Dispute resolution tools
Resolving disputes requires the use of a carefully selected set of tools that most effectively lead to achieving the intended business objective. Every conflict is different – although we all operate within the same procedural legal framework, the choice ofalternative, out-of-court methods opens up awide range of possibilities.
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Well-tailored alternative solutions make it possible to reach a resolution that is faster, more efficient, and often less costly, while also preserving – or even rebuilding – valuable business relationships.
1. Negotiation
Negotiation is a bilateral communication process between parties aimed at reaching an agreement. It involves an active search for a solution that satisfies all stakeholders.
The foundation of successful negotiation lies in the ability to recognize and understand the other party’s needs, as well as to align interests and goals with flexibility. When conducted effectively, negotiations can not only resolve the current conflict but also build a strong foundation for future cooperation.
2. Facilitation
Facilitation is used in disputes involving multiple parties or complex, multi-dimensional issues. Its essence lies in the support of a neutral third party who oversees the communication process and helps participants adhere to agreed rules.
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A facilitator does not impose a solution but assists the parties in maintaining a structured dialogue, encourages compromise, and helps establish shared guidelines for constructive discussion. Facilitation can be applied on its own or as a complement to negotiation.
3. Business mediation
Business mediation is an alternative to court or arbitration proceedings – it is less formal, faster, and more cost-effective. In this process, the parties, with the support of an impartial mediator, work together to develop a mutually satisfactory solution.
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Its key advantage lies in the ability to preserve strong business relationships – the parties view each other not as opponents but as partners pursuing a common goal. Agreements reached through mediation follow a “win–win” principle, and once approved by the court, they carry the same legal force as a judgment.
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Using mediation also reflects adherence to the highest standards of business conduct – it demonstrates responsibility and the ability to resolve conflicts in a constructive and forward- looking manner.
4. Conciliation
Conciliation, like mediation, is a form of alternative dispute resolution. However, it differs in that the conciliator – or a specially appointed conciliation commission – independently develops a proposal for resolving the conflict.
This proposal is not binding; rather, it serves as a starting point for further discussions and negotiations. The parties may accept, reject, or modify it. Conciliation is particularly useful when the parties need external input or a structured framework to guide them toward a resolution.
5. Arbitration
Arbitration is an alternative to state court proceedings, in which disputes are resolved by an arbitration court. Its use requires a prior agreement between the parties in the form of an “arbitration clause” included in their contract.
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Arbitration proceedings are conducted by an arbitrator or a panel of arbitrators appointed by the parties, operating within an arbitration court. The process follows the rules of that institution, and the arbitral award – in certain cases – may be appealed before a state court.
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Arbitration combines the advantages of formal legal proceedings with greater flexibility and efficiency. In the business environment, it is regarded as a professional and effective method of resolving disputes.
6. Court proceedings
Proceedings before a state court remain the primary institutional method of resolving disputes. This process is governed by law, with the parties represented by their legal counsel, and the final decision rendered by an independent and impartial court.
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Although litigation is usually the most formal and time-consuming form of dispute resolution, in many situations it proves unavoidable. In such cases, the proper development of a litigation strategy is crucial — ensuring that all actions taken during the dispute effectively protect the entrepreneur’s interests and lead to the most favorable possible outcome.