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International Commercial Arbitration and Mediation

16.09.2006

|   Ari Syrquin, Advocate*

The European Commission has recently assigned a project to ADR Center (a Rome-based institution) aimed at promoting the use of Arbitration and Mediation to settle international commercial disputes; ADR Center will be offering intensive four-day training from 26 to 29 September 2006, in Istanbul. Participation in this course was reserved for selected seven jurists coming from Israel and fourteen more from Turkey.

Mediation and Arbitration are traditional methods of dispute resolution for deciding controversies between individuals, businesses and countries in the international level. The New York Convention of 1958 has been widely adopted, providing a favorable legislative climate that enables the enforcement of arbitration clauses. International commercial arbitration awards are recognized by national courts in most parts of the world, even more than foreign court judgments. A key component to the successful resolution of an international commercial dispute is the role played by the arbitrator or mediator.

 

Historically, arbitration and mediation have been used to settle many different types of disputes. These disputes have typically fallen into one of the following categories - international disputes, commercial disputes, and labor disputes. A recent example of the successful employment of an international mediation is that conducted by former President Jimmy Carter in Bosnia. Additionally, there are numerous examples of the historic resolution of international conflicts by arbitration such as its use by warring Greek city states.

 

Outside the political arena, arbitration and mediation have been used by businesses world wide to settle their commercial disputes. In Europe, businesses of differing national origin have frequently submitted their controversies to arbitration. In the United States, arbitration and mediation are often used to settle labor disputes arising from conflicting interpretations of existing employment contracts, construction disputes between general contractors and subcontractors relating to construction damage claims, or between contractors and owners relating to the interpretation of work and payment clauses in construction contracts, and shareholder disputes concerning the valuation of stock in closely held corporations, to name but a few examples. The submission of a commercial dispute to mediation and/or arbitration may be done voluntarily or at the prompting of a governmental agency.

 

While for the most part, the decision of whether or not to engage in commercial mediation and/or arbitration is a matter of contract and has been historically decided by the parties, there have been several occasions in which a government has intervened to require mediation and/or arbitration of a commercial dispute when it felt that the dispute threatened national interests.

 

The European Commission has recently assigned a project named "Promotion of International Commercial Arbitration and Other Alternative Dispute Resolution Techniques in the MEDA Region to ADR Center, a Rome-based institution which specializes in such matters. As a part of the projects activities aimed at promoting the use of Arbitration and Mediation to settle international commercial disputes, ADR Center will be offering intensive four-day training from 26 to 29 September 2006, in Istanbul. Participation in this course, was reserved to selected seven jurists coming from Israel and fourteen more from Turkey.

 

This EC-financed initiative results from the realization that one of the obstacles preventing enhanced trade and investment relations in Southern Mediterranean countries, particularly for Small and Medium Enterprises (SMEs), is the lack of a mature and reliable dispute resolution infrastructure for avoiding or efficiently resolving disputes that inevitably arise during the course of business relationships. Experience has demonstrated that Arbitration and Mediation have proven to be useful and efficient methods for settling international commercial disputes.

 

This project is therefore aimed at promoting mediation and arbitration in the Southern Mediterranean Region among arbitration centers, trade promotion agencies, chambers of commerce, and lawyers and judges associations, as well as establishing a better infrastructure for this work. The project operates by providing technical and other assistance in a wide range of activities. Among these there are alternative dispute resolution awareness-raising workshops, training courses for international mediators and arbitrators, development of specific cooperation agreements and networks between EU and non-EU Mediation/Arbitration Centres

 

The EC and the Consortium anticipate that upon the completion of the project, a more substantial mediation and arbitration infrastructure will be operational in the whole Mediterranean Region. This will enable and encourage foreign and local businesses and legal counsel to use up-to-date methods of both contract planning and dispute resolution to reduce, or even avoid entirely, the severe costs and delays associated with litigation, the traditional method of dealing with international commercial disagreements.

 

*Ari Syrquin is one of the seven Israeli jurists chosen by the European Commission to participate in the training.

 

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