The Alternative Way Of Resolving Disputes

Let’s say you end up in a business dispute. Whether it’s a simple dispute about payment or a highly technical case, you’d want to resolve this quickly.

- Ong Xiang Hong

While 99 per cent of disputes are easily resolvable, a more serious dispute will end up in litigation. But more and more businesses are opting to resolve their disputes via alternative dispute resolution (ADR).

ADR is a collective term for methods of resolving disputes without resorting to litigation in court. The most common types of ADR used in commercial disputes are mediation and arbitration.

Many standard contracts now stipulate some form of ADR as the principal form of dispute resolution. This is particularly common in contracts executed between companies located in different countries.

WHY NOT GO TO COURT?

ADR processes are generally quicker and cheaper than equivalent litigation. Court litigation is a long and drawn-out process, often involving enormous sums of money in complex cases. The rules of court that set out procedure can be inflexible, unsuited to SMEs that are used to business dealing in a flexible manner.

Hence, ADR is a popular alternative, especially for cross-border disputes. Parties can take more control of the process in ADR, for example in arbitration where they can choose the adjudicator. Mediation between parties can also lead to an understanding between the claimants, especially in the hands of a trained mediator. And details of ADR are normally kept private unlike court proceedings.