Alternative Dispute Resolution

Overview

Title 9 of the United States Code establishes the Federal law enforcing arbitration based on congress’s constitutional power to regulate interstate commerce. Since the addition of Title 9 all states have included the Uniform Arbitration Act into state law making arbitration enforceable under both state and federal law (Cochran, 2007).

Alternative Dispute Resolution is considered any method of mediation outside of the government court system. Arising as the result of infinitely increasing disputes and rising costs of litigation ADR is becoming a more prevalent method of resolving disputes (Cochran, 2007).

Mediation and arbitration are the most common types of alternative dispute resolution. Mediation is a simple process of hiring a mediator to allow the parties involved to come to an agreement. Some court decisions – primarily in divorce situations – mediation is a court required process, but Title 9 does not make all forms of dispute resolution enforceable (Sido, 2005). Only arbitration is enforceable under state and federal law. Being unbinding by law mediation often results without resolution or even in the event of resolution it is not binding. In the event that mediation fails, arbitration or litigation is a viable option. Conversely, arbitration is a process that is binding by law. In order to enter into arbitration both parties must contractually agree to the arbitration in order for proceedings to take place. (Sido, 2005)

Acme Inc.

“Acme Inc. faces a breach of contract case brought by its principal supplier, Imperial Corp.” The breach of contract is the result of ambiguity in the long-term sales contract. Acme firmly believes that they make up a large profit margin for Imperial, and Acme is dependent on the unique supply of Imperial. This dependency on each-other is a key deciding factor in deciding how to resolve the matter. It seems that because of the symbiotic relationship that these businesses share and the simple fact that the dispute is regarding an ambiguous contract it is advisable that the company would simply seek mediation in this case to re-define the terms of the contract as it applies to delivery. Mediation is a low-cost method to resolving such disputes expending only 18 – 20% of the total cost of litigation (Adetoro, 2005). Mediation also will serve to maintain the relationship that the two companies have. It seems that mediation would be a fruitful endeavor because of the fact that the two companies would both benefit from the resolution of the dispute. The non-legal aspect of the situation allows the dispute to remain out of the public eye, which can be a PR nightmare for both of the companies.

Hightech Ltd.

Hightech Ltd. is involved in a copyright dispute with one of its competitors, Megasoft Inc. It