THE ENFORCEMENT OF MULTI-TIERED DISPUTE RESOLUTION CLAUSES IN INTERNATIONAL CONTRACTS

Authors

  • PIERRE BIENVENU

Keywords:

Contract Law

Abstract

Multi-tiered dispute resolution clauses encourage parties to seek a consensual solution to contractual disputes, while providing a binding dispute resolution process such as arbitration as a backstop. However, these clauses raise important enforcement issues. Although at common law it has been held that agreements to negotiate are unenforceable, a good case can be made for distinguishing ADR clauses requiring negotiations and mediation from unenforceable agreements to agree. While the matter involve negotiations to settle the terms of a contract, the former require the parties to participate in a defined process regardless of the outcome. Few Canadian courts have considered what remedies may be available for failing to comply with the initial steps of a multi-tiered ADR clause, or indeed the question of whether the arbitral tribunal rather than the court should decide enforceability and compliance issues. In such circumstances, appropriate drafting is imperative for such clauses to be effective .

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Published

2003-08-01

Issue

Section

Legal Commentary