Resolving Corporate Disputes through ADR

When diverse individuals come together, disputes will certainly arise.  If not handled well, conflicts can trigger company downfall.

Corporate disputes pose challenges that may involve complex procedures distinct to such kind of disputes. But identifying the cause of the conflict, understanding the needs and objectives of the corporation and resolving the dispute in a most appropriate and effective method are common ways of addressing any kind of dispute in any organization or group.

To maintain harmonious relationship and preserve the ongoing business, alternative dispute resolution is regularly employed to resolve conflicts. This is resorted to in order to avoid protracted litigation which can be costly and time-consuming.

Most common business disputes involve breach of warranty, shareholder’s disputes, claims, winding up or dissolution, board disputes, actions against directors, unfair competition, stock disputes, minority owner’s right, corporate deadlock disputes, shareholder appraisal rights and others.

Alternative Dispute Resolutions

Court action is not the sole answer to any business dispute. Alternative dispute resolution (ADR) corresponds to various processes that potential litigants may use to resolve conflicts.  It involves outside court resolution with the participation of a third party. It typically involves evaluation, negotiation, mediation, conciliation and arbitration.

Conciliation

Conciliation is an alternative dispute resolution whereby disputing litigants agree to seek the aid of a conciliator. The conciliator then meets the parties to the dispute in order to resolve their differences. A conciliator interprets issues, provides technical assistance, improves communications between the parties and explores potential solution.

Mediation

In mediation, mediators aim to assist disputing parties in reaching an agreement. In this process, it is the parties that determine the conditions of any settlements reached instead of accepting something imposed by the mediator.

Arbitration

Arbitration is an outside court technique of putting an end to a conflict. The parties refer the dispute to an arbitrator, arbiter or arbitral tribunal by whose decision they agree to be bound. The arbitrator reviews the case and makes an assessment of the dispute. The decision of the arbitrator is legally binding between the disputing parties.

Court litigation is not the ultimate answer to any dispute. Alternative dispute resolution can be the solution to a specific problem. ADR is cost efficient, fast, confidential and no jury involvement. However, resolution is not guaranteed. When ARD fails, participation of the defendant can be perceived as weakness. In case of arbitration, the decision of the arbitrator is not appealable.

In case of disputes, parties can submit to ADR such as conciliation, arbitration and mediation. Parties can consult employment lawyers if they want to resolve their business disputes outside of court.