Pre-Dispute Mediation and Arbitration Step Clause
The use of the Mediation process is growing globally. Parties can include this language in their agreements to use mediation and then arbitration to resolve any potential disputes. In mediation, parties are free to negotiate business solutions not constrained by law or contract. Increasingly, parties perceive that mediation is more effective if an unresolved dispute is to be followed, and resolved, by arbitration. Since the requirement to mediate may be seen as a condition precedent to arbitration, a deadline should be established allowing parties to move from mediation to arbitration if necessary to avoid delay.
Standard Mediation and Arbitration Clause with 60-day Mediation time-period
“In the event of any controversy or claim arising out of or relating to this contract, or a breach thereof, the parties hereto agree first to try and settle the dispute by mediation for at least 60 days, administered by mediation.org under its Mediation Guidelines. Thereafter, any unresolved controversy or claim arising out of or relating to this contract shall be settled by arbitration in accordance with the [Commercial, Construction, Employment, International or other] Arbitration Rules of the American Arbitration Association.”
The parties should consider adding:
- The place of mediation shall be [city, (province or state), country]; and
- The language of the mediation shall be __________.
- “The number of arbitrators shall be (one or three)”;
- “The place of arbitration shall be [city, (province or state), country]”;
- “The language(s) of the arbitration shall be ___.”