How International Mediation and Arbitration Work in the Corporate World

What are Mediation and Arbitration ?

Mediation and Arbitration are features of the business landscape that let aggrieved parties resolve their disputes in a structured manner. In the corporate world, breach of contract, non-compliance with the terms of the agreement between companies, failure to pay or complete the work and other disputes are usually resolved through mediation and arbitration. For instance, either the conflicts between corporates like the disagreement between the client and a company over the non-performance of or the non-compliance of can be resolved through mediation and arbitration.

In the Asia Pacific region, there are several disputes as we shall discuss later that have been resolved through mediation and arbitration in international bodies based in Singapore.

Similarly, the US and the Europe have dispute resolution bodies that deal with jurisdictional issues in their regions.

Further, the WTO or the World Trade Organization is another multilateral body that resolves trade and other commercial disputes between countries.

The point here is that disputes and conflicts are as much a fact in the corporate world as the usual signing of agreements, as either party might feel aggrieved about the role of the other in the performance of the contract or the agreement.

The Role of International Mediating Bodies

As mentioned in the above paragraph, there are many international mediating bodies that resolve the disputes between companies, countries, and any other entities that have sued each other for non-performance of contracts and breach of agreements.

These international bodies usually have specific jurisdiction over the regions and the type of entities who may refer to them for dispute resolution. Most of these mediating and arbitrating bodies are usually staffed by judicial experts who are conversant with the different aspects of international trade law and commercial obligations of the entities.

These international bodies are mandated through treaties and supranational agreements between countries that confer on them the authority and the power to adjudicate disputes and conflicts.

For instance, the WTO mediates between countries and the arbitration council mediates between companies.

Similarly, the United Nations has several organizations that mediate between companies and commercial entities that have pending disputes.

As we shall discuss in the next section, the examples of mediation and arbitration serve to illustrate the complex nature of international mediation and arbitration.

The Case of Microsoft, Polaris, and GMR Enterprises

If we take the example of Microsoft and its anti-trust dispute with the EU or the European Union, we find that the conflict over whether Microsoft was engaging in trade practices that were monopolistic was resolved in favor of the EU.

Similarly, in India, Polaris software had a long running dispute with its Indonesian clients about nonpayment and breach of contract, which was resolved through mediation and arbitration in Singapore.

The case of Polaris is significant as the company was literally forced to accede to the demands of its clients before the case was adjudicated. This shows the importance of international mediation that can deliver justice to the aggrieved parties.

Third, in recent times, the GMR led consortium that was tasked with the building of an international airport in the capital city of Maldives; Male was suddenly taken off the project because of a change in the government of Maldives.

The company filed for mediation and arbitration in Singapore and the case is presently being heard with submissions from both sides.

These examples illustrate the importance of international mediation and arbitration and serve to highlight the fact that with globalization, the tendency for more complex conflicts in the corporate world results in more scope for mediators and arbitrators.

Concluding Remarks

Finally, mediation and arbitration work only when there are written contracts drawn up in an elaborate and structured manner.

As with disputes of any kind, mediation and arbitration can work only when the basis of wrongdoing and nonperformance can be proved. Unless these conditions are met, it is pointless for any aggrieved party to drag the counterparty to court for mediation and arbitration.