- Disputes and hostilities are regrettably a part of life and more so a part of commercial and business interactions. Many disputes can be foreseen / foreshadowed if one knows what to look for and when, but whether foreseen or not, once they arise, can in many instances be managed with a view to avoiding litigation. In this newsletter for “litigation” read arbitration as well.
. - It does however take skill and a huge amount of experience to foreshadow pending litigation (save in the most obvious circumstances) and it takes great skill, commitment and time to manage a dispute with a view to avoiding litigation. Quite frankly very few business persons have those skills and where they do, they are almost always subservient to their subjective perspective as well as their relationship with their employer – even if that relationship entails being a board member.
. - This raises three aspects, namely (1) the ability to anticipate disputes and perhaps even litigation (2) the ability to manage same to avoid the litigation wherever possible and practicable and (3) if all else fails how best to undertake and manage the litigation itself.
. - The global economy and the businesses that participate therein have for the last few decades recognised the value of an alternate dispute resolution (“ADR“) process, but it is only in the last 10 years or so that the ADR concept has developed into a recognised industry. A number of centres throughout the world – Singapore, Dubai, London and Shanghai (to name a few) are setting themselves up as arbitration centres in which the ability to have disputes determined in an efficient and (relatively) user-friendly environment is becoming more popular. There are many reasons therefore and it is not the purpose of this newsletter to motivate same; suffice to record that millions of businesses throughout the world – many important businesses as well – and policymakers, recognise this to be the case.
. - Professor Mervyn King – a well-known South African lawyer – has stated that :-”
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I have been an advocate, a Judge, a chairman of listed companies, a chief executive of listed companies and am a recognised expert on corporate governance. In order for directors to discharge their duty of care to a company they have to ensure that a company has an adequate and effective dispute resolution clause in their customer, employee and supply contracts. It’s in the best interests of the company that disputes are resolved with its stakeholders as expeditiously and efficiently as possible as well as being cost-effective. In a world of radical transparency and the unimaginable connectivity of things, ADR has become critical.”
. - Brian Kahn Inc. (“BKI“) has for decades advocated that our clients should provide that – as a term of their doing business with third parties – disputes are resolved not by way of court proceedings but by way of a two or three tier process – namely (1) without prejudice negotiations involving senior executives who are not the persons whose decisions and/or conduct are being challenged or questioned, and if that is unsuccessful (2) mediation – sometimes binding but other times non-binding – and as a last resort (3) arbitration. This process can be built into any relationship with any person with whom you do business – whether via a formal agreement or not.
. - Indeed there are instances where companies are not prepared to do business with third parties unless those third parties are prepared to commit to an ADR process in resolving disputes. The advantages are many including (1) certainty being achieved sooner rather than later (2) a saving of executive and other employees time and (3) in the long run, costs.
. - If you want to discuss any matter referred to herein, please contact Brian Kahn on brian@briankahn.co.za to schedule an appointment to discuss matters
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Please feel free to contact Brian Kahn for further information or specific and detailed advice. Errors and omissions excepted (E&OE)