Enforceability of Mediated Settlements of International Disputes within NAFTA - Commercial Mediation and Arbitration in the NAFTA Countries
Jeffrey A. Talpis
Jeffrey A. Talpis is currently Professor of Law at the University of Montreal is currently Professor of Law at the University of Montreal.
Originally from Commercial Mediation and Arbitration in the NAFTA Countries
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.