Arbitration: Settling disputes without burning bridges

Don’t burn bridges. You’ll be surprised how many times you have to cross the same river. – H. Jackson Brown Jr.

Imagine dragging your friends or family members off to court every time you have a disagreement. You would most certainly do untold damage to your relationships in no time. Instead, it is more likely that you would call in a friend or family member that wasn’t involved in the conflict to help solve the problem. This is the function of arbitration in a trade context.

We definitely don’t call upon our lawyers for every minor personal relational grievance – and it isn’t necessary to do so for minor business disagreements either.

Arbitrators are independent individuals or professional bodies appointed to settle disputes. They aim to promote fairness and unity in business dealings, and help settle grievances without involving lawyers and courts. This means that you can settle disputes in a way that doesn’t damage your trade relationship with the other party. Arbitration is a key role of both local Chambers of Commerce (CoC), and the International Chamber of Commerce (ICC).

Protect yourself before engaging in trade

Before you decide to partake in any trade – local or international – you can ask your trade partner if they belong to their local CoC, and if not, whether they wouldn’t mind joining. This will help ensure that both of you are on the same page in terms of fair procedures for dealing with disputes should a misunderstanding arise. If the trade partner refuses to join their local CoC, heed this as a warning sign. A trading partner that refuses to join an organisation geared toward promoting fairness and unity in business dealings can quickly become a difficult opponent should they find cause for disagreement.

How arbitration works

Arbitration is a three-step process:

1. Assigning blame: The arbitrator must first decide which party is to blame for the perceived loss or broken business promise. They must also decide whether the blame is singular (one party’s fault), or proportional to the parties involved.
2. Restoring the relationship: After the guilty parties are identified, the arbitrator must help determine what can be done to help get the business relationship back on track.
3. Putting preventative measures in place: The arbitrator must assist the involved parties to determine what measures can be put in place to prevent a similar dispute from arising again.

Make the most of your CoC membership

To make sure that you benefit from the CoC’s policies, simply become a member of a local CoC and include the following statement in your correspondence and/or trading conditions:

“As members of the Chamber of Commerce, we accept the ICC arbitration rules regarding any disputes in our business transactions.”

If you are unhappy with the arbitration outcome, you can still choose to go to court. However, once you’ve resolved the dispute in partnership with your CoC using principles that promote fair business practice, court is a highly unlikely option.

Maintaining good business and trade relationships is fundamental to long-term business success. Our advice to you – don’t risk burning bridges and incurring exorbitant legal fees. Rather join your local CoC (or an international CoC if necessary) for a small fee, and reap the benefits of constructive dispute resolutions that preserve trade relationships.