Originally from American Review of International Arbitration - ARIA

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I. INTRODUCTION

The term “arbitration” only tells part of the story of how the dispute between International Business Machines, Inc. (“IBM”) and Fujitsu Ltd. was resolved.1 The procedure followed in this case is an excellent example of how various Alternative Dispute Resolution (“ADR”) techniques can be combined to design2 a procedure that is tailored to the particularities of a controversy, and how these techniques can be integrated into the framework of international commercial arbitration.

The IBM-Fujitsu “arbitration” was exceptional in many ways. First, the dimensions of the conflict, both in stakes and complexity, were gigantic. IBM, the world’s largest computer company, and Fujitsu, Japan’s largest computer manufacturer and the fourth largest in the world, were disputing claims involving the proprietary rights to thousands of computer software programs and alleged damages amounting to several hundred million dollars. Second, the matters decided went well beyond the scope of ordinary dispute resolution: The arbitrators were asked to devise a regime to govern the relationship between the two parties for the ten years subsequent to the proceedings, and were even given jurisdiction to resolve additional disputes arising from the parties’ business relationship until the year 2002. Third, the controversy touched on a number of unsettled, highly controversial legal issues that were further complicated by the global scale of the companies’ operations and the intercultural implications of the dispute. The latter complication is illustrated by the fact that the concept of intellectual property and its correlation to the concept of free competition are not necessarily understood in the same manner in the United States and Japan. Finally, given the dimensions and complexity of the controversy, the arrival at a first award in only a little over two years3was remarkable in itself.4

This case provides a particularly interesting example of the potential to be found, first, in the use and combination of innovative dispute resolution techniques to design a procedure specifically for a particular conflict, and second, in the use in a complex dispute of a “dialectical” interplay between negotiation among the parties and adjudication by a neutral third party.