Tier trouble

  • May 2008
  • Client publication/article

Multi-tiered dispute resolution clauses can provide for various different steps before litigation or arbitration, including escalation of the dispute to increasingly senior executives of the relevant parties, and/or for reference to experts or to mediation pursuant to an established set of rules such as those of the Centre for Effective Dispute Resolution (CEDR) or the ICC ADR rules.

The increasing use of these clauses raises a number of questions, such as whether a party should agree to such a clause in its contracts, and the related question of whether they are enforceable at all. In cases where the clause provides for ultimate dispute resolution by arbitration, there is the added complication of the arbitrator’s own jurisdiction potentially being wholly absent if there is a failure to comply with the earlier ADR tiers.

This article considers the pros and cons of multi-tiered dispute resolution clauses, whether they are enforceable, and the specific arbitration context.

This article was originally published in the Legal Business Arbitration Report 2008.

 
 

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Jonathan Cotton (partner)

 
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