What’s the Difference Between Domestic and International ADR?

By Urs Martin Laeuchli, Mediator/Arbitrator

How does international Alternative Dispute Resolution (ADR) differ from domestic ADR? While domestic ADR provides an alternative to a court disposition, often times in international ADR, there is no ready court or law to turn to. Thus, ADR is even more important in international disputes. Also, while international arbitration is more established, international mediation may also be an ideal solution.

Domestic ADR parties enjoy the flexibility and lowered costs of mediation and arbitration, compared to litigation. In international disputes, these advantages are magnified. When international parties cross national boundaries, there are few reliable judicial bodies to adjudicate their disputes. There is also often mistrust towards national courts, and insecurity on which law, substantive or procedural, to apply. On top of these challenges, language, cross-cultural, and geographical distances exist. There is also a steep uphill battle in the enforcement of settled disputes on foreign turf, and run-away costs in international matters.

International arbitration, especially international commercial arbitration (ICA), as well as international mediation (IM), provide ready solutions for the above complications. While ICA has a longstanding tradition, IM is newer and less widespread. This might be somewhat surprising as IM, like ICA, has distinct advantages of saving costs, business relationships and retaining control over a successful outcome by avoiding filing a lawsuit in a foreign court. The foundational requirement of acting in good faith and trust are necessary, of course, to bring a mediation to fruition. However, where parties see the benefits of this and mobilize sufficient good will, IM may be the appropriate method.

What is thus needed in an international neutral? The fair-mindedness, honesty, impartiality, wisdom, and process management skills needed in a domestic case are required even more in an international case. In addition, knowledge of “international law” and the law of more than one legal system, multilingualism, cross-cultural sensitivity and understanding, and broad general knowledge are essential.

In sum, ADR is often even more necessary in the international context. In particular, international mediation, in addition to arbitration, can be an ideal solution for international parties.
Visit www.sfbar.org/mediation for more information about BASF’s Mediation Services.

 

Urs Laeuchli, an international arbitrator and mediator, is a fellow of the College of Commercial Arbitrators (CCA) and member of various international arbitrational panels. He joined the Bay Area Mediation Services of BASF panel in 2003.