TIERED DISPUTE RESOLUTION CLAUSES - why you should use them and how to make sure they work

• Author: King & Wood Mallesons
• Published date: 16/09/2019
• Citation: jd0082
• Date: 16 September 2019
• Subject Matter: Dispute Resolution

2020/11/2 TIERED DISPUTE RESOLUTION CLAUSES | why you should use them and how to make sure they work | China Law Insight

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CHINA LAW INSIGHT

TIERED DISPUTE RESOLUTION CLAUSES | why

you should use them and how to make sure they

work

By King & Wood Mallesons on September 16, 2019

Given the significant levels of early international support for the Singapore [Mediation]

Convention[1] and the growing popularity (and success) of international commercial

mediation (see https://www.kwm.com/en/jp/knowledge/insights/in-anticipation-of-

this-month-s-singapore-mediation-conference-20190806), tiered dispute resolution

clauses (“TDRCs”) are very much in focus for many corporate counsel. In several

industries, for example the energy industry where parties are often engaged in complex

long-term contractual relationships that require continuing, day-to-day cooperation,

TDRCs are already widely used as a way of solving potential disputes as and when they

arise and saving ongoing working relationships. Nevertheless, there are some pitfalls that

you need to be aware of and so we will look at:

an English high court judgment from last month that both underlines the courts’

strong support for alternative dispute resolution (“ADR”) and TDRCs, and highlights

the requirements you need to satisfy in order to make sure that your TDRCs are

enforceable; and

4 TOP TIPS to bear in mind when drafting an enforceable TDRC.

TDRCs – what are they?

TDRCs are contractual provisions setting out a series of ADR steps that parties must take

whenever a potential problem or dispute arises – prior to commencing any formal legal

proceedings. These pre-action ADR steps can include discussions and negotiation

between different levels of staff, as well as adjudication, early neutral evaluation or

mediation – all aimed at finding solutions to problems in a non-adversarial setting. In