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CCCA_V5No1_Closing-FIN.qxd:CCCA_V1No2_BackPg-V1.qxd 2/1/11 11:29 PM Page 50 Closing The Deal The mixed blessings of arbitration Think the process will save you time and money? Better do your homework before going this route. s a large, multinational corporation, whether you choose arbitration in More and more we are inserting a ABombardier executes contracts in Canada, or under the auspices of an inter- mandatory ADR clause into our contracts many jurisdictions. Like any company, national body such as the International at Bombardier. One of the real benefits of there are times where disputes arise and Court of Arbitration (ICC) or London mandatory mediation is that it forces the decisions must be made as to how they are Court of International Arbitration parties to talk with each other, to have a best handled. (LCIA), as examples. dialogue, without anyone admitting any I am often asked by my fellow in-house Secondly, when weighing the pros and perceived weakness, since each side must counsel about my own experiences with cons, you’ve got to be mindful that there come to the table. arbitration, especially in the context of dis- will be no appeal. You will have to live This mandatory ADR can be undertak- putes in foreign jurisdictions.What are the with the decision, good or bad. Unlike lit- en before arbitration commences or alter- risks,benefits,and challenges of arbitration? igation, where sometimes a decision is natively, once the first brief has been Sometimes, there are very valid reasons overruled in a court of appeal, in arbitra- exchanged and your case has been fully to opt for arbitration. For example, your tion the reality is that you are stuck with laid out before the other party and you dispute would be heard in a foreign juris- the decision. It is final and there is no sec- can see the strengths and weakness of each diction, subject to foreign laws, and the ond chance. other’s cases. choice of arbitration may be helpful in Thirdly,the key to a successful process in In this scenario, essentially you put the bringing some balance to this situation. arbitration is choosing the panel; the qual- arbitration into neutral and set a time Or, due to the nature of a particular dis- ity of the panel will determine the quality frame,perhaps 30 to 60 days,so the dispute pute, you may want to have the benefit of of the process, the rulings along the way, does not drag on. I also recommend the secrecy that is part of the arbitration and ultimately, the decision. This means use of a single mediator to be cost-effec- process, which clearly would not be the that you need to devote the time to choose tive; that mediator should not be a person case if you opted for an open court. your representative carefully. sitting on the arbitration panel. This being said,and while there are pos- I believe that embedded ADR is worth sible benefits,I do want to say that our own Driving the process a try: If the mediation works, then you experience at Bombardier with arbitration One of the pitfalls in arbitration is that have come out a winner.That’s because a has been a mixed one. So, to my mind, while clearly you want the panel to be settlement means that you know what you there are pros and cons as to its value. impartial, you also want to have a panel are getting out of the dispute, as opposed that “intervenes” in a positive way, that is to arbitration and litigation which are so Quality of the panel pro-active. unpredictable. Should the mandatory Firstly, an often-held view is that you will I am talking about a panel that actually ADR not be successful, the option to save time and money by going to arbitration. adds value, as opposed to sitting and listen- move to arbitration can be undertaken. Our own experience shows that arbitra- ing to the parties and the motion and mak- Coming full circle, while there can be tion is not less expensive that going to ing a ruling.A panel that has “interaction” real merit in some situations in opting for open court. In fact, if you go to full arbi- with the parties, as a judge in open court arbitration, it’s important to do your tration or full litigation, there is generally sometimes does, can help drive the matter homework because arbitration is more little difference in cost, if at all. In terms of forward, possibly to settlement. complex than going to court and involves time, some arbitrations can actually run as As a way to offset and prepare for this more risk. long as if you had opted for open court in potential pitfall,in your arbitration clause it the national jurisdiction. is important to provide for mandatory Daniel Desjardins is senior vice-president PIERRE CHARBONEAU We have found this to be true from our alternate dispute resolution (ADR), as it is and general counsel at Bombardier Inc. perspective for arbitration generally, now in the court system in Canada. (danield@bombardier.com) 50 CCCA Canadian Corporate Counsel Association SPRING 2011