Banking Academy of Vietnam

International school of Business

Alternative Dispute Resolution Methods

Subject: Business Law

Lecturer: Mrs. Phan Truc Linh
Class: CityU9A

Group 2
Members of group:
Le Minh Trang CA8-060
Nguyen Hai My CA9-050
Nguyen Thi Anh Chinh CA9-013
Nguyen Cong Minh Hoang CA9-032
Tran Trung Kien CA9-036

Hà Nội, ngày 28 tháng 03 năm 2023

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 Table of Contents
I. Introduction …………………………………………………………………….3
II. Alternative dispute resolution ………………………………………………….3
1. Definition…………………………………………………………………………...3
2. Features……………………………………………………………………………..4
3. Advantages and Disadvantages ……………………………………………………5
4. Procedure……………………………………………………………………...........6
5. Award enforcement……………………………………………………………...…7
III. Relations with domestic courts ………………………………………………..8
1. Comparison between ADR and JDR ……………………………………………....9
IV. Case study …………………………………………………………………….11
V. Conclusion…………………………………………………………………….12
VI. References …………………………………………………………………….13

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I. Introduction :
The substantive law recognizes the following business dispute resolution methods :
 Alternative dispute resolution (ADR)
 Judicial dispute resolution (JDR)
Accordingly, when a business dispute occurs, the parties can resolve the dispute through direct
negotiation with each other. In the event of non-negotiables, dispute resolution can be done
with the help of a third party through conciliation, arbitration or a court. The settlement of
business disputes is based on the important principle that the parties are entitled to self-
determination. State agencies and commercial arbitration only intervene at the request of the
disputing parties.
In the conditions of the market economy, commercial activities are increasingly diversified
and constantly developing in all fields of production, trade, service, investment... The problem
of choosing a method dispute settlement in business and commerce must be considered and
selected appropriately by the parties based on factors such as objectives to be achieved, the
nature of the dispute, the business relationship between the parties, time and costs for dispute
resolution.
As commercial business activities is getting better and better , the commercial disputes and
conflicts occur are inevitable. Therefore, choosing a dispute resolution method to make a
reasonable decision that both ensures benefits for the company and maintains business
relationships is considered ahead for enterprise. In this article, we will discuss and clarify more
about dispute resolution methods (usually with the help of neutral third parties) without
adjudication.

II. Alternative Dispute Resolution

1. Definition:
Alternative Dispute Resolution (ADR) refers to methods of resolving conflicts or disputes
without going through a formal court trial. The most common types of ADR methods include:

 Mediation: This involves a neutral third party, known as a mediator, who facilitates a
negotiation between the parties to help them reach a mutually acceptable solution. Mediation
is commonly used in family law, employment, and commercial disputes.

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 Arbitration: This is a process where a neutral third party, known as an arbitrator, hears
evidence and arguments from both sides and makes a binding decision. It is often used in
commercial, construction, and labor disputes.

2. Features
ADR has several features that distinguish it from traditional court-based litigation. These
features include:

 Voluntary: ADR is typically a voluntary process. The parties involved must agree to
participate in the ADR process and to be bound by any decision or settlement reached through
that process.

 Confidential: ADR proceedings are generally confidential. This means that the discussions,
documents, and outcomes of the ADR process are not disclosed to anyone who is not involved
in the process.

 Informal: ADR is generally less formal than court proceedings. The parties may be able to
choose a more relaxed setting, and the process may be more flexible and adaptable to the
parties' needs and preferences.

 Collaborative: ADR often involves a collaborative approach, where the parties work together
to find a mutually acceptable solution. This can foster a greater sense of cooperation and a
willingness to find common ground.

 Empowering: ADR can empower the parties involved, as they have more control over the
process and outcome than they would in court. The parties have the opportunity to actively
participate in the process and to have a say in the outcome.

 Cost-effective: ADR can be a cost-effective way to resolve disputes, as it may be less

expensive than going to court. The parties may be able to avoid the costs associated with formal
court procedures, such as attorney's fees, court fees, and expert witness fees.

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 Overall, the features of ADR make it an attractive option for many individuals and
organizations who are seeking to resolve disputes in a more efficient, collaborative, and cost-
effective manner.

3. Advantages and disadvantages:

Alternative Dispute Resolution (ADR) has several pros and cons, which are outlined below:

Pros:
 Cost-effective: ADR can be less expensive than going to court, as it may involve lower fees,
less time spent on legal processes, and fewer legal fees.

 Time-efficient: ADR can be a quicker way to resolve disputes than going to court, as parties
can choose their own schedule and do not have to rely on the court's calendar.

 More flexible: ADR allows parties to design a process that suits their needs and preferences,
including selecting the mediator or arbitrator, setting the schedule, and choosing the location.

 Confidential: ADR proceedings are generally confidential, which can be important for parties
who do not want the details of their dispute to be made public.

 More control: Parties have more control over the process and outcome in ADR than in court,
as they can actively participate in the process and have a say in the final outcome.

Cons:
 No guarantee of resolution: Unlike court proceedings, ADR is not always successful in
resolving disputes, and there is no guarantee that the parties will reach an agreement.

 May not be binding: Some forms of ADR, such as mediation, are non-binding, which means
that either party can walk away from the process without a resolution.

 Lack of legal precedent: Unlike court decisions, ADR decisions do not set legal precedent and
are not binding on other parties or in other cases.

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 Limited discovery: In some forms of ADR, such as mediation, there may be limited
opportunity for discovery, which can make it more difficult to fully understand the underlying
issues in the dispute.

 Imbalance of power: ADR can sometimes be influenced by an imbalance of power between

the parties, such as when one party has greater resources or negotiating skills.

In conclusion, while ADR has many benefits, it may not be the best option for every dispute.
Parties should carefully consider the pros and cons of ADR and consult with legal counsel
before deciding on a course of action.

4. Procedure
The procedure for ADR will depend on the specific type of ADR being used. Generally, the
process will involve the following steps:

Agreement to participate: The parties must agree to participate in ADR and select the type of
ADR they wish to use.

Selection of the neutral third party: If the parties choose mediation or arbitration, they will
need to select a neutral third party to facilitate the process.

Initial meeting: The parties will meet with the neutral third party to discuss the process,
establish ground rules, and set expectations.

Information gathering: The parties will provide information to the neutral third party to help
them understand the issues and develop possible solutions.

Negotiation or decision-making: The parties will either negotiate directly with each other (in
the case of negotiation or mediation) or present their case to the neutral third party (in the case
of arbitration).

Resolution: The parties will reach a resolution that is acceptable to both parties.

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 Implementation: The parties will implement the resolution, which may involve signing a
written agreement or taking other steps to comply with the terms of the resolution.

Overall, the goal of ADR is to provide a faster, less expensive, and less adversarial process for
resolving disputes than traditional litigation.

5. Award enforcement
Award enforcement of ADR refers to the process of ensuring that the terms of a binding
decision made through an ADR process are carried out. If the parties have agreed to binding
arbitration, for example, the arbitrator's decision is final and legally binding on both parties.
Similarly, if the parties have agreed to mediation and have reached a settlement agreement, that
agreement is legally binding and enforceable.

In order to enforce an ADR award, the party seeking enforcement will typically need to file a
petition or motion with a court. The specific procedures for enforcement will depend on the
laws of the jurisdiction where the ADR award was made and where enforcement is being
sought.
In general, however, the following steps may be involved:
 Confirming the award: Before an ADR award can be enforced, it may need to be confirmed
by a court. This process typically involves filing a petition or motion with the court and
providing evidence of the ADR award, such as a copy of the arbitration decision or mediation
settlement agreement.

 Obtaining a court order: Once the award has been confirmed, the party seeking enforcement
will need to obtain a court order directing the other party to comply with the terms of the award.
This may involve filing additional motions or petitions, presenting evidence to the court, and
arguing the case before a judge.

 Collection of damages: If the ADR award involves a monetary award or damages, the party
seeking enforcement may need to take additional steps to collect the money owed. This may
involve garnishing wages or bank accounts, placing a lien on property, or taking other legal
actions to enforce the court's order.
Enforcement of ADR awards can be a complex and time-consuming process, but it is an
important aspect of ensuring that parties can rely on the decisions made through ADR

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 processes. By enforcing these awards, parties can have confidence that their disputes will be
resolved fairly and effectively, without the need for lengthy and expensive litigation.

The 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral
Awards is an international treaty that aims to facilitate the recognition and enforcement of
foreign arbitral awards in signatory countries. The Convention provides a framework for the
recognition and enforcement of arbitral awards made in other countries, ensuring that such
awards are recognized and enforced in signatory countries in the same way as domestic arbitral
awards.

III. Relations with domestic courts

1. Recommendations for Court-Related Alternative Dispute Resolution in Civil
Proceedings
 In civil cases, the parties should have access to ADR.
 Alternative Dispute Resolution (ADR) should be considered in all appropriate cases.
 A Judge should be proactive in recommending ADR in appropriate cases.
 The judiciary should be trained in aspects of alternative dispute resolution.
 ADR should take place as early as possible in the dispute.
 Member States should promote, monitor and analyze ADR.
 Failure to participate in ADR procedure may be sanctioned

2. Minimum standards for court-related alternative dispute resolution in civil cases

 The essential procedural safeguards in Court-related ADR in civil actions should include the
following provisions:
- The right to an equal position/equality of arms;
- That the solution achieved during the ADR proceeding actually reflects the participants' real
and sincere will;
- Protection against publication of material revealed during ADR in subsequent legal
proceedings;
- The principle of confidentiality.

 In order to support the above mentioned procedural safeguards:

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– Only those with training accredited by an appropriate professional body should be allowed to
lead an ADR procedure;
– Appropriate training should be available to all judges to recognise the advantages and risks
together with the potential need for ADR procedure.

 A judge who has led an ADR procedure may not serve as a judge in the subsequent trial unless,
in accordance with domestic law, both parties express a desire to continue proceeding with the
same Judge and the Judge considers the circumstances of the case to be such that it would be
appropriate for him/her to do so, taking into account the need for objective independence and
impartiality.

 Parties should be adequately informed about the ADR rules and procedures

 Following the completion of an ADR procedure, the settlement may be formally enforced if
approved by a Court. Once the ADR process is completed, the parties should have the option
of reopening the case, but only in exceptional circumstances.

3. Comparison between ADR and JDR

Judicial dispute resolution (JDR) is a type of dispute resolution that involves a judge or judicial
officer facilitating the resolution of a dispute outside of a formal trial or hearing. In JDR, the
judge acts as a neutral third party and uses their legal expertise to help the parties reach a
mutually agreeable resolution.

The JDR process is often used in civil cases where the parties have not been able to resolve
their dispute through negotiation or mediation. The judge may hold a pre-trial conference with
the parties to discuss the issues in the case, identify areas of agreement and disagreement, and
explore possible settlement options. During the conference, the judge may offer their opinion
on the merits of the case or provide guidance on how to resolve the dispute.

ADR and JDR are two different approaches to resolving legal disputes. Some key differences
between them include:

ADR JDR

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 Control over The parties have more control over the The process is controlled by
process process and the outcome of the dispute. the court and the outcome is
They can choose the type of ADR process decided by a judge or jury
they want to use, select the neutral third
party who will facilitate the process, and
have a greater say in the outcome

Confidentiality Proceedings are generally confidential, Proceedings are generally

meaning that the details of the dispute and open to the public and the
the negotiations or discussions that take details of the dispute are part
place during the process are not disclosed of the public record.
to the public

Time and cost Faster and less expensive , can be Much longer, often
completed in a matter of weeks or months stretching out over several
years

Outcome Have more control over the outcome of the Determined by a judge or
dispute and may be able to reach a jury, who may not fully
resolution that is more tailored to their understand the nuances of
specific needs and interests the dispute or the parties'
specific needs and interests

Finality The outcome is usually final and binding, The outcome may be
meaning that the parties cannot appeal the appealed, which can further
decision or take the matter to court extend the time and cost of
the dispute resolution
process

Alternative dispute resolution (ADR) is often used to solve international disputes for several
reasons:

Flexibility: ADR methods, such as mediation or arbitration, can be tailored to meet the specific
needs of the parties involved in the dispute. This is particularly important in cross-border
disputes, where parties may come from different legal and cultural backgrounds.

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 Confidentiality: ADR proceedings are typically private and confidential, which can be
appealing to parties who wish to avoid the negative publicity that can come with a public court
hearing.

Speed and cost-effectiveness: ADR can often be faster and more cost-effective than going
through traditional court proceedings, which can be especially important in complex
international disputes that could drag on for years.

Expertise: In some cases, parties may choose ADR methods because they want to work with
an expert in the relevant field, such as an arbitrator with specific knowledge of international
trade or investment law.

Enforceability: Many countries have signed international treaties that make it easier to enforce
arbitration awards and other ADR outcomes across borders, which can provide greater certainty
for parties involved in cross-border disputes. For these reasons, ADR has become an
increasingly popular method for resolving international disputes, particularly in the areas of
international trade, investment, and intellectual property.

The choice of which approach to use will depend on the specific circumstances of the dispute
and the needs and preferences of the parties involved

For example, if two parties are involved in a contract dispute, they might choose to try ADR
first. They might choose to negotiate directly with each other or hire a mediator to help them
find a resolution. If ADR is unsuccessful, they might then choose to go to court and have a
judge make a decision in a JDR process. In JDR, the judge would hear arguments from both
parties, make a decision based on the evidence presented, and issue a ruling that is legally
binding on both parties.

IV. Case study

Microsoft Corporation v. Motorola Inc. is a high-profile case that demonstrates the use of
arbitration as a form of Alternative Dispute Resolution (ADR). The case involved a dispute

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over the licensing of certain patents, with Motorola demanding a higher licensing fee than
Microsoft was willing to pay.

Rather than going to court, the parties agreed to use binding arbitration to resolve the dispute.
The arbitration proceedings took place over several months, with both sides presenting
evidence and arguments to an independent arbitrator. In the end, the arbitrator awarded
Microsoft a lower licensing fee than Motorola had been demanding, resolving the dispute in
favor of Microsoft.

This case illustrates the benefits of using arbitration as a form of ADR. Arbitration allowed the
parties to resolve their dispute outside of the court system, with a neutral third party making a
binding decision that both parties agreed to accept. By avoiding litigation, the parties were able
to save time and money, while also achieving a resolution that was tailored to their specific
needs and interests.

It's worth noting that this case also highlights some of the potential downsides of arbitration.
Some critics argue that arbitration can be biased towards corporations, as the arbitrators are
often chosen by the corporations themselves and may have a financial interest in ruling in their
favor. However, in this case, both parties agreed to the selection of the arbitrator and accepted
the decision, indicating that the process was fair and impartial.

Additionally, City of Sacramento v. Sacramento County is a case that demonstrates the use of
mediation as a form of Alternative Dispute Resolution (ADR). The case involved a dispute
over the boundary between the City of Sacramento and Sacramento County, with both sides
claiming different portions of the land.

Rather than going to court, the parties agreed to use mediation to resolve the dispute. Mediation
is a form of ADR that involves the use of a neutral third party (the mediator) to facilitate
negotiations between the parties and help them reach a mutually acceptable solution.

In this case, the parties engaged in several mediation sessions, with the mediator helping them
explore various options and trade-offs. Eventually, they were able to reach a settlement that
defined the boundary between the City and the County, avoiding the need for a costly and time-
consuming court trial.

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 This case illustrates the benefits of using mediation as a form of ADR. Mediation allowed the
parties to have greater control over the process and outcome, as they were able to work
collaboratively to find a solution that worked for both sides. It also allowed them to avoid the
adversarial nature of the court system, which can often lead to an all-or-nothing outcome.

By using mediation, the City and the County were able to save time and money, while also
maintaining their relationship and avoiding the potential long-term negative impacts of a
protracted legal battle.

V. Conclusion
In conclusion, Alternative Dispute Resolution (ADR) is a set of processes that can be used to
resolve disputes outside of traditional court proceedings. There are several different types of
ADR, including mediation, arbitration. ADR has gained popularity as an effective and efficient
way to resolve disputes in various fields such as business, employment, construction, and
family law, but there are also some drawbacks to consider. Ultimately, the choice between
ADR and traditional litigation will depend on the specific circumstances of each case and the
needs and preferences of the parties involved.

Bibiography

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