Alternative Dispute Resolution

305 Pages·2011·1.34 MB·English

Alternative Dispute Resolution

Teaching Material

Developed By:

1) Tefera Eshetu
2) Mulugeta Getu

Sponsored by the Justice and Legal System Research Institute

2009

Table of Contents

Course Introduction…………………………………………………………………………1

Chapter One: General Overview of ADR………………………………………………….3

1.1. Introduction ……………………………………………………………….................3
1.2. Definition; what is Alternative dispute resolution? …………………………………4
1.3. Historical Development of ADR …………………………………………………….6
1.4. Purposes of ADR ………………….………………………………………………..17
1.5. Demerits of (short comings) of Litigation ………………………………………….20
1.6. Demerits of ADR …………………………………………………………………...23
1.7. Summary …………………………………………………………………………….24

Chapter Two: Types of ADR and their proceeding …………………………………………26
2.1. Introduction …………………………………………………………………………26
2.2 Types of ADR ……………………………………………………………………….27
2.3 Negotiation ……………………………………………………………..…………...30
2.3.1 Primary consideration of negotiation ……………………………………..30
2.3.1.1 When is negotiation appropriate Dispute resolution? …………..31
2.3.1.2 Nature of bargaining power ……………………….……………31
2.3.1.2.1 Element affecting of bargaining power ……………………...32
2.3.2 Perceived advantages of negotiation …………………………………….36
2.3.3 Perceived disadvantages of negotiations...……………………………….36
2.3.4 Legal effects of negotiation agreement ………………………………….37
2.4 Mediation /Conciliation ……………………………………………………………38
2.4.1 Meaning of mediation /Conciliation …………………………………….38
2.4.2 Features of mediation /Conciliation ………………………..……………39
2.4.3 Perceived advantages of mediation ……………………………………..40
2.4.4 Perceived disadvantages of mediation ………………………………….40
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2.4.5 Mediation proceedings and the roles of mediator(s) …………………....40
2.4.6 The roles of lawyers in mediation …………………………………………..44
2.4.7 Legal effects of mediated agreement ……………………………………….45
2.5 Arbitration ………………………………………………………………………….....45
2.5.1 What is Arbitration? ………………………………………………..……….46
2.5.2 Early History of Arbitration ………………………………………………... 47
2.5.3 Preliminary Considerations of Arbitration ………………………….……… 50
2.5.3.1 Arbitrability……………………………………………………….....50
2.5.3.2 Arbitration agreement. …………………………………….……..…51
2.5.4 Varieties of Arbitrations………………………………………..……….…....55
2.5.5 Arbitration and litigation ……………………………………………………..56
2.5.6. Perceived Advantages ………………………………………..………….…..57
2.5.7 Perceived disadvantages …………………………………….……………….57
2.5.8 The Role of Arbitrator ……………………………………..………………...58
2.5.8.1 Impartiality of arbitrator …………………………………………….58
2.5.8.2 Independency of arbitrator ………………………………………….61
2.5.9 Arbitration Procedure ………………………………………………………..62
2.5.9.1 Formation of Arbitral Tribunals ……………………………………62
2.5.9.2 Arbitral Proceedings in general …………………………………… 65
2.5.10. Legal effects of Arbitration ……………………………………………….. 70
2.5.10.1 Arbitral award …………………………………………………… 71
2.6. Summary ………………………………………………………………………74

Chapter Three: ADR in Ethiopia ………………………………………………………….76
3.1. Introduction …………………………………………………………………………76
3.2. Historical Background ………………………………………………………………77
3.3. Constitutionality of ADR ……………………………………………………………80
3.4. Customary ways of Dispute Settlement ………….………………………………….83
3.4.1. Common characteristics of customary dispute settlement …………. ………...84
3.4.2. Customary dispute settlement of some specific ethnic groups ………………..89
3.5. Compromise in General ……………………………………………………..............97
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3.5.1. Definitions …………………………………………………………………..97
3.5.2. Nature and effect of Compromise …………………………….…………….98
3.5.3. Compromise before a Court of law …………………………..……………..99
3.6. Conciliation …………………………………………………………...…………..101
3.6.1. Preliminary Points ………………………………………………..…………101
3.6.2. Conciliators …………………………………………………….…………...102
3.6.3. Effects of Conciliation ……………………………………….…………….105
3.7. Arbitration ……………………………………………………………...…..……106
3.7.1. Introduction ………………………………………………….……………106
3.7.2. Sources of Arbitration and Arbitral Submission ………………....……….108
3.7.3. Arbitrators ………………………………………………………..……….123
3.7.4. Scope of Arbitration …………………………………………..………….156
3.7.5. Arbitration Proceedings ………………………………....…….………….174
3.7.6. Arbitral Award ……………………………………………….…………..174
3.7.7. Institutionalized Practice in Ethiopia …………………………….………177
3.7.7.1. Ethiopian Arbitration and Conciliation Centre (EACC) ……….178
3.7.7.2. Addis Ababa Chamber Commerce and Sectorial Association Arbitration
Centre ……………………………………………………….…192
3.8. ADR in other Laws ……………………………………………………….….…201
3.8.1. Arbitration in Family Law ………………………………………………..201
3.8.1.1. Introduction ………………………………………….………....201
3.8.1.2 Kinds of Family Disputes Governed By ADR ………..………..203
3.8.1.3. Appointments and Removal of Third Party .………….…….….205
3.8.1.4. Powers and Duties of Third Party …….…………………….….206
3.8.1.5. Procedure ……………………………………………………….207
3.8.1.6. Outcomes and enforcement of the proceeding ………...……….208
3.8.2. ADR in Labour Law …………………………………………..………….209
3.8.2.1. Introduction ………………………………………….…............209
3.8.2.2. Conciliation …………………………………….……...……….210
3.8.2.3. Arbitration …………………………………..………………….213
3.8.2.4. Labour Relation Board …………………………………………215
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3.8.3. Arbitration under Insurance Law ………………………………………..217
3.8.3.1. Introduction ……………………………………………………217
3.8.3.2. Kinds of ADR Recognized in Insurance ………………………217
3.8.3.3. Insurance Matters Which Could Be Taken to ADR. ………….219
3.8.3.4. Parties’ Rights to waive their Right to institute 1st
Instance substantive litigation …………………………………223
3.9. Summary ………………………………………………………………………228

Chapter Four: ADR in International and Regional Level …………………………229
4.1. Introduction ……………………………………………………………….229
4.2. The need for ADR in International disputes ……………………….……..230
4.3. Scope and Parties to International ADR ………………………..………...236
4.4. International Documents and Organs Regulating ADR …….…………….240
4.4.1. New York Convention on the Recognition and Enforcement of
Foreign Arbitral Award, 1958 ………………………………….241
4.4.2. Convention for the Pacific Settlement of International Disputes
(1899 and 1907) and the Permanent Court of Arbitration (PCA) …245
4.4.3. UNCITRAL Documents ……………………………………….…. 256
4.4.4. International Chamber of Commerce (ICC) and the International
Court of Arbitration ……………………………………….……… 263
4.5. ADR in Regional Level ………………………………………….………….. 269
4.5.1. Europe ……………………………………………..……………… 269
4.5.2. America (NAFTA) ……………………………..…………………. 275
4.5.3. Africa ………………………………………..……………………. 281
4.6. Ethiopia’s Approach to International ADR ………………………………… 292
4.7. Summary ………………………………………………………………….… 296

References…………………………………………………………………………………298

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Course Introduction

Dispute is indispensable part of societal interaction since the inception of human
settlement. If it is not well taken and resolved early, dispute between two individuals will
grow up and become treat to national security, peace and stability, which are the basic
parameter to measure the development of a nation. With the objective of settling dispute
in a more justifiable manner, national governments and the constitutions of most nations
establish institutions; judiciary organs of the government. It is the natural mandate of
courts of law to entertain disputes. Other than judiciary arm of the government, the
necessity of establishing other tribunals with judicial power has been felt long ago. With
in the executive arm of the government, quasi judicial tribunals named otherwise as
administrative tribunals have been establish to settle disputes. Courts and administrative
tribunals are public institutions established to resolve disputes.

But before the establishment of courts and administrative tribunals, and even after their
establishment, there have been other private tribunals by which the society is trying to
settle disputes. These are called Alternative Dispute Resolution (ADR) mechanisms.
ADR doesn‘t refer a single kind of mechanism, but it is a generic name to refer dispute
settlement mechanisms other than court and administrative tribunals. Arbitration,
Conciliation, Mediation, Negotiation and Mini- Trial are some of them which are referred
as ADR.

This two credit hours course will try to bring in to your attention the issues surrounding
ADR. With a view of making a systematic study of the subject matter the material is
divided in to four chapters. The first chapter is devoted for a general understanding of the
subject ADR. In doing so, the meaning and the concept, historical developments,
advantage and disadvantage of ADR and similarly court litigation will be best assessed.

Though we call generally as ADR, it contains different kinds of dispute settlement
devises. The second chapter will look all the widely known ADRs. It starts by looking the
basic characteristics of these different kinds and a very close discussion will be made on
the three widely used ADR; Arbitration, Mediation/Conciliation and Negotiation.

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The third chapter is exclusively devoted for the experience of ADR under Ethiopian legal
regime. The historical background of ADR in Ethiopia and its constitutionality comes
first. Under the existing Ethiopian legislations, there are different provisions put through
out of its legislation regulating the matter. Compromise in general, conciliation and
arbitration in general and specifically under family, labour and insurance law will be
assessed. The practice of institutionalized ADR under the Ethiopian legal regime will be
seen in this chapter.

Lastly, the documents which deal with ADR and institutions practicing ADR in
international level will be seen. Through there are lots of such kinds of institutions and
documents, only few of them will be seen as an example, like International Chamber of
Commerce (ICC) and International Court of Arbitration (ICA), the 1948 New York
Convention, the 1899 and the 1907 Convention that have established Permanent Court of
Arbitration (PCA) and the documents under UNCITRAL will be explored. The place of
ADR under regional documents of Europe, North America and Africa, and the approach
taken by the Ethiopian legal system to these international and regional documents will be
discussed at last.

There will be questions which the students will be expected to answer for a better
understanding of the subject. We have tried to incorporate real and hypothetical cases to
support the discussions made there under. Provisions related to ADR from the
Constitution, Civil Code, Civil Procedure Code (Civ. Pr. C.), Family Code and Labour
Proclamation No 377/2003 have been thoroughly analyzed.

As long as the objectives set in each chapter is not defeated, the instructor of the course
can use any materials, cases and documents other than listed at the end of the material.

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Chapter One
General Overview of ADR

1.1. Introduction

The provision of effective dispute resolution is the core concern of domestic as well as
international legal system. The aim of devising mechanisms to afford effective dispute
resolution is to ensure that disputes are solved through effective and efficient means for
the benefits of the disputants and the society in general. So as to attain this core objective,
states and the international community have been searching various ways of resolving
dispute than insisting on the traditional way of resolving dispute through court litigation
which is mostly ineffective and inefficient.

Now days, therefore, Alternative Dispute resolution has got wide acceptance to resolve
dispute due to its perceived advantages. Needless to say, even court officials, who used to
consider ADR as taking of court power, recognized the need of ADR as a choice to settle
dispute. Pre-trial conference and compulsory (court ordered) arbitration might be an
indication for this.

Alternative Dispute Resolution is a generic term used to describe a range of procedures
designed to provide ways to resolving a dispute as an alternative to court procedures.
ADR had been used by human society since ancient times though it gets wide acceptance
and recognition in countries‘ laws recently. ADR methods, in comparison with court
litigation, have various advantages though it is not free from different short comings. In
this chapter issues in relation with the meaning of ADR, its historical development, its
comparative advantages and disadvantages will be dealt. The short comings of court
litigation also enumerated to show the rampant problems of litigation.

Chapter Objectives

At the end of this chapter students will be able to;
 Define what Alternative Dispute Resolution mean;
 Appreciate the difference between conflict and dispute;
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 Know historical development of ADR;
 Identify the advantages of ADR in comparison with formal litigation;
 Realize the demerits of ADR;
 Demarcate the scope of application of ADR in Dispute settlement mechanisms.

1.2. Definition; What is Alternative Dispute Resolution?

ADR is composed o f different words: Alternative, dispute and resolution. Thus to clearly
understand or define the phrase it is paramount important to understand each words
separately thereof. And then what ‗Alternative‘ connotes to you? What about dispute? Is
a dispute synonymous with conflict? What about resolution?

The word ‗Alternative ‗, as to the definition given in 6th edition of Oxford Advanced
Learners Dictionary, refers ―a thing that you can choose to or have out of two or more
possibilities.‖

Therefore the word in this context is used as an adjective and refers to all permitted
dispute resolution mechanisms other than litigation, be it in court or administrative
tribunal . Whereas, the phrase dispute resolution, in the absence of alternative as prefix, is
simply a collection of procedures intended to prevent, manage or resolve disputes and
refers procedures ranges from self-help in the form of negotiation through to state
sanctioned mechanisms called litigation. It is to mean that ‗Alternative‘ connotes the
existence of dispute settling mechanisms other than formal litigation. Though the word
‗Alternative‘ in ADR seems to connote the normal or standard nature of dispute
resolution by litigation and aberrant or deviant nature of other means of dispute
resolution mechanisms, it is not really the case. ADR is not an alternative to the court
system but only meant to supplement the same aiming on less lawyering.

Now days there are arguments that ADR does not include arbitration and the proponent
of this position say that alternative Dispute resolution encompasses various amicable
dispute resolutions other than Litigation in court and arbitration. Indeed ADR Rules of
The international Chamber of Commerce follows this approach. The preamble of the
same rule reads as:
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