The disruption to business caused by the corona virus will inevitably leads to disputes. Examples that come to mind are the late supply or the failure to deliver critical supplies in an international supply chain, and the allocation of unforeseen risks and costs. Other questions might concern material adverse change (MAC) or force majeure provisions and insurance coverage for Corona-related issues. In most cases, going to court is not really an option, given the urgency involved in finding a solution.
In my opinion, more than ever, it makes sense to consider various methods of Alternative Dispute Resolution (ADR), such as mediation or adjudication. In the current circumstances, the likelihood is that businesses may benefit far more from a quick solution that may be 80% accurate than from a perfect judgment many months, if not years later.
Whether it is about resolving or mitigating conflicts with customers, suppliers or competitors, it is probable that both parties would benefit from finding a solution – and be is only an interim solution subject to a final determination – swiftly in a flexible and informal process.
If a contract already provides for mediation, the formal setting is straightforward. If a contract provides for arbitration, it is worth speaking to the arbitral institution provided for in the arbitration agreement, as many of them also offer ADR services or accelerated procedures, such as the ICC’s emergency arbitrator proceedings. These institutions typically are happy to help to broker an agreement between the parties about alternatives to the standard arbitration model. The German Arbitration Institute (DIS) offers an entire suite of ADR procedures (which I discuss here in more detail), comprising conciliation, adjudication, mediation and expert determination.
Even if a contract is silent on ADR, or the matter concerns non-contractual claims, I suggest evaluating whether it makes sense for the parties to speak to each other about alternatives.
There are many experienced mediators out there, who are accustomed to setting up meetings, by phone or videoconference, at rather short notice. They are trained to help parties find a sustainable way forward. And they offer the speed and flexibility that the courts typically cannot, and even less so now in times of lock-downs and curfews. Leading international ADR providers such as JAMS in the United States or CEDR in the United Kingdom provide guidance on on-line mediations on their websites.
Of course parties who have not used ADR procedures before might feel uncomfortable using ADR for the first time in these uncertain times. They can rest assured that many in our profession have been there before. They have first-hand experience of ADR procedures – for what it’s worth, I have trained and practised as a mediator – and are happy to talk you through the pros and cons of ADR in their specific situation and help them find the right approach for the case at hand.