Dispute resolution and socially sanctioned choices in any culture, nurtures people's ideals, self-perceptions, and the quality of their relationships with others in the society. These methods indicates whether individuals with-in the society avoid, incentivize or suppress the conflicts or whether they chose to resolve their disputes amicably. Ultimately, the most fundamental values emerges from the dispute resolution methods that the society prefers.
Efforts to promote social peace and equal access to justice in different parts of modern societies has resulted in the creation and development of methods for the amicable settlement of disputes and legal reforms in this regard.
In this context, many countries determined that the heavy workload that the courts are trying to overcome; the excessive time and money spent in the courts, the rapidly increasing population density and the many conflicts that arises from technological and industrial developments, are more easily resolved by out-of-court methods in a reactive state with combative procedural systems and horizontal authority. This situation incentivized individuals to develop alternative methods in order to solve their disputes without the interference of authorities.
Alternative Dispute resolution methods have been criticized by a vast variety of academicians through the years. Main emphasize in these critical approaches arises from the failure to ensure the cost effectiveness of the legal procedure and exiguousness of judicial organs in terms of appeals and reparations.1 However, according to today's dominant view, alternative dispute resolution methods does not compete with or challenge the state judicial proceedings while ensuring the existence of an alternative to the time consuming and overwhelming litigation procedure. The term alternative dispute resolution is generally understood as the assistance of an impartial third party instead of a state court. The word "alternative" in alternative dispute resolution methods also carries different meanings such as friendly, amicably and appropriate in this respect. Also in addition to these misconceptions, arbitral proceedings aims to ensure the speed of the legal proceedings so that the parties can reach their goals in a more cost effective and confidential manner.2
Since court proceedings mainly focuses on the outcome, the "verdict" will not always end the disputes, nor can it prevent the emergence of future disputes. The main goal with alternative dispute resolution methods is the resolution of the dispute. Likewise, "dispute" refers to a conflict that arises in case of an existence, scope and use of a right or interest. In case of conflict of rights and interests, if these conflicts are not resolved or violations cannot be prevented, unfortunately a conflict arises. The solution is to dissolve the disputes in a way that satisfies both of the parties and preventing future conflicts that might arise while doing so.
Using Alternative dispute resolution methods replaces contestation with settlement, enforcement of rights with effectiveness and language of law with daily language and coercion with persuasion. The key components of Alternative dispute resolution methods are; voluntary participation, confidentiality, parties' satisfaction with the dispute resolution, and a win-win result, where the will of the parties to the dispute in managing the process is at the forefront, and if the parties are not satisfied, the state litigation path is not closed.3
The most well-known alternative dispute resolution methods are negotiation, mediation and conciliation. While there are opinions that accept arbitration as an alternative dispute resolution method, there are also opinions that accept it as an exceptional remedy. Many supporters of this opinion also criticizes the arbitral proceedings by pointing out the lack of written decisions and judicial authorities. In addition to these points, many argue that the results obtained from the arbitral proceedings are somewhat unfair due to self-centered motivation of the individuals, frequent dispersement of evidences and other procedures that would not occur in a court due to direct state interference.4 On that note, when dispute resolution methods are examined in general, a binary distinction can be made between the dispute resolution methods that include a "trial process" and the dispute resolution methods that are conducted without such a trial process. According to this distinction, the trial will be carried out either by the state (courts) or by arbitration. In other words, the issue that distinguishes arbitration from alternative dispute resolution methods and allows it to be accepted as an "exceptional judicial remedy" is that the concept of arbitration also has a judicial function.5
The settlement method in which the dispute between the parties is resolved by persons called "arbitrators" instead of state courts is called "arbitration". Arbitration is a judicial procedure based on the free will of the parties in accordance with national and international regulations.6In this context, parties that have a dispute eligible for arbitration can choose the number of arbitrator/s, their qualifications, their method of election and the place of arbitration via the arbitration clause that exists in the original contract executed by the parties or by an additional arbitration agreement.7 In addition to these selections, parties can also determine the law to be applied to the arbitration agreement and its procedure, the substantive law to be applied to the merits of the dispute, the means of proof to be applied and the language of the proceedings.8
Arbitration has an important role today, especially in the resolution of disputes of international character; it is subject to many distinctions among itself, both structurally and qualitatively. In this context, many different concepts such as national and international arbitration, ad hoc and institutional arbitration, commercial arbitration, construction arbitration, investment arbitration have emerged.9
To briefly touch upon these distinctions, if a dispute has foreign elements, the arbitration procedure in question will be called international arbitration, while if arbitration is preferred for the resolution of disputes without foreign elements, this procedure will be called national (internal) arbitration.10
On the other hand, the dual distinction between ad hoc and institutional arbitration procedures refers to the difference in the way that the arbitration is organized.11 Ad hoc arbitration is the arbitration procedure conducted under the control of arbitrators whom are authorized by the parties, in accordance with the existing rules, which are fully determined or referred to by the parties.12 Alternatively, "institutional arbitration" (Administered Arbitration) refers to the parties leaving the relevant arbitration procedure under the control of one of the many institutional arbitration centers organized in various parts of the world. In institutional arbitration, the editorial and administrative functions are undertaken by international arbitration centers such as ICC, HKIAC, AAA, SIAC, LCIA, which are selected by the parties.
Classifications made depending on the contract on which the dispute is based includes, however, not limited to the following: commercial arbitration, construction arbitration, investment arbitration. Commercial arbitration means that the dispute between the parties arises from a commercial contract.13 Similarly in construction arbitration, the dispute between the parties arises from a construction agreement. 14
Investment arbitration, on the other hand, is related to the resolution of disputes arising from foreign investments.15 "Investment arbitration" (ICSID arbitration) is envisaged as a special institutional arbitration procedure for the settlement of disputes arising from investment relations between states and foreign natural and legal persons.16 Today, disputes subject to investment arbitration are based on bilateral or multilateral investment treaties between states, including arbitration clauses that stipulate the jurisdiction of ICSID. The Energy Charter Treaty, which Turkey is a party to, can be cited as an example of multilateral investment treaties.
Arbitration proceedings, which are subject to these distinctions, are subject to the procedural rules determined by the parties, but generally represent a full judicial function. In other words, it includes similar procedural steps such as exchanging petitions, hearing witnesses and holding hearings between the parties, as is the case with the state-mediated trial through the courts.
Different from the dispute resolution methods which includes a trial process and is carried out through arbitral tribunals or state courts, alternative dispute resolution methods aim to resolve the conflict by finding a balance of interests, that is, a middle way, between the parties through mutual negotiations. In other words, as a result of the adoption of these methods, there is not a single party that loses or wins in the settlement of the dispute. In reality, parties compromise to a degree in order to find a middle ground so that both parties can win. Due to reasons above mentioned, Alternative Dispute Resolution methods such as negotiation, mediation and conciliation are nowadays more common.
Although negotiation is the basis of all other alternative dispute resolution methods, it differs from others in one important point.17 In this context, the negotiation method, unlike other methods, is carried out entirely under the control of the parties and there is no third party intervention in any way.18
Parties to a negotiation can be states, groups and natural/ legal persons. Influencing and persuading the other party are considered to be two essential elements negotiation. In order to achieve these goals, parties consciously or unconsciously, resort to various emotional and calculated communication methods. Negotiation is a dynamic process that involves interaction, exchange of information and is based on the intersection of interests and needs of the parties. Parties aim to achieve their goals by resorting to mutual persuasion efforts. Since this period is conducted voluntarily, in order for negotiations to succeed, each party has to put their efforts into it.19
The absence of a third party's intervention during the negotiation method has led to the development of different resolution methods as a result of the negative effect of the process, usually due to the tension between the parties arising from the conflict and various other feelings. Conciliation is one of these methods, and it refers to a process carried out by an impartial third party, called "conciliator", to advice on the resolution of the legal dispute according to the existing contract between the parties.20
In this context, the conciliator, whose independence and objectivity is essential, offers various solutions to the parties in accordance with the characteristics of the relevant event and enables the parties to negotiate over these proposals. The aim is to ensure a result that is based on rights, legitimacy and current legal rules which can protect the interests of both parties. For this reason, conciliation is a more solution-result-oriented method that operates in a more static and prescriptive manner, unlike mediation.
Among the alternative dispute resolution methods, one of the most preferred method after negotiation is mediation, since it is one of the methods in which the will of the parties to the dispute is most effective. Mediation can be expressed as a method that aims to make the parties to the dispute speak and negotiate, and which is carried out voluntarily by a completely independent, impartial and objective third party, enabling the parties to understand each other and to produce their own solutions.21 Thus, in this context, the communication between the parties is facilitated in a more solution-oriented manner. As a result, mediator does not make any decisions regarding the dispute. The right to make a decisions regarding the dispute solely belongs to the parties.22 The mediator only tries to assist the parties to overcome the communication barriers that they encounter in the way of finding a solution by approaching the dispute issue from the outside as a third eye and approaching it more calmly. Unlike conciliation, mediators do not make any suggestions for the resolution of the dispute. Decisions made as a result of the mediation method, as in other alternative dispute resolution methods, are not legally binding unless otherwise agreed by the parties.23 However, in practice, since these decisions are taken as a result of the common will of the parties, the probability of their adoption and implementation by both parties is considered to be high.
As discussed above, Alternative Dispute Resolution (ADR) methods refer to ways that give the parties more authority and opportunity over the result to be obtained, as an alternative to the conventional method of proceedings being conducted under the authority of state courts or arbitral tribunals. Today, with the daily intensity of state courts and the increase in litigation costs, ADR methods have begun to be recognized as the first remedy required to be applied in many countries in terms of related disputes, and apart from these issues, they have evolved into methods that are more preferred and increasingly widespread by the parties.
1. Harvard Business Review (1995) Alternative Dispute Resolution: Why It Doesn't Work and Why It Does by Todd B. Carver and Albert A. Vondra
2. 2010 U. Ill. L. Rev. 1 (2010) Arbitration: The New Litigation
3. Mihaela Iriana Ionescu, Alternative Dispute Resolution, 22 LEX ET Scientia INT'l J. 89 (2015).
4. Evan J. Spelfogel, Alternative Dispute Resolution and Deferral to Arbitration, 6 LAB. LAW. 87 (1990).
5. Michael P. Rushing, Intractable Conflicts and Their Transformations, 30 FAM. & CONCIL. Cts. REV. 271 (1992).
6. Laurence Jeanlus, Who Decides the Validity and Applicability of an Arbitration Clause?, 19 FLA. St. U. Bus. REV. 221 (2020).
7. Russell, F., Russell on Arbitration, 24th ed., 2015, para. 2-065.
8. Born, G., International Arbitration and Forum Selection Agreements: Drafting and Enforcing (Fifth Edition), 5th ed., 2016, Chapter 3, para. 3.
9. Moses, Margaret L., The Principles and Practice of International Commercial Arbitration (Cambridge University Press 2008), p.9
10. Moses, Margaret L., The Principles and Practice of International Commercial Arbitration (Cambridge University Press 2008),p.10
11. Moses, Margaret L., The Principles and Practice of International Commercial Arbitration (Cambridge University Press 2008),p.9
12. Moses, Margaret L., The Principles and Practice of International Commercial Arbitration (Cambridge University Press 2008),p.9
13. Moses, Margaret L., The Principles and Practice of International Commercial Arbitration (Cambridge University Press 2008),p.220
14. Moses, Margaret L., The Principles and Practice of International Commercial Arbitration (Cambridge University Press 2008),p.219
15. Moses, Margaret L., The Principles and Practice of International Commercial Arbitration (Cambridge University Press 2008),p.221
16. Joshua Fellenbaum, Introductory Remarks: An Overview of Investment Arbitration, 2 GLOBAL Bus. L. REV. 1 (2011).
17. S.G. Goldberg; E.A. Frank; N.H. Rogers; Dispute Resolution: Negotiation, Mediation, and Other Processes, (2nd ed.) (Boston: Little, Brown and Company, 1992) at 3.
18. The Law Society of Upper Canada "Short Glossary of Dispute Resolution Terms" (Toronto: 1992) at 6.
19. I. William Zartman & Maureen Berman, The Practical Negotiator (New Haven: Yale University Press, 1982) at 132, 226.
20. Moses, Margaret L., The Principles and Practice of International Commercial Arbitration (Cambridge University Press 2008),p.14
21. Moses, Margaret L., The Principles and Practice of International Commercial Arbitration (Cambridge University Press 2008),p.13
22. Subhan Jelis, Arbitration Conciliation and Mediation- Conflict between Formal and Informal Setups, p.10
23. Yona Shamir, Alternative Dispute Resolution Approaches and Their Application, No.7, p.30
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