Commercial Disputes & Resolution

What is a Commercial Dispute?

A commercial dispute is a conflict or disagreement between two or more individuals or entities engaged in a commercial relationship. Very often, such disputes arise out of a contract entered into by the individuals or entities; for example, when one party fails to pay for goods or services provided by another party under the contract.

Some Types of Commercial Disputes

• Partnership disputes: This arises between business partners or co-owners of a business. It may involve disagreements over management decisions or profit sharing etc.
• Employment disputes: This arises between employers and employees and could involve arise out of the employee’s termination of employment, non-payment of salaries, harassment etc.
• Insurance disputes: This occurs when an insurance company denies a claim or disputes the amount of coverage owed under an insurance policy.
• Real estate disputes: This arises between parties involved in buying, selling, leasing, or managing property; often between a seller and buyer of a property or between a real estate agent and the seller of the property.

How could commercial disputes be resolved?

Increasingly, Alternative Dispute Resolution (‘ADR’) methods are chosen to resolve commercial disputes over court litigation. This particularly benefits in preserving commercial relationships and saving costs by resolving the dispute amicably and in a timely manner.

Types of Alternative Dispute Resolution

• Negotiation: Negotiation is a process where parties in a commercial dispute engage in discussions between themselves to resolve the dispute amicably. In the discussions the parties will try to identify common interests, find compromises and explore potential solutions. It is an informal and flexible process.
• Mediation: Mediation is a consensual process where the parties in a dispute engage an impartial and neutral third party known as a mediator to assist them in resolving the dispute. The mediator’s objective is to facilitate discussions between the parties to assist them parties find a common ground to resolve the dispute.
• Arbitration: Arbitration is a process where two or more parties agree to resolve disputes between them before a neutral party known as an arbitrator. It is a flexible process conducted privately. The arbitrators hear parties respective cases, analyse evidence and make a determination on the dispute. The arbitrator will then give a decision which is binding on the parties.

Advantages of Alternative Dispute Resolution (ADR) in Commercial Disputes

Commercial disputes are not uncommon in the business environment. It is crucial to deal with such disputes quickly and amicably. The ADR methods above are popular as it provides confidentiality and timelines that allow businesses to resolve the disputes quickly as well as protect their commercial arrangements and relationships.