Choosing a regulation process

When parties draw up a contract, their purpose is to arrange the way in which they will jointly pursue the economic objective they have set themselves. Difficulties may beset the fulfilment of this objective. This is notably the case when contracts are made for a certain length of time. For instance, agreements that have been made may prove to be imprecise and need clarifying, they may be upset by new circumstances, or the parties may behave badly along the way.

As a first step, taken rationally and in good faith, the parties should weigh up the situation together and mutually agree whether it is possible and appropriate economically to continue the initial project, maybe on a modified basis. If not, they should together determine a suitable way of parting company "on good terms". In seeking such a consensus, the parties may receive technical enlightenment from a specialist or support from a mediator, who may help them to see eye to eye. If the parties are unable to reach agreement, then in practice it is necessary to resort to a third party - judge or arbitrator - characterised by his or her ability to settle the controversy and decide with the authority imparted by such a position. The final decision handed down by the judge or the arbitrator has binding force upon the parties, who have an obligation to carry it out.

As can be seen, there are many ways of settling the various situations (from joint interpretation of the contract to litigation). Within this assortment, the expression "alternative dispute resolution" (ADR) is often used to mean either all methods of resolution other than through courts of law, or the methods that do not resort to a ruling from a third party, whether arbitrator or judge.

Practice shows that several of these methods may be used successively in one and the same dispute and that toing and froing between the different methods is not unusual according to circumstances, the parties' moods, or indeed a truer awareness of the respective strengths and weaknesses of those involved. Hence, it is common for parties to turn to arbitration when attempts to reach a friendly settlement fail and then, enlightened by the arbitral proceedings, to decide to end their dispute by a settlement agreement.

It also helps to reduce the number and the difficulty of disputes if contracts are made to a high standard and then properly performed. Such considerations should be ever present in the minds of negotiators. For businesses, preventing disputes and wisely organising the way they are settled, which is largely in their hands, are crucial to profitability and sometimes even survival.

The foregoing suggests that there is no method of dispute resolution that in itself has unfailing supremacy over all others. It all depends on the circumstances and, above all, the parties' intentions.

This fact should help to guide businesses in determining their legal policy for choosing a method of dispute resolution and should enable negotiators to make the most appropriate practical choices in individual cases.

Literature

І. Основна література

1. Bortolotti, Fabio. Drafting and Negotiating International Commercial Contracts [Hardcover]. - Wolters Kluwer Law & Business, 2009. – 480 p.

2. Dimatteo, Larry. Law Of International Contracting: textbook. - 2nd Edition Revised. - Aspen Publishers, Inc., 2009. – 656 р.

3. Fontaine, Marcel,  De Ly, Filip. Drafting International Contracts: An Analysis of Contract Clauses [Hardcover]. – Martinus Nijhoff Publishers / Brill Academic, 2006. – 653 p.

4. Міжнародні комерційні угоди та розрахунки: нормативно-правове регламентування: навч. посіб. для студ. вищ. навч. закл. - К.:Центр учбової літератури, 2010. - 648 с.

5. Прищепа, Н. П. Менеджмент зовнішньоекономічної діяльності: підруч. для студ. вищ. навч. закл. / Прищепа Н. П. – Луганськ: ЛНУ імені Тараса Шевченка, 2009. - 152 с.

6. Типові та примірні документи у сфері господарювання. Договори, угоди, контракти, статути, положення. - К.:Атіка, 2009. - 760 с.