort. You may resolve the disputes through mediation or arbitration.

2.  Q: Why does business need mediation and arbitration?

A: In the event of a dispute, litigation seems to be first thing that comes to mind. However, litigation is time-consuming and costly, and the process and content of the lawsuit will become public records, which may sometimes lead to negative media coverage that affects reputations. Besides, litigation often turns business partners into enemies. Therefore, more and more businesses choose to use alternative dispute resolution such as mediation and arbitration to resolve their disputes as they offer a mechanism that is more flexible, economical, fair, fast and confidential for resolving conflicts in business.

3.  Q: What is mediation?

A: Mediation is a voluntary, confidential and private dispute resolution process in which a neutral person, the mediator, helps the parties to reach their own negotiated settlement agreement. The mediator has no power to impose a settlement. His/Her function is to overcome any impasse and encourage the parties to reach an amicable settlement.

In commercial disputes an impasse most often arises from either a lack of trust in the integrity of the other party or a genuine good faith difference of opinion on the facts underlying the dispute or on the probable outcome of the case were it to go to court. The mediator may act as a shuttle diplomat and a channel for communication, by filtering out the emotional elements and allowing the parties to focus on the underlying objectives. The mediator will encourage the parties to reach an agreement themselves as opposed to having it imposed upon them.

Mediation has proven to be an outstandingly successful management tool for resolving difficult disputes. It is a means by which the parties can re-learn the basis of communication with which they can then resolve future disputes.

4.  Q: What is arbitration?

A: Arbitration is a consensual dispute resolution process based on the parties’ agreement to submit their disputes for resolution to an arbitral tribunal usually composed, of one or three independent arbitrators appointed by or on behalf of the parties. An arbitration is conducted in accordance with the terms of the parties’ arbitration agreement which are often found in the provisions of a commercial contract or applicable investment treaty. Arbitration is known for its procedural flexibility, which allows parties to engage in an efficient, confidential and fair process leading to a final, binding and enforceable award. Arbitration awards are enforceable in over 150 countries around the world due to the application of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention).