Dispute Settlement

and Damages

Session 6
Contract Law

Master in Management (MiM)

29/08/2023 1
 Today’s Program
Dispute Settlement &
Damages
• Recap
• DS: definition & mechanisms
• Litigation v. arbitration
• DS clauses
• Amex v. Italian Colors
• Arbitration everywhere?
• Damages
• Exercise on Damages
29/08/2023 2
 Recap
• Standard terms
• Non-Performance
• Defenses 
– Threat 
– Mistake & fraud 
– Hardship
– Force majeure + exercise
• Mining exercise

29/08/2023 3
 Book Recommendation

29/08/2023 4
 Dispute Settlement
• Legal dispute
A disagreement between parties concerning their
(contractual) rights & duties
• Dispute settlement (DS)
A set of mechanisms to resolve legal disputes

29/08/2023 5
 Dispute Settlement
Mechanisms
1
Distribution of Control over Proceedings
0.9

0.8
Negotiation
Contractual Parties

0.7 Mediation
0.6
Conciliation
0.5

0.4 Arbitration
0.3
Litigation
0.2

0.1

0
0 0.1 0.2
Third-party
0.3 0.4
Dispute
0.5 0.6
Settler
0.7 0.8 0.9 1

29/08/2023 6
 Litigation v. Arbitration
Litigation Arbitration
Limited choice of law Choice of law
Judge(s) assigned Choice of arbitrator(s)
Sometimes jury for fact-finding No juries
Location fixed (court seat) Choice of location
Judgment issued Award issued
Appeal options (not always) Finality of award (but some
review)
Direct execution of judgment Only court can execute award
Public Secret/confidential

29/08/2023 7
 Arbitral Institutions

29/08/2023 8
 Dispute Settlement Clauses
SIAC Model Clause
“Any dispute arising out of or in connection with this contract, including
any question regarding its existence, validity or termination, shall be
referred to and finally resolved by arbitration administered by the
Singapore International Arbitration Centre (“SIAC”) in accordance with
the Arbitration Rules of the Singapore International Arbitration Centre
("SIAC Rules") for the time being in force, which rules are deemed to be
incorporated by reference in this clause.
The seat of the arbitration shall be [Singapore].
The Tribunal shall consist of _________________ arbitrator(s).
The language of the arbitration shall be ________________.
This contract is governed by the laws of _________________.”

29/08/2023 9
 Dispute Settlement Clauses The
Separability Doctrine
• Substantive clauses | dispute settlement clauses
• Art. 7.3.5(3) UNIDR. Termination: dispute
settlement clauses continue to operate! 
• Invalidation of dispute settlement clause:
contract itself still in force

29/08/2023 10
 Dispute Settlement Clauses
Standard Terms I

What is a mandatory
Why waive a jury trial? arbitration clause?

Why would businesses

want to reduce the risk of
class actions?
29/08/2023 11
 Dispute Settlement Clauses
Standard Terms II
Qwant Terms of Service (2017) - Dispute resolution clause
“In the event of a dispute relating to the use of our Services, you can send us a
written complaint to the following address: […].
In case you are not satisfied with our answer or if you don’t receive an answer, you
can appeal, within one year following your written claim, to the Médicys mediation
center, either by postal way […], or online at the www.medicys.fr platform, in order
to resolve such dispute.
This mediation phase shall not exceed 90 days from the date of the
acknowledgement of receipt of the referral of the mediator. During the mediation
period, the parties agree not to initiate legal proceedings against one another
regarding the current terms and conditions. After the mediation time limit, in case
no agreement could be found, the parties will retrieve any right to act in justice.
Your appeal to the mediator is free, confidential and optional. We bear all the costs
of such mediation.”
29/08/2023 12
 AMEX v. Italian Colors
Briefing the case
FACTS – ISSUE – DECISION – REASON

Class action waivers in dispute settlement clauses

29/08/2023 13
 Arbitration Everywhere?

• What is the main issue the NYT article presents?

• What types of contracts are covered?
• What do you think of
mandatory arbitration and
class action bans/waivers?

29/08/2023 14
 Break!

29/08/2023 15
 Damages for Breach of
Contract
• Money damages for contractual non-
performance: Art. 7.4.1

• Distinct from damages in pre-contractual phase

(Manoukian case)

• Efficient breach

29/08/2023 16
 Damages
• Expectation measure: full damages
• Loss in value + other loss – cost & loss avoided
• But: foreseeability, certainty & non-avoidability
• Liquidated damage clauses!

29/08/2023 17
 Exercise on Damages
• Download exercise on
Blackboard

• Respond to questions in
20 minutes

• A plenary discussion
follows

29/08/2023 18
 Recommendations

If you would like to stay up to date on (international)

dispute settlement developments, you can take a look at the
following sources:
1) The New York Times (suits & litigation)
2) The American Bar Association (litigation news)
3) Arbitration Links blog (by Linklaters)
4) Global Arbitration News (by Baker McKenzie)
5) Global Arbitration Review (GAR) (behind paywall)

29/08/2023 19
 Thank you!

29/08/2023 20