Due to the specific nature of maritime contracts, most written contracts include the preferred methods for resolving a contract dispute. If a contract has no clause for contract dispute resolution, the companies involved will negotiate how to resolve the contract in dispute.
More efficient resolutions
Many questions go into deciding how a company should proceed in a dispute. Most of these questions include the relationship between the parties in dispute, the scale of the disagreement (in terms of monetary amounts), and if there is third party intervention, as is the case with insurance company involvement. Here are some methods of contract dispute resolution:
- Mediation: When direct negotiation is too challenging, both parties can agree to hire a third party to make an honest assessment of the contract dispute and provide suggestions. A technical expert can give a neutral report for use in the negotiation. This method is particularly useful when the general facts of the dispute are not in question by either party. Companies in dispute jointly utilize a neutral third party to help clarify and maintain an unbiased perspective. ‘Mediation’ is similar to ‘early intervention’ in that it hopes to resolve the dispute through the suggestions of a third party to avoid litigation.
- Arbitration: Like litigation, arbitration is a formal method of resolving a dispute. In arbitration, an arbitrator (or group of arbitrators) presides over a dispute case. Some jurisdictions have particular maritime arbitration associations for this very purpose. This form of resolution is useful for international trade disputes, as it has more enforceability.
- Litigation: A formal method of resolving a dispute that is often more adversarial. In litigation, the court appoints a judge to be an impartial observer. The judge resolves the dispute and makes judgments on a neutral basis. Jurisdiction is vital in deciding how litigation can proceed. The costly nature of these kinds of resolutions makes it an option of last resort in most contract disputes.
Safeguarding your interests
Oftentimes, the best choice for a company that is attempting to resolve a contract dispute is a combination of these methods, given the scale and complexity of the disagreement. A lawyer experienced in the intricacies of maritime law will be able to guide you through the process of contract dispute resolution, helping you to select the form of resolution that best fits your needs. Once you determine the cost and liabilities associated with each form of negotiation, you can proceed with confidence, knowing that an attorney is considering your interests, as well as your business relationships.