Special Services and Dispute Prevention
1. Minitrial
The parties will attempt to resolve any dispute arising out of or relating to this Agreement in accordance with the CPR Minitrial Procedure [currently in effect OR in effect on the date of this Agreement] and will enter into an initiating agreement in the form annexed to such Procedure.
2. Early Neutral Evaluation
At the request of either party, the parties submit the dispute between them to Early Neutral Evaluation. The Early Neutral Evaluator shall be appointed through the International Institute for Conflict Prevention & Resolution.
3. Dispute Resolution Boards (DRBs)
Model Clauses for CPR Rules for Administered Dispute Prevention and Management Boards for Commercial Transactions.
CPR’s Rules for Administered Dispute Prevention and Management Boards for Commercial Transactions may be adopted by the parties by using the following provisions:
A: Pre-Dispute Clause for Administered Dispute Prevention and Management Boards for Commercial Transactions
“CPR Rules for Administered Dispute Prevention and Management Boards for Commercial Transactions Adopted. The parties hereby adopt the CPR Rules for Administered Dispute Prevention and Management Boards (“DP&M Board Rules”). The purpose of this Dispute Prevention and Management Board for Commercial Transactions (“Board”) process is primarily to assist in the prevention and mitigation of disruption as a result of events arising between the parties to this Agreement or stemming from external events that affect the relationship between the parties or that affect the timely completion of the Endeavor. Endeavor shall be understood to encompass the entire scope of the venture, enterprise, project, or transaction under the Agreement; the intent is to encompass as broadly as possible the realization of the objective of the commercial transaction or the relationship of the parties under the Agreement. As used in this Section, the term “Agreement” is understood to mean the agreement between the parties establishing the rights and responsibilities of each party to jointly participate in this commercial Endeavor. The intent of the establishment of the Board is to facilitate contemporaneous agreement as to the resolution of unanticipated issues occurring during the progress of the work over the course of this Agreement by providing recommendations to the parties, and if resolution cannot be quickly reached, then to fairly and impartially consider disputes placed before it and to provide written recommendations for resolution of these disputes to both parties.
Unless the parties agree otherwise in writing, all written recommendations of the Board are provisionally binding on the parties during the term of the Agreement; provided, however, that if one party gives timely (within 15 days of receiving the written recommendation) written notice of its objection to the recommendation it shall become non-binding on the parties at the termination of the Agreement, and shall be subject to binding arbitration at the termination of the Agreement under the appropriate CPR Administered Arbitration Rules then in effect. To the extent no timely written notice of objection is made to the recommendations of the Board, the recommendation shall be deemed mutually accepted by the parties and become final and binding during the term of the Endeavor and may not be challenged in arbitration thereafter. Any issue of noncompliance with mutually accepted written recommendations by the parties may be referred to arbitration as provided below. If the parties so desire, a recommendation may be embodied in a Consent Award through the Arbitration process, provided that a sole arbitrator will be selected. Submission of a disputed matter to the Board by a party for discussion at a regular meeting of the Board over the course of the Agreement, is a condition precedent to that party filing suit or to filing a demand for arbitration at any point in time with regard to that specific disputed matter.
CPR Arbitration Rules Adopted. The CPR Rules for [Administered Arbitration][Administered Arbitration of International Disputes], are hereby adopted and incorporated by reference into the Agreement.
Any dispute arising out of or relating to the Agreement, including the breach, termination or validity thereof, not finally resolved by the DP&M Board Rules, shall be finally resolved by arbitration in accordance with the [CPR Rules for Administered Arbitration][as supplemented and modified by the CPR Fast Track Rules for Administered Arbitration][CPR Rules for Administered Arbitration of International Disputes ] [as supplemented and modified by the CPR Fast Track Rules for Administered Arbitration of International Disputes] (the “Arbitration Rules”) by [a sole arbitrator] [three arbitrators] (“Tribunal”). The arbitral Tribunal, and not the court, shall have primary responsibility to hear and determine challenges to the jurisdiction of the arbitral Tribunal. [Subject to any extension granted under the Fast Track Rules, the arbitration shall be conducted in accordance with a procedural timetable providing for the delivery of an award [within ____ days after the constitution of the Tribunal] [as provided in the Arbitration Rules]]. Judgment upon the award rendered by the Tribunal may be entered by any court having jurisdiction thereof. The seat of the arbitration shall be (city, country).”
B. Optional Clause (to be used with above clause) Limiting Application of Fast Track Arbitration Rules To Claims Below a Financial Threshold
“Provided, however, that where the stated amount of the claim or counterclaim does not exceed [specify amount] exclusive of interest or costs under Rule 19 of the Administered Rules, the [CPR Fast Track Rules][CPR Fast Track Rules for Administered Arbitration of International Disputes] shall apply to supplement and modify the CPR Arbitration Rules. Furthermore, subject to any extension granted under Rule 4.5 of the Fast Track Rules, the arbitration shall be conducted in accordance with a procedural timetable providing for the delivery of an award [within ____ days after the constitution of the Tribunal] [as provided in the Fast Track Rules].”
4. Dispute Prevention Provisions
Note:
Despite the general acceptance of alternative dispute resolution provisions in contractual arrangements, to date, there has been little attention given to contractual dispute prevention protocols. In an effort to shift the paradigm, CPR has developed Model Dispute Prevention and Resolution provisions, which parties can modify to utilize in their business arrangements. The primary goals of the model provisions are to establish a framework to identify potential conflicts early and to implement dispute prevention mechanisms to avoid the conflict turning into a value-depleting dispute.
On the CPR website, you can find a memo describing the Model Dispute Prevention and Resolution provisions, a term sheet that outlines the nature of the provisions and three model agreements for a “Standing Neutral,” “Standby Neutral” and “No Neutral” provisions. For full commentary on these provisions, please consult the document in the “related” section.