legal action in global business

Just like in any other walk of life, disputes regularly occur between global companies and whether they are large or small, they need to be settled. There are several ways in which this can be achieved, but almost invariably, the parties involved will be looking to avoid lengthy, costly battles in court and will first look to find a more amicable solution.

So, how do major disputes get resolved in global business?

The Nature of the Beast: Assessing the Options

Having a clear understanding of the nature of the dispute and what possible solutions are available is the first consideration when dealing with a serious dispute. Expert legal counsel holds the key to ensuring the best course of action is taken, that no loopholes or tripwires can hamper the process and that the prospect of the dispute escalating is minimised.

Mediation and Arbitration

In the majority of cases, mediation will provide the quickest and least expensive way to resolve the dispute at hand. In mediation, a neutral third party is elected to reside over negotiations between the companies that are involved in the dispute.

The role of the mediator is simply to facilitate communications by relaying information and helping to outline options that may serve as a roadmap to resolution. Mediators don’t put forward opinions regarding fault or determine responsibilities for the dispute.

Mediation, however, is a relatively informal form of dispute resolution and sometimes the nature of the dispute calls for a more formal course of action.

If this is the case, arbitration may constitute the best way forward. The arbitration process involves, much like mediation, appointing a neutral third party such as a senior lawyer and this arbitrator will oversee the arbitration process. Here both parties will be given the opportunity to present their cases to the arbitrator and cross examination of evidence is allowed. The proceedings mirror those that would take place in a courtroom and at the end of it all, the arbitrator presents a ruling.

Both parties must adhere to the ruling which is legally binding and honoured in many countries around the world. This is where arbitration differs from conciliation that follows the same process, however, with conciliation, the ruling or recommendations are not legally binding.

Litigation

If the parties involved in the dispute are unwilling to enter into mediation, conciliation or arbitration, or are unhappy with the outcomes, then litigation in a court of law is the remaining option. This is likely to take time and be expensive, but ultimately, will result in a legally binding outcome.

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