In a dispute? Why going to court isn’t always the answer
Have you ever considered an alternative solution to any contractual dispute or conflict you may have, instead of resorting to litigation in court — which some see as an endless cycle of delays and complicated procedures?
With the constant development of economics, the consequent complexity of transactions and the need for an extraordinary speed and effectiveness in resolving disputes, it was necessary to establish legal mechanisms through which parties could resolve their disputes quickly, fairly and effectively, with a flexibility and freedom not normally available in the courts.
Examples of alternative dispute resolution mechanisms that may be used instead of litigation are arbitration, mediation, conciliation and negotiation. Currently, many investors and traders use these methods to resolve contractual disputes because they can be cost-effective, flexible and quick, while maintaining confidentiality.
Arbitration is the most common alternative means of dispute resolution. When a dispute arises between the parties to a contract, they may refer it to an independent and impartial individual chosen and agreed by the parties, rather than taking the issue to court. Arbitration regulations have been established in the Kingdom since 1931, when the Commercial Court law was passed. This was followed by the Labor Law in 1969, the Arbitration Law in 1983 and a new Arbitration Law in 2012.
The availability of arbitration stimulates an attractive environment for investment by avoiding contractual obstacles that investors and traders may face. Arbitration is much faster than litigation. Importantly, it makes it possible for the parties to a contractual dispute to maintain good-natured relations, while resorting to court tends to encourage a more adversarial approach. Arbitration also secures confidentiality in investment transactions, while court hearings and proceedings are held in public.
Furthermore, arbitration plays a practical role in facilitating international business transactions and is a cornerstone of any international business relationship, given the freedom of choice of arbitrators, their country and even their language. Prominent international arbitration centers include the International Chamber of Commerce’s International Court of Arbitration, the Saudi Center for Commercial Arbitration, Dubai International Center for Arbitration and the Cairo Regional Center for International Commercial Arbitration.
The Arab economic world has made intensive efforts in adopting and raising awareness of arbitration. Examples include the formation of the Arab Arbitration Group of the International Chamber of Commerce, which holds its third annual meeting in Beirut this week and makes great efforts in educating on arbitration and its practices.
None of this, of course, diminishes the role and importance of the judiciary. However, choosing alternative means of dispute resolution is in line with the revolution in high-speed economic development, and the need to improve and revitalize national economies around the world.
• Dimah Talal Alsharif is a Saudi legal consultant, head of the health law department at the law firm of Majed Garoub and a member of the International Association of Lawyers.