Lesson 10: Litigation, mediation and arbitration

Question 1

If the opposing party makes you a settlement offer are you obliged to accept it?

Answer 1

No, a settlement offer is not binding until the other side accepts it. A settlement offer is just a proposal to resolve the case.

Question 2

Why should you always make sure that settlement negotiations are “without prejudice”?

Answer 2

So people can speak and write openly without fear that what they are saying may be used against them in court or arbitration

Question 3

What do you think is the biggest advantage of a settlement?

Answer 3

• Voluntary basis – the parties maintain control over the dispute
• Both parties can “win”
• Inexpensive (reg. costs)
• Easier to maintain good relations
• Possibility for confidentiality

Question 4

Is mediation binding?

Answer 4

Mediation is first and foremost a non-binding procedure. This means that, even though parties have agreed to submit a dispute to mediation, they are not obliged to continue with the mediation process after the first meeting

Question 5

Can the mediator talk to only one of the parties alone?

Answer 5

The mediator’s correspondence with the parties is not highly regulated

Question 6

What is Res Judicata?

Answer 6

• A judgment is final and binding on the parties

* Same matter cannot be tried

Question 7

What is precedents?

Answer 7

• Binding precedents

* Persuasive precedents (e.g. decisions from courts in neighboring jurisdictions)

Question 8

What is the difference between institutional arbitration and ad hoc arbitration, and what should you be aware of when choosing?

Answer 8

Institutional arbitration
• The institute assists in establishing the arbitral tribunal • The arbitration will follow the institute’s procedural rules
• Advantage: Firm setting – especially when the parties have not specified procedural rules, etc

Ad hoc arbitration
• Complete freedom of contract • The parties agree to the settings of the arbitration, including procedural rules
(can be left to be decided by the Tribunal)
• Advantage: Costs, “tailor-made arbitration”
• Disadvantage: No default position, requires extensive agreement

Question 9

How do you enforce an arbitral award?

Answer 9

Enforceable in country where counterpart has assets