Organisations, particularly corporate bodies, have been asked to avoid litigation as much as possible due to its adverse effects.
Rather, organisations should pursue arbitration to settle all forms of internal and external disputes.
Patrick Seddoh, a legal practitioner and ADR consultant, who gave the advice, described litigation, in all forms, whether between management and employees, or company and its clients, as “unproductive,” and should be avoided at all times.
“Arbitration is an essential aspect of Appropriate Dispute Resolution (ADR), much like litigation, it is legally binding but comes with much more benefits than litigation,” he said.
Addressing a class of mediation trainees at the Gamey and Gamey Academy of Mediation, Mr. Seddoh, who is also a labour expert, said because arbitration guarantees mutual settlement of disputes, it would be better for businesses to settle their disputes through arbitration so as to maintain relationships.
According to him, litigation using the courts often ends with broken relationships amidst time wasting, high legal fees and other costs to both parties, irrespective of which side wins the case. Companies also lose their clients and business during and after the litigation.
“Unlike litigation where the end of the case often leaves both sides more aggrieved and hostile at each other, arbitration allows both parties to talk out their differences, so when the issue is settled in a mutually acceptable manner, both parties would not habour any misgivings,” he said.
He said as a mechanism of ADR, arbitration is not based on rights but the interests of the parties that have to be addressed.
“Most organizations, especially in Europe and Asia prefer Appropriate Dispute Resolution be it mediation, negotiation or arbitration because of its flexibility and non costly process in resolving business conflicts,” he added.
To ensure the effective use of arbitration to settle disputes, he said organisations need to include arbitration clauses in all contracts, particularly commercial and employment contracts.
“It is important to have an arbitration clause in all these contracts so in an event that a dispute arises the parties can conveniently activate that clause and have the dispute resolved,” he noted.
He explained that the Labour Act, 2003 (Act 651) is in tandem with the ADR Act, 2010 (Act 798) in ensuring that arbitration serves as an effective process of resolving disputes.