{"id":29726,"date":"2019-08-05T11:00:45","date_gmt":"2019-08-05T03:00:45","guid":{"rendered":"https:\/\/zegal.com\/?p=29726"},"modified":"2023-01-18T13:51:25","modified_gmt":"2023-01-18T05:51:25","slug":"your-complete-toolkit-for-alternative-dispute-resolution-adr-in-singapore-dos-and-donts-for-adr-clause","status":"publish","type":"post","link":"https:\/\/zegal.com\/en-sg\/blog\/post\/your-complete-toolkit-for-alternative-dispute-resolution-adr-in-singapore-dos-and-donts-for-adr-clause\/","title":{"rendered":"Your Complete Toolkit for Alternative Dispute Resolution (ADR) in Singapore: Do\u2019s and Don\u2019ts for ADR Clauses"},"content":{"rendered":"

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Topic 1: Do\u2019s and Don\u2019ts for ADR clauses<\/span><\/strong><\/h3>\n

This is the first in a series of five articles on alternative dispute resolution<\/strong> (ADR). This article will give tips on what to consider and avoid when preparing ADR terms in a contract. <\/span><\/p>\n

The next article will analyse sample ADR clauses in two template agreements from the Zegal database: a Business Collaboration Agreement<\/strong> and Partnership Agreement<\/strong>.<\/span><\/p>\n

More and more companies are realising how important it is to plan how they will resolve contractual disputes well before they happen. This means they are able to take advantage of alternative dispute resolution (\u201cADR\u201d) methods, that may be more suitable for them than going to Court. <\/span><\/p>\n

Parties can consider and discuss their competing interests, such as confidentiality, cost, or speed of resolution, to select suitable ways to resolve any dispute. Once contracting parties agree on the dispute resolution method, it will be recorded as a clause in their contract (ADR clause). <\/span><\/p>\n

A well-drafted ADR clause then helps parties resolve the dispute using the method(s) they agreed to before things went wrong. <\/span><\/h5>\n

However, a badly-drafted ADR clause can be costly and stressful to deal with. It can lead to disagreements between parties about the way in which the dispute should be resolved, increased costs, and delays in resolving the dispute itself. <\/span><\/p>\n

Set out below is a list of important points to consider and common pitfalls to avoid when drafting ADR clauses:<\/span><\/p>\n

Contradictory Methods of Resolving Disputes:<\/h4>\n

Some types of dispute resolution can be used one after the other. ADR clauses can provide for \u201cmulti-tiered dispute resolution\u201d so that if one method fails to resolve the dispute then there is still a back-up option. <\/span><\/p>\n

Types of multi-tiered dispute resolution that can work together:<\/span>
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However, take note that you can only provide one \u201ctrack\u201d per contract e.g. mediation followed by arbitration only. <\/span><\/p>\n

Problems arise when a contract contains two or more incompatible methods of dispute resolution. For example, where both methods are final and binding, or where parties provide two conflicting options for the second stage, because they wrongly believe that they can decide between them later when a dispute arises. <\/span><\/p>\n

Incompatible combinations include:<\/strong><\/p>\n