4 Types of International Dispute Settlement Mechanism

Disputes in business, government, economy, and international trade affect people. Dispute resolution is a time taking process. Although they resolve cases eventually. A dispute mechanism techniques are alternative to litigation. These methods are used to resolve several disputes involving businesses, families, consumers, and employees. Parties can choose alternative dispute resolution methods because they are cost-effective, flexible, and easy to follow. This blog will tell you about some of the dispute resolution techniques for you to consider when the need arises. 

International dispute settlement mechanism

International dispute settlement mechanism is a structured process to address disputes in complex international trade relations. Sometimes it is known as a grievance mechanism because the method is different from usual court cases. Since this method has emerged as an effective tool for resolving a variety of trade-related disputes between parties, it is widely preferred today. Here are some of the main Dispute Settlement Mechanisms. 

Types of Dispute Settlement Mechanism

1. Independent Negotiations- This is not legally binding and is viewed as one of the best options to resolve a dispute. 

In some cases, parties take a simple approach to solve matters 

across tables. Some parties need dispute resolution specialists 

to negotiate on their behalf. There is no involvement of a third party and parties must work together to reach an agreement.

2. Arbitration- Arbitration is a private arrangement to resolve a dispute with the help of an arbitrator. The parties seeking arbitration have to follow a final and binding decision of an arbitrator. An arbitrator acts as a judge and manages all proceedings where both parties equally participate and present their side of the story. The Parties seeking arbitration have to follow a final and binding decision of an arbitrator.

International chamber of commerce, arbitration is a leading institution for dispute resolution processes. It has received 853 new cases in 2020-2021.  There was also an increase in the number of cases registered under ICC arbitration rules in 2021. 

An arbitrator acts as a judge and manages all proceedings where both parties equally participate and present their side of the story.

types of arbitration

It is the most flexible form of judgment that is discreet and binding. Here are some types of arbitration. 

● Fast track arbitration -  Fast track arbitration solves cases within 3 to 6 months and deals with trade-related matters. 

● Institutional Arbitration - When arbitration proceedings come under an exclusive institution, it is known as institutional arbitration. Every organization has its own set of rules to proceed with arbitration.

● Ad -hoc arbitration - It is a type of arbitration that is not administered by any institution. If you consider this, you are required to determine all aspects of the arbitration like procedure, selection of arbitrators, and their appointment.

● Statutory arbitration - This type of arbitration is conducted in accordance with special acts only. This means parties have to abide by these rules and they cannot deny rules.

● Contractual Arbitration - Parties interested in contractual arbitration need to write purchase orders or agreements, dealing with terms of business. 

3. Mediation- Mediation is another type of dispute resolution process facilitated decision by a third party. But it cannot give a binding decision. In such dispute methods, parties resolve their disputes under the supervision of a mediator to help parties find a common ground and resolve their disputes. It is completely up to you to choose mediation to resolve disputes. In some cases, mediation is an outcome of order by courts and other justice centers. 

4. Conciliation - Conciliation is a voluntary and flexible process just like arbitration. A conciliator will facilitate the process by acting as a neutral third party. In such a dispute resolution process, parties need to provide a non-binding agreement. In short, it is a flexible process defined by the appropriate structure and content of the conciliation proceedings. Due to easy and cost-effective proceedings, conciliation is widely preferred.  

Conclusion 

Dispute mechanisms are effective measures for dispute resolution between businesses and parties. They provide a credible and transparent solution to parties looking for a quick and cost-effective way of solving trade-related issues. If you want to resolve your dispute, you can choose arbitration, mediation, or anything that is suitable for you. So, contact a qualified attorney to represent your interest in the best way. 

Location: Sweden

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