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Arbitration and Mediation

Outsourcing is a specialist area which requires specific domain and practical experience. An arbitrator or mediator should in addition also possess the commercial knowledge to arbitrate and mediate effectively between the two parties.

Op2i can help organisations resolve disputes through mediation finding solutions which are just and acceptable to both parties. We understand the outsourcing business and the subtle complexities faced by both users and suppliers of outsourcing services. In our experience most disputes and issues that arise within the relationship can be resolved. Most disputes usually arise from poor communication and misguided and unrealistic expectations from either party. Unfortunately with most outsourcing programmes managed as transactions, there is little room for compromise and thus disputes become adversarial in nature.

Op2i being an independent neutral mediator, works with both parties to resolve issues where possible to find win-win solutions. However this is not to say that some disputes can only be resolved through litigation. Op2i believes this should always be a last resort and companies must explore alternatives to this where possible.

Outsourcing contracts are increasingly inserting arbitration clauses, which oblige the parties to submit to arbitration, all or certain disputes, which have arisen or which may arise between them in respect of a defined legal relationship whether contractual or not.

The arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.

Arbitration offers a cost effective and potentially confidential process compared to court room litigation, which is not only adversarial but can cause adverse PR for the companies involved.

Companies must also consider the implications of having potentially two different laws affecting the contract for off-shoring and need to analyse which laws apply under which circumstances. Arbitration offers a more straightforward means of avoiding expensive courtroom litigation and in some cases, companies can enforce foreign judgements and arbitration awards in the local jurisdiction.

However, the process of arbitration is not governed by a well established set of case law and rules like litigation, so waiting for a final award can often be lengthier than may be imagined.

Arbitrators sometimes make decisions that are unexpected, since the decisions are frequently based on compromise.

An alternative to arbitration is mediation by an independent third party, who works with both parties to find solutions to disputes that may have arisen. Mediation differs from arbitration in that the mediatorís decision may not necessarily be binding as it would be under an arbitration process.


 

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