Jonas PustMulti-Tiered Dispute Resolution Clauses

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Businesses operate in an increasingly complex and dynamic environment, while the time available to make decisions and manage contractual cooperations is effectively decreasing. Utilising Alternative Dispute Resolution in handling disputes has become increasingly popular. They aim at shaping dispute resolution processes and avoiding lengthy and complicated litigation or arbitration. In order to create an effective dispute resolution, a sensible combination of proceedings is necessary. It must meet the specific requirements of parties and their respective contracts. Multi-Tiered Dispute Resolution Clauses are the attempt to develop dispute resolution mechanisms individualised for the special needs of respective parties.

The book Multi-Tiered Dispute Resolution Clauses provides an analysis of such clauses in individually negotiated business to business contracts and the arising legal consequences in Germany. Understanding the interaction between the set out proceedings and potential problems is of utmost importance. Without such understanding, the attempted simplification of dispute resolution might foreclose the substantive claim itself, or lead to excessive litigation about the understanding of clauses.

The author outlines the possibilities to stipulate a right or an obligation and the legal concepts making the decision effective. Even if parties agreed upon Alternative Dispute Resolution, the willingness to conduct these might have disappeared over time or after the rise of a dispute. The emerging conflict might even have resulted in further negative experiences. In the event a claiming party, nevertheless, insists on conducting proceedings, the binding force of the clause is at question. Different solutions are depicted, which also call into question the current prevailing practice of German courts.

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