INTERNATIONAL DISPUTE RESOLUTION

• In international trade, when drafting international contracts, the parties should be aware that the disagreements and disputes can arise at any time.

• Therefore, in the process of concluding an international economic agreement, the parties should note the provisions on the selection methods of dispute settlement if a dispute occurs.

• Currently, there are 5 dispute resolution

methods in international trade as follows:negotiation, mediation,

commercial arbitration, conciliation and courts.

1. COMMERCIAL ARBITRATION

• Section 2 of the Arbitration and Conciliation Act Cap 4 defines Arbitration

• Section 2 of the Arbitration and Conciliation Act defines Arbitration Agreement

• International arbitration is the process of resolving disputes between or among transnational parties through the use of one or more arbitrators rather than through the courts.

• It requires the agreement of the parties, which is usually given via an arbitration clause that is inserted into the contract or business agreement.

• The decision is usually binding.

• Arbitration is today most commonly used for the resolution of commercial disputes, particularly in the context of international commercial transactions (International Commercial Arbitration).

BENEFITS OF ARBITRATION

• Confidentiality And Privacy

• Informality Of the Proceedings

• Lower costs

• Efficiency

• Technical Specialism

• A final award which could be enforced at the courts

• DETERMINATION OF NUMBER OF ARBITRATORS * Section 10 ACA

• APPOINTMENT OF ARBITRATORS * Section 11

ACA

• EQUAL TREATMENT OF PARTIES * Section 18 ACA

• TERMINATION OF ARBITRAL PROCEEDINGS * Section 32 ACA

• APPLICATION FOR SETTING A SIDE ARBITRAL AWARD * Section 34 ACA

• RECOGNITION AND ENFORCEMENT OF AWARD * Section 35 ACA

• ENFORCEMENT * Section 36 ACA

THE CONCEPT OF ARBITRATION IN INTERNATIONAL TRADE

• Law Applicable

* The UNCITRAL ( United Nations Commission On International Trade Law ) Rules 1976

* The UNCITRAL Conciliation Rules 1976

* The UNCITRAL Model Law On International Commercial Arbitration 1985

* Recognition And Enforcement Of Foreign Arbitral Awards ( The New York Convention ) 1958

UNCITRAL ARBITRAL RULES 1976

• These rules were adopted by UNCITRAL in 1974 and their use was recommended by General Assembly of the UN in 1976

• Arbitration has a contractual and judicial element.

• In the contractual element of arbitration, there can never be arbitration with an agreement of the parties.

• The agreement of the parties may take the form of an arbitration clause in the original contract.

• The agreement of the parties determines the jurisdiction of the arbitrators

• Appointment of arbitrators * Section 11 ACA Cap 4

• Power Of arbitral tribunal * Section 17 ACA

• Place of arbitration * Section 20 ACA

• The arbitrator MUST not go beyond the powers, which the parties have conferred upon him.

• The arbitrator MUST not show bias in favor of one of the parties. Read: Cook International Inc v Jean

THE LAW GOVERNING THE ARBITRATION PROCEDURE

• Determination of rules of procedure * Section 19 ACA

• Place Of Arbitration * Section 20 ACA

• Commencement of arbitral proceedings * Section 21 ACA

• Language * Section 22 ACA

• Statement of claim and defense * Section 23 ACA

• Experts * Section 26 ACA

• Rules Applicable To substance of dispute * Section 28 ACA

Also Read:

* Oil Seeds (U) Ltd v Uganda Development Bank

* Uganda Post and Telecom v EAG Insurance

* NSSF v Alcon International Ltd

OUSTING OF JURISDICTION OF THE COURT

Read: Ruth Bemba v DAPCB

EFFECTS OF ARBITRATION CLAUSE IN A CONTRACT

Read:

* Kyadondo v The Cooperative Bank Ltd

* Phoebe Mugabi v PrintPak (U) Ltd

* East African Development Bank v Zziwa Horticulture Exporters Ltd

* Channel Tunnel Group Ltd v Balfour Beatly Construction Ltd

2. MEDIATION

•Mediation is a voluntary process in which an impartial person (the mediator) helps with communication and promotes reconciliation between the parties which will allow them to reach a mutually acceptable agreement.

•Mediation often is the next step if negotiation proves unsuccessful.

• Mediators do not decide cases or impose settlements.

• The mediator helps the parties to communicate and negotiate with each other in a constructive manner.

• The mediator also helps the parties to find a solution based on common understanding and mutual agreement.

• In Jurisdiction where mediation is MANDATORY before trial, if courts have mediators who are professionals in diverse fields can be called upon to mediate.

• In Uganda, Mediation is ALMOST compulsory in the commercial courts as per statutory Instrument No. 17 of 2003

• Also Read: The Commercial Court Division (Mediation Pilot Project) Rules

CHARACTERISTICS OF MEDIATION

• Promotes communication and cooperation

• Provides a basis for you to resolve disputes on your own

• Voluntary, informal and flexible

• Private and confidential, avoiding public disclosure of personal or business problems

• Can reduce hostility and preserve ongoing relationships

• Allows you to avoid the uncertainty, time, cost and stress of going to trial

• Allows you to make mutually acceptable agreements tailored to meet your needs

• Can result in a win-win solution

3. CONCILIATION

• Part 5 Of The Arbitration and Conciliation Act Cap.4 Provides for Conciliation

• This is an informal process in which a third party is positioned between the parties to create a channel for communications, usually by conveying messages between parties who are UNWILLING to face to face to identity common grounds and re-establish direct communication between the parties.

• This term is often interchanged with MEDIATION, However Conciliation involves more passive third party.

• The process can richly be combined with mediation in that once the parties re-establish direct communication, THEN conciliation May transform into Mediation.

• Commencement of conciliation proceedings * Section 49 ACA

• The conciliator assists the parties in an independent and impartial manner in an attempt to reach an amicable settlement.

• The principles of objectivity, fairness and justice MUST apply.

• The settlement agreement which is signed by the parties has same status and effect as an arbitral award under the Act

• Number Of Conciliator * Section 50 ACA

• Appointment of Conciliator * Section 51 ACA

• Submission Of statements to Conciliator * Section 52 ACA

• Role Of Conciliator * Section 53 ACA

• Communication between conciliator and Parties * Section 54 ACA

• Disclosure Of Information * Section 55 ACA

• Corporation of parties with Conciliator * Section 56 ACA

• Settlement Agreement * Section 58 ACA

• Status and Effect Of Settlement Agreement * Section 59 ACA

• Confidentiality * Section 60 ACA

• Termination Of Conciliation Proceedings * Section 61 ACA

4. NEGOTIATION

• Negotiation is the most basic means of settling differences.

• This is a process of communication,

direct or indirect where by parties who have opposing interests discusses without resort to arbitration or other judicial process, the dispute between them is finally resolved.

CHARACTERISTICS OF NEGOTIATION

• Voluntary

• Private and confidential

• Quick and inexpensive

• Informal and unstructured

• Parties control the process, make their own decisions and reach their own agreements (no third party decision maker)

• Negotiated agreements can be enforceable

• Can result in a win-win solution

5. COMMERCIAL LITIGATION (GOING TO COURT)

• Litigation is the use of the courts and civil justice system to resolve legal controversies.

• Litigation can be used to compel opposing party to participate in the solution.

• In general business people tend to avoid litigation in many instances.

• Litigation May be costly and time consuming, generate bad publicity and damage a trading relationship.

• A dispute arising of a commercial transaction may be heard in the HIGH COURT (Commercial Division)

• The purpose of the Commercial court is to provide a forum where there is familiarity with the commercial disputes and proceedings to enable them to be settled speedily and effectively without undue legal formality.

• The Court is staffed with specialist judges with particular expertise in commercial matters and adopt proceedings designed to make the courts more suitable to the needs of commerce.

CHARACTERISTIC OF LITIGATION

• Involuntary - a defendant must participate (no choice)

• Formal and structured rules of evidence and procedure

• Each party has the opportunity to present its evidence and argument and cross-examine the other side - there are procedural safeguards

• Public - court proceedings and records are open

• The decision is based on the law

• The decision can be final and binding

• Right of appeal exists

• Losing party may pay costs

BY-HK Mubiru 2020