Enforceability of Mediated Settlements of International Disputes within NAFTA - Commercial Mediation and Arbitration in the NAFTA Countries

Author(s): 

Jeffrey A. Talpis

Page Count: 

15 pages

Published: 

November, 1999

Practice Areas: 

Commercial Disputes,

Mediation,

NAFTA

Author Detail: 

Jeffrey A. Talpis is currently Professor of Law at the University of Montreal is currently Professor of Law at the University of Montreal.

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Description: 

Originally from Commercial Mediation and Arbitration in the NAFTA Countries

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INTRODUCTION 

With the passage of the North American Free Trade Agreement (NAFTA), commercial transactions between Canada, the United States and Mexico have expanded dramatically, thereby increasing the potential for international disputes and the need for fair and effective dispute resolution procedures. 

 

The problems associated with litigating international disputes are many, including delays in determining of the appropriate forum, caused by wide bases of jurisdiction under national laws, litigation in multiple fora, doubt regarding the applicable law, uncertainty as to the enforceability of foreign judgments, combative and formalistic legal environments,  high  costs  and  court  congestion.  For  this  reason  Article  2022(1)  of NAFTA provides that Mexico, Canada and the United States "shall to the maximum extent possible, encourage and facilitate the use of Arbitration and other means of alternative dispute resolution for the settlement of international commercial disputes between private parties in the free trade area". 

 

Because  arbitration  is  the  norm  in  the  resolution  of  international  business disputes, NAFTA's encouragement of it comes as no surprise. Aside from the many advantages of the procedure, arbitration functions effectively to resolve international disputes  because  national  and  international  legal  frameworks  exist  to  ensure  the enforceability of arbitration agreements and arbitration awards. 

 

Parties to international agreements sometimes have reservations about using arbitration, since it is, by nature, an adversarial process. Hence, while it is still rare for international contracts to provide for dispute resolution other than by litigation or arbitration,  it  is  conceivable  that parties  to  international  agreements  will  resort increasingly to informal alternative dispute resolution (ADR) mechanisms, at least as a preliminary step.