A View From the Centre

by Peter Grove, published in the Advocate

Business Week Magazine reported last year that "Corporate executives think the high cost of civil justice is a drag on U.S. business and the economy. Fully 83% say their decisions are increasingly affected by the fear of lawsuits and a 62% majority say the legal system significantly hampers U.S. competitiveness?.An overwhelming 97% favour much more use of alternative methods to resolve disputes?".

In BC, there is currently a two year wait for a trial date, and it may take a full five to eight years to see a case through to the Court of Appeal. Options to litigation should be considered as part of a company's policy. The evidence is great that arbitration and mediation alternatives to litigation make good business sense and the inclusion of arbitration and mediation clauses in their contracts will help to ensure that disputes will be dealt with in a timely and cost effective way.

The British Columbia International Commercial Arbitration Centre provides the commercial community with the options it needs.

The Centre was established by the government of the Province of British Columbia in 1986 with additional funding from the Federal Government of Canada. It was part of the initiative of the public and private sectors to position Vancouver to become a leading Centre for international commerce and finance.

The Centre operates under The ICA Foundation of British Columbia, a non-profit foundation incorporated under the Society Act of B.C. The Foundation is managed by a Board of Trustees consisting of representatives from the commercial, legal and arbitration communities as well as named representatives from the British Columbia government, the UBC Law Faculty, and the Vancouver Board of Trade. Representation of the business community is essential to the composition of the Board.

The services provided by the Centre fall into five categories:

1. Information and advice on alternative dispute resolution and arbitral institutions.
2. Model contract clauses for future disputes.
3. Rules of procedure for arbitration, mediation and other dispute resolution methods.
4. Administering the infrastructure to ensure the smooth and efficient conduct of arbitrations and mediations.
5. The provision of skilled arbitrators and mediators from the panel certified by the Centre.

Some of the advantages in utilizing the Centre in a domestic or international dispute include the following:

1. The procedures are more flexible than litigation, staying within the control of the parties.
2. Litigation is expensive. Not only must lawyers' fees and disbursements be taken into account, but also the demand on management time for prolonged discoveries and review of documents. The Centre's rules provide for discovery, but they can be limited and expedited.
3. The litigation process can be lengthy and debilitating from a business viewpoint, pending the final resolve of the dispute which could take, depending on the nature of the dispute, 5 or more years through the appeal process. There is generally no appeal from the arbitration decision except for the correction of errors which are referred back to the arbitrator(s).
4. The process under the Centre's rules is confidential. The extent to which any publicity is granted is entirely within the control of the parties and the arbitrator(s).
5. The parties are free to choose their own arbitrator(s) failing which the Centre has a list of panel members who are recommended to each side and who are selected on the basis of their expertise in the area in question. If there is a failure of each side to select an arbitrator(s), under the Centre rules the arbitrator(s) is then appointed by the Centre.
6. The Centre has a Panel of commercial arbitrators and mediators who range from judges to senior lawyers, accountants, appraisers, architects and engineers.
7. The arbitrator(s) has general jurisdiction over the proceedings, and is not bound by the Rules of Court, to allow the parties to present with equity and fairness their position to the neutral. The arbitrator(s) must decide the dispute in accordance with the law governing the dispute.
8. The award of the arbitrator(s) in British Columbia must be made no later than 60 days after the closure of the arbitration hearings thus avoiding delays.
9. The award to the arbitrator(s) is final and binding and may, under section 29 of the Act, be enforced as an order of the Court. This brings certainty to the proceedings, so often sought by the business community.
10. All of the above factors can aid and assist in the preservation of a healthy and continuing commercial relationship between the parties. The proceedings are normally not as adversarial as those found in court and, if counsel approaches the proceedings with the "arbitral spirit" as well as the parties themselves, a continuing relationship is the likely outcome.

Arbitration

All disputes arising out of or in connection with this contract, or in respect of any legal relationship associated therewith or derived therefrom, shall be referred to and finally resolved by arbitration administered by the British Columbia International Commercial Arbitration Centre pursuant to its Rules.

The place of arbitration shall be Vancouver, British Columbia, Canada.

The parties agree to attempt to resolve all disputes arising out of or in connection with this contract, or in respect of any legal relationship associated with it or from it, by mediated negotiation with the assistance of a neutral person appointed by the British Columbia International Commercial Arbitration Centre administered under its Mediation Rules.

By adding the following additional paragraph to the mediation clause, a combination of the two processes may be achieved:

If the dispute cannot be settled within 30 days after the mediator has been appointed, or such other period agreed to in writing by the parties, the dispute shall be referred to and finally resolved by arbitration administered by the British Columbia International Commercial Arbitration Centre, pursuant to its Rules.

Our Centre has its own progressive institutional rules which embrace the substance of the arbitration rules that the UN Commission on International Trade Law (UNICTRAL) adopted in 1976 for the settlement of international disputes. The Centre may also be used for arbitrations under any set of procedural rules. Our foreign clients can retain their own legal counsel or advocates whether or not they are licensed to practise in British Columbia.

Litigation in the courts of one's own country is expensive, time consuming and unpredictable; litigation in foreign courts is generally more so. Domestic courts may not readily enforce judgment from foreign courts. It is natural that parties to international contracts will distrust the national courts of the other contracting party, abhor the costs and delays associated with litigation and lament the breakdown in business relationships often caused by the polarization engendered in the litigation process.

The arbitral process is generally less coercive and invasive than litigation with comparatively little discovery and pre-hearing proceedings. It is usually more flexible and adaptable to the needs of the parties and the individual dispute. Arbitral proceedings and awards are confidential. Selection of knowledgeable neutrals can be made by the parties themselves. Delays and costs to the parties are less. Parties have control over the language, timing and the location of the arbitration. The decisions of the arbitrator are final and binding which reduces uncertainty. The awards are enforceable in each of the countries involved. The process can be as expeditious and as efficient as the disputants make it.

Parties to an international contract can ensure that their disputes will be dealt with through arbitration rather than litigation by including the following model clause in their contracts:

All disputes arising out of or in connection with this contract, or in respect of any defined legal relationship associated therewith or derived therefrom, shall be referred to and finally resolved by arbitration under the rules of the British Columbia International Commercial Arbitration Centre. The appointing authority shall be the British Columbia International Commercial Arbitration Centre. The case shall be administered by the British Columbia International Commercial Arbitration Centre in accordance with its "Procedures for Cases under the BCICAC Rules". The place of arbitration shall be Vancouver, British Columbia, Canada.

Business is about developing relationships. Successful business is based upon ongoing and healthy interaction between buyers, sellers and suppliers, and between professionals and their clients. Disputes will occur. Disputes, properly dealt with, can be healthy and beneficial to those involved resulting in better products and services. Disputes need to be dealt with in ways which will allow the relationships to flourish.

The Alternative Dispute Resolution services provided by the Centre will continue to play an ever increasing role in the healthy continuing growth of our economy.