Volume 27 (2010) / Issue 6
Multi-tiered dispute resolution clauses comprise different steps which begin with various alternative dispute resolution (ADR) techniques. In these clauses, arbitration is designed as the last step if the dispute cannot be resolved by preliminary ADR efforts. However, problems occur regarding the enforceability of these clauses when one of the parties does not comply with the procedure designed in the contract. This article seeks to define the nature of multi-tiered dispute resolution clauses in the light of the different views of scholars, courts, and arbitral tribunals, to ascertain the drafting problems that hinder their enforceability, and to clarify the essentials for an effective multi-tiered dispute resolution clause. The main finding of the article is that once drafted in an operative way, a multi-tiered dispute resolution clause should be respected and enforced as the choice of the parties.
All rights reserved