CPR Model Clauses and Sample Language


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Download a pdf of the Dispute Resolution Drafting Checklist here

CPR MODEL CLAUSES AND SAMPLE LANGUAGE


Introduction

Why Use Pre-dispute Resolution Clauses?

The best time to agree on a sensible way to resolve a contractual dispute is when parties are negotiating their business agreement, before any dispute has arisen.  A cooperative atmosphere typically prevails at that juncture, so that agreeing on rational, fair dispute resolution procedures can be built into the negotiating process.  Once disputes erupt, it can be much more difficult for parties to agree about anything.

Why Use ADR?  "Too much, too time consuming and too expensive."  That is the consensus in the business community about litigation.  Most disputes between responsible parties can be settled by negotiation.  But when negotiations fail, sequential use of multi-step alternative dispute resolution, or ADR, provides an alternative to litigation.

Which Multi-Step ADR Procedures?  CPR recommends that business agreements include a multi-step ADR scheme with three sequential stages of dispute resolution:

• A Negotiation Phase between executives with decision-making authority who are at a higher level than the personnel involved in the dispute.

• A Mediation Phase to facilitate settlement by employing a skilled neutral, not to impose a solution, but to assist the parties in reaching agreement.
 
(Select One Below)

• A Final Binding Arbitration Phase in case the non-binding phase produces no settlement.
 
- or -
 
• Litigation if the non-binding phase produces no settlement and private binding arbitration is not selected.

Why Consider Mediation before Arbitration (or Litigation)?  Mediation involves the introduction of a neutral third party who helps each party rationally evaluate its own claims and risks in relation to those of the opposing party(ies), and who assists in a negotiated resolution.  Mediation is a conciliatory procedure.  The mediator often helps the parties develop creative, business-oriented options for settlement.

Good faith use of mediation increases the chances of arriving at a mutually acceptable resolution.  Commonly cited mediation advantages are:

    • Substantial savings in legal fees and other litigation expenses.
    • Savings in the time and energy of executives.
    • Prompt resolution; the mediator helps overcome negotiation barriers.
    • Creative, business-driven "win-win" solutions not available in a court of law.
    • Preservation of the business relationship.
    • Privacy and confidentiality.
    • A risk-free process that allows use of arbitration or litigation if parties do not reach agreement.

If no settlement is reached, potential downsides to using mediation before arbitration or litigation is that it generally delays commencement of the arbitration phase and additional costs associated with the mediation are incurred. However, often the mediation narrows any eventual arbitration.

While arbitration or litigation will produce a final resolution, both are adversarial processes, where arbitrators, judges or juries decide who is right or wrong.  Mediation offers parties an effective chance to settle their claims amicably, on a business basis, with less costs, time and adversarial behavior than arbitration or litigation.

Why Use CPR's Clauses?

Clauses Suit Many Contracts Without the Need for Extensive Revision.  The sample clauses are suitable for use in virtually any business agreement:  commercial agreements, leases, patent license agreements, construction agreements, joint venture agreements and distributorship agreements, to name a few.

Clauses Foster Cost-Effective Ad Hoc or Self-Administered ADR.  CPR's procedures call for "ad hoc" or "self-administered" ADR, which means that once the neutral is selected, it becomes his or her responsibility to handle administrative matters (such as arranging meeting dates and locations) in consultation with the parties.  Using CPR dispute resolution clauses saves money by offering ad hoc/ self-administered proceedings and virtually eliminating all administrative fees.  The parties pay only the neutral’s fees and no provider organization fees.

In addition, parties have a choice.  They can retain the Panelists directly, without any obligation to CPR.  Or for a modest charge they can ask CPR to help them retain a Panelist.  But once the neutral is selected, the parties pay only the neutral's normal hourly rate, which is typically split among the parties.  
In the event the parties reach an impasse in the course of handling administrative matters, CPR can provide assistance as requested and an appropriate fee is charged for that service.  No filing fee or other fee is paid to CPR to conduct a proceeding under its procedures and rules in the ordinary course.
In CPR's judgment, self-administered ADR best achieves the economy, quality, control and flexibility that ADR offers.

Clauses Propose Use of Skilled CPR Neutrals to Foster ADR Success.  Selection of the right neutral well qualified to conduct a particular ADR proceeding is crucial to ADR success.  This point cannot be overemphasized.  CPR's clauses and procedures recommend use of CPR's Panels of Distinguished Neutrals.  The CPR Panels of Distinguished Neutrals consist of a limited number of leaders of the bar, including eminent former judges and legal academics, who are highly qualified to serve as neutrals in significant disputes and who are familiar with CPR model procedures.  In addition to panels of generalists, there are panels of leading experts in construction, environmental, financial services, franchise, insurance, technology and trademark disputes.  There is also the CPR International Panel of Distinguished Neutrals consisting of leading attorneys outside the U.S. well qualified for large, complex international business disputes.  A roster of CPR Panels can be found on CPR's Web site at www.cpradr.org (Neutrals).

Tailoring Clauses.  CPR encourages users to adapt the clauses to suit particular case needs.

Clauses Incorporate CPR Procedures by Reference.  Parties to a business agreement rarely wish to negotiate dispute resolution procedures from scratch.  Most prefer to incorporate by reference procedures in which they have confidence.  This issue presents itself commonly in mediation or arbitration clauses.  CPR's ADR clauses make reference to the CPR Mediation Procedure and the CPR Rules for Non-Administered Arbitration that can be modified to fit the specifics of a transaction and its potential disputes.  Highlights of the CPR Mediation Procedure and the CPR Rules for Non-Administered Arbitration appear under the section CPR Procedures and Clauses.  Full text and Commentary can be found on CPR's Web site at www.cpradr.org (Procedures and Clauses).  A chart highlighting the differences between arbitration and litigation can be found by clicking on the link above.

Special International Provisions Available.  For international agreements, CPR provides a separate set of clauses and model ADR procedures. These procedures can be found on our website:

    •  CPR International ADR Clauses *
    •  CPR European Mediation Procedure
    •  CPR European Minitrial Procedure
    •  CPR Rules for Non-Administered Arbitration of International Disputes (Rev. 2007)

* This information is in this document.

CPR Drafting Dispute Resolution Clauses.  For more comprehensive guidance on dispute resolution clause drafting, legal issues and examples of leading companies' dispute resolution clauses and agreements, the CPR Master Guides Series on Conflict Prevention and Resolution Drafting Dispute Resolution Clauses (2006) and Supplement (2008) are available as a drafting tool on our website for purchase.

CPR's Drafting Dispute Resolution Clauses –

    •      Provides a practice-oriented description of common alternative dispute resolution processes
            geared towards transactional and business lawyers.

    •     Provides accessible and sophisticated information on pre-dispute clause drafting – model clauses,
           primer sections, informative check lists (including case citations) – with an emphasis on alternative
           dispute resolution processes and multi-step clauses.

    •     Provides over 35 sample dispute resolution clauses from more than 20 companies.


Preamble

Any dispute arising out of or relating to this Agreement shall be resolved in accordance with the procedures specified in this Article 00, which shall be the sole and exclusive procedures for the resolution of any such disputes.

CPR MODEL MULTI-STEP DISPUTE RESOLUTION CLAUSE

Negotiation Between Executives (A)   The parties shall attempt in good faith to resolve any dispute arising out of or relating to this [Agreement] [Contract] promptly by negotiation between executives who have authority to settle the controversy and who are at a higher level of management than the persons with direct responsibility for administration of this contract. Any person may give the other party written notice of any dispute not resolved in the normal course of business. Within [15] days after delivery of the notice, the receiving party shall submit to the other a written response. The notice and response shall include (a) a statement of that party’s position and a summary of arguments supporting that position, and (b) the name and title of the executive who will represent that party and of any other person who will accompany the executive. Within [30] days after delivery of the initial notice, the executives of both parties shall meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary, to attempt to resolve the dispute. All reasonable requests for information made by one party to the other will be honored. All negotiations pursuant to this clause are confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence.

Mediation (B)     If the dispute has not been resolved by negotiation as provided herein within[45] days after delivery of the initial notice of negotiation, [or if the parties failed to meet within [20] days,] the parties shall endeavor to settle the dispute by mediation under the International Institute for Conflict Prevention & Resolution (“CPR”) Mediation Procedure [currently in effect OR in effect on the date of this Agreement], [provided, however, that if one party fails to participate in the negotiation as provided herein, the other party can initiate mediation prior to the expiration of the [45] days.] Unless otherwise agreed, the parties will select a mediator from the CPR Panels of Distinguished Neutrals.

Arbitration (C)     Any dispute arising out of or relating to this [Agreement] [Contract], including the breach, termination or validity thereof, which has not been resolved by mediation as provided herein [within [45] days after initiation of the mediation procedure] [within [30] days after appointment of a mediator], shall be finally resolved by arbitration in accordance with the International Institute for Conflict Prevention & Resolution Rules for Non-Administered Arbitration [currently in effect OR in effect on the date of this Agreement], by [a sole arbitrator] [three independent and impartial arbitrators, of whom each party shall designate one] [three arbitrators of whom each party shall appoint one in accordance with the ‘screened’ appointment procedure provided in Rule 5.4] [three independent and impartial arbitrators, none of whom shall be appointed by either party]; [provided, however, that if one party fails to participate in either the negotiation or mediation as agreed herein, the other party can commence arbitration prior to the expiration of the time periods set forth above.] The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§1 et seq., and judgment upon the award rendered by the arbitrator(s) may be entered by any court having jurisdiction thereof. The place of arbitration shall be (city, state).

 Or Litigation


(C)     If the dispute has not been resolved by mediation as provided herein [within [45] days after initiation of the mediation procedure] [within 30 days after appointment of a mediator], this Agreement does not preclude either party from initiating litigation [upon 00 days written notice to the other party]; [provided, however, that if one party fails to participate in either the negotiation or mediation as agreed herein, the other party can initiate litigation prior to the expiration of the time periods set forth above.]

ADDITIONAL CPR MODEL CLAUSES

Additional Negotiation Step Option If the matter has not been resolved by these persons within [45] days of the initial notice, the dispute shall be referred to more senior executives of both parties who have authority to settle the dispute and who shall likewise meet to attempt to resolve the dispute.

Stand-Alone Mediation Clause

The parties shall attempt in good faith to resolve any dispute arising out of or relating to this Agreement promptly by confidential mediation under the CPR Mediation Procedure [currently in effect OR in effect on the date of this Agreement], before resorting to arbitration or litigation. Unless otherwise agreed, the parties will select a mediator from the CPR Panels of Distinguished Neutrals.

Negotiation-Mediation Clause with Designated Mediator Option

If the dispute has not been resolved by negotiation as provided herein within [45] days after delivery of the initial notice of negotiation, [or if the parties failed to meet within [20] days,] the parties shall endeavor to settle the dispute by mediation under the CPR Mediation Procedure [currently in effect OR in effect on the date of this Agreement], [provided, however, that if one party fails to participate as provided herein, the other party can initiate mediation prior to the expiration of the [45] days.] The parties have selected [insert name] as the mediator in any such dispute, and [he][she] has agreed to serve in that capacity and to be available on reasonable notice. In the event that [insert named mediator] becomes unwilling or unable to serve, the parties have selected [insert name] as the alternate mediator. In the event that neither person is willing or able to serve, the parties will agree on a substitute with the assistance of CPR. Unless otherwise agreed, the parties will select a mediator from the CPR Panels of Distinguished Neutrals.

Stand-Alone Arbitration Clause

Any dispute arising out of or relating to this contract, including the breach, termination or validity thereof, shall be finally resolved by arbitration in accordance with the International Institute for Conflict Prevention and Resolution Rules for Non-Administered Arbitration by (a sole arbitrator) (three arbitrators, of whom each party shall appoint one) (three arbitrators, of whom each party shall designate one in accordance with the “screened” appointment procedure provided in Rule 5.4) (three arbitrators, none of whom shall be appointed by either party). The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§1 et seq., and judgment upon the award rendered by the arbitrator(s) may be entered by any court having jurisdiction thereof. The place of the arbitration shall be (city, state).

CPR Model Minitrial Clause

The parties will attempt in good faith to resolve any dispute arising out of or relating to this Agreement in accordance with the CPR Minitrial Procedure [currently in effect OR in effect on the date of this Agreement] and will enter into an initiating agreement in the form annexed to such Procedure.

Mediation and Arbitration

The parties shall endeavor to resolve any dispute arising out of or relating to this Agreement by mediation under the CPR Mediation Procedure [currently in effect OR in effect on the date of this Agreement]. Unless the parties agree otherwise, the mediator will be selected from the CPR Panels of Distinguished Neutrals. Any controversy or claim arising out of or relating to this Agreement, including the breach, termination or validity thereof, which remains unresolved [[45] days after initiation of the mediation procedure] [[30] days after appointment of a mediator], shall be finally resolved by arbitration in accordance with the International Institute for Conflict Prevention & Resolution Rules for Non-Administered Arbitration [currently in effect OR in effect on the date of this Agreement], by [a sole arbitrator] [three independent and impartial arbitrators, of whom each party shall designate one] [three arbitrators of whom each party shall appoint one in accordance with the ‘screened’ appointment procedure provided in Rule 5.4] [three independent and impartial arbitrators, none of whom shall be appointed by either party]; [provided, however, that if one party fails to participate in the mediation as agreed herein, the other party can commence arbitration prior to the expiration of the time periods set forth above.] The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§1 et seq., and judgment upon the award rendered by the arbitrator(s) may be entered by any court having jurisdiction thereof. The place of arbitration shall be (city, state).

OPTIONAL CLAUSE LANGUAGE TO PROTECT RIGHTS

 Provisional Remedies and Interim Relief

The procedures specified in this Article 00 shall be the sole and exclusive procedures for the resolution of disputes between the parties arising out of or relating to this Agreement; provided, however, that a party may file a complaint [for statute of limitations or venue reasons,] [to seek a preliminary injunction or other provisional judicial relief,] if in its sole judgment such action is necessary. Despite such action, the parties will continue to participate in good faith in the procedures specified in this Article 00.

Tolling Statute of Limitations

All applicable statutes of limitation and defenses based upon the passage of time shall be tolled while the procedure(s) specified in this Article 00 is pending. The parties will take such action, if any, required to effectuate such tolling.

Performance to Continue

Each party is required to continue to perform its obligations under this contract pending final resolution of any dispute arising out of or relating to this contract, [unless to do so would be impossible or impracticable under the circumstances].

Right of Termination
The requirements of this Article 00 shall not be deemed a waiver of any right of termination under this contract. 

Further clauses

Sample “Baseball” or “Final-Offer” Arbitration Clause

The parties agree that they will exchange and provide to the arbitrator(s) a copy of written proposals for the amount of money damages they would offer or demand respectively. In rendering the Award the arbitrator(s) shall be limited to selecting only one of the two proposals submitted by the parties...
Sample “Night Baseball” Arbitration Clause The arbitrator(s) will render the Award, which will thereafter be adjusted to conform to the closest of the last proposals and the closest of the last proposals will become the Award.

CPR MODEL MEDIATION CLAUSES

CPR Model Abbreviated Mediation Clause


The parties shall endeavor to resolve any dispute arising out of or relating to this Agreement by mediation under the CPR Mediation Procedure. Unless otherwise agreed, the parties will select a mediator from the CPR Panels of Distinguished Neutrals.

CPR Model Two-Step Clause

Mediation Following Negotiation If the dispute has not been resolved by negotiation as provided herein within [45] days after delivery of the initial notice of negotiation, [or if the parties failed to meet within [30] days after delivery,] the parties shall endeavor to settle the dispute by mediation under the CPR Mediation Procedure [then currently in effect OR in effect on the date of this Agreement,] [provided, however, that if one party fails to participate in the negotiation as provided herein, the other party can initiate mediation prior to the expiration of the [45] days]. Unless otherwise agreed, the parties will select a mediator from the CPR Panels of Distinguished Neutrals.

CPR Model Two-Step Negotiation-Mediation Clause with Designated Mediator Option

If the dispute has not been resolved by negotiation as provided herein within [45] days after delivery of the initial notice of negotiation, [or if the parties failed to meet within [20] days after delivery,] the parties shall endeavor to settle the dispute by mediation under the CPR Mediation Procedure [currently in effect OR in effect on the date of this Agreement], [provided, however, that if one party fails to participate as provided herein, the other party can initiate mediation prior to the expiration of the [45] days.] The parties have selected [insert name] as the mediator in any such dispute, and [he][she] has agreed to serve in that capacity and to be available on reasonable notice. In the event that [insert named mediator] becomes unwilling or unable to serve, the parties have selected [insert name] as the alternate mediator. In the event that neither person is willing or able to serve, the parties will agree on a substitute with the assistance of CPR. Unless otherwise agreed, the parties will select a mediator from the CPR Panels of Distinguished Neutrals.

CPR Model Two-Step Clause: Mediation and Arbitration

The parties shall endeavor to resolve any dispute arising out of or relating to this Agreement by mediation under the CPR Mediation Procedure [currently in effect OR in effect on the date of this Agreement]. Unless the parties agree otherwise, the mediator will be selected from the CPR Panels of Distinguished Neutrals. Any controversy or claim arising out of or relating to this Agreement, including the breach, termination or validity thereof, which remains unresolved [[45] days after initiation of the mediation procedure] [[30] days after the appointment of a mediator], shall be finally resolved by arbitration in accordance with the International Institute for Conflict Prevention & Resolution (“CPR”) Rules for Non-Administered Arbitration [currently in effect OR in effect on the date of this Agreement], by [a sole arbitrator] [three independent and impartial arbitrators, of whom each party shall designate one] [three arbitrators of whom each party shall appoint one in accordance with the ‘screened’ appointment procedure provided in Rule 5.4] [three independent and impartial arbitrators, none of whom shall be appointed by either party]; [provided, however, that if one party fails to participate in the mediation as agreed herein, the other party can commence arbitration prior to the expiration of the time periods set forth above]. The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§1 et seq., and judgment upon the award rendered by the arbitrator(s) may be entered by any court having jurisdiction thereof. The place of arbitration shall be [city, state].

CPR MODEL MINITRIAL CLAUSE

The parties will attempt in good faith to resolve any dispute arising out of or relating to this Agreement in accordance with the CPR Minitrial Procedure [currently in effect OR in effect on the date of this Agreement] and will enter into an initiating agreement in the form annexed to such Procedure.

INTERNATIONAL

CPR Model International Arbitration Clause


Any dispute arising out of, or relating to, this contract, including the breach, termination or validity thereof, shall be finally resolved by arbitration in accordance with the International Institute for Conflict Prevention & Resolution (“CPR”) Rules for Non-Administered Arbitration of International Disputes, by [a sole arbitrator] [three arbitrators, of whom each party shall appoint one] [three arbitrators, none of whom shall be appointed by either party]. Judgment upon the award rendered by the arbitrator(s) may be entered by any court having jurisdiction thereof. The seat of the arbitration shall be [city, country]. The arbitration shall be conducted in [language]. The Neutral Organization designated to perform the functions specified in Rules 5, 6 and 7 shall be [name of CPR or other organization]. 

CPR Model European Mediation Clause

The parties endeavor to resolve any disputes arising out of or relating to this Agreement by mediation under the CPR European Mediation Procedure [currently in effect OR in effect on the date of this Agreement]. Unless otherwise agreed, the parties will select a mediator from one of the CPR Panels of Distinguished Neutrals and, if they require it, shall notify CPR to initiate a selection process.


CPR Model European Minitrial Clause

The parties will attempt in good faith to resolve any dispute arising in connection with this Agreement in accordance with the CPR European Minitrial Procedure [currently in effect OR in effect on the date of this Agreement], without prejudice to other legal remedies which they may have. 


CPR Model Chinese Mediation Clauses Version One:

Any dispute arising under this Contract shall be settled by friendly consultation, assisted by mediation through the offices of the US-China Business Mediation Center (the “Center”) if one of the parties chooses to do so. The assistance of the Center may be sought by any party to this Contract and the procedures of the Center shall govern the non-binding mediation. Unless the parties otherwise agree, in the event that the dispute is not settled within 45 days of the commencement of the consultation, or within 30 days of the parties’ first meeting with the facilitator from the Center (whichever comes later), then such dispute shall be submitted for final and binding arbitration to the [...].

Version Two:

Any dispute arising under this Contract, that is not settled by friendly consultation, shall be submitted to non-binding mediation to the US-China Business Mediation Center (the “Center”). The mediation shall be conducted in accordance with the procedures of the Center, in a location agreed upon by the parties or, in the absence of agreement, in Beijing. The parties shall be represented at the first mediation session by a representative with authority to resolve the dispute, and a party’s good-faith participation in the first mediation session shall be a condition precedent to that party’s commencement of arbitration or litigation in any forum. Unless the parties otherwise agree, in the event that the dispute is not settled within 30 days of the first mediation session, or within 45 days of a party’s demand for mediation (whichever comes later), then the dispute shall be submitted for final and binding arbitration to the [...]

CPR International Model Multi-step Dispute Resolution Clause

Article __

Any dispute arising out of or relating to this Agreement, including the breach, termination, validity, interpretation and performance thereof (“Dispute”)[1] shall be resolved in accordance with the procedures specified in this Article 00, which shall be the sole and exclusive procedures for the resolution of any such Dispute.

(A) Negotiation

The parties shall attempt to resolve any Dispute promptly by negotiation between executives who have authority to settle the Dispute and who are at a higher level of management than the persons with direct responsibility for administration or performance of this Agreement. Any party may give another party written notice of any Dispute (“Notice”). Within [202] days after delivery of the Notice, the receiving party shall submit to the other a written response. The Notice and the response shall include (a) a short statement of each party’s position and a summary of arguments supporting that position, and (b) the name and title of the executive who will represent that party and of any other person who will accompany the executive. Within [403] days after delivery of the Notice, the executives of both parties shall confer at a mutually acceptable time and place, and thereafter as often as they reasonable deem necessary, to attempt to resolve the Dispute. [All reasonable requests for information made by one party to the other will be honored.] [If the Dispute has not been resolved by these persons within [504] days after delivery of the Notice, the Dispute shall be referred to more senior executives of both parties who have authority to settle the Dispute and who shall confer in the same manner to attempt to resolve the Dispute.]

(B) Mediation

If the Dispute has not been resolved by negotiation in accordance with paragraph (A) within [505] days after delivery of the Notice, [or if the parties failed to confer within [40] days after delivery of the Notice], [or if the party receiving the Notice failed to submit to the other a written response within [20] days after delivery of the Notice], [or at any time if one party expressly refuses to participate in the negotiation in accordance with paragraph (A)6], then the parties shall endeavor to settle the Dispute by mediation under the CPR Mediation Procedure [Or: the CPR European Mediation Procedure (1996)] then currently in effect [Or: in effect on the date of this Agreement7]. Unless otherwise agreed, the parties will select a mediator from the CPR Panels of Distinguished Neutrals [and, if they require it, shall notify CPR to initiate a selection process].

If the Dispute has not been resolved by mediation within [358] days after appointment of the mediator, [or at any time if one party expressly refuses to participate in the negotiation or mediation in accordance with paragraphs (A) and (B)9], then either party may[10] submit the Dispute to arbitration as the exclusive means of resolving it in accordance with paragraph (C). All communications during the negotiation and mediation pursuant to paragraphs (A) and (B) are confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence and any additional confidentiality and professional secrecy protections provided by applicable law.[11]

(C) Arbitration

Any Dispute not resolved through negotiation or mediation in accordance with paragraphs (A) and (B) shall be finally resolved by arbitration in accordance with the CPR Rules for Non-Administered Arbitration of International Disputes then in effect [Or: in effect on the date of this Agreement12] by three arbitrators, one appointed by each of the parties, and the third arbitrator who shall act as chair of the Tribunal [Or: a sole arbitrator] [Or: three arbitrators not appointed by the parties13]. The arbitration shall be held in [city, state, country]. The arbitration proceedings shall be conducted in the [specify] language. Notwithstanding any other provision in this Agreement, the law governing this arbitration agreement and the arbitration proceedings shall be the arbitration law of the place of arbitration.[14] Judgment upon the award may be entered by any court having jurisdiction thereof.

As is the case with any dispute resolution clause, this multi-step clause could include additional paragraphs, covering questions such as provisional remedies, interim relief, tolling of statute of limitations, issues of continued performance, and right of termination.

_________________________________________________

1 In international cases with proceedings outside of the U.S., it is advisable not merely to rely on the comparatively firm U.S. case law on the shorter “any dispute arising out of or relating to this Agreement,” but additionally to spell out the full array of possible controversies.

2 The time periods chosen in this draft international clause are slightly longer than what CPR suggests in its existing domestic multi-step clause (i.e., as regards this initial time period, 15 days) and shorter than what CPR suggests in other international clauses (i.e., 30 days). The parties can always agree to extend the time limits on an ad hoc basis if they feel their negotiations are promising (just as they can always agree to shorten them).

3 Cf. fn. 2 supra. For this time period, CPR’s domestic multi-step clause suggests 30 days, and its international clauses suggest 60 days.

4 CPR’s domestic multi-step clause suggests 45 days for this time period.

5 Cf. fn. 2 supra. For this time period, CPR’s domestic multi-step clause suggests 45 days, and its international clauses suggest 60 days. If the negotiation procedure under paragraph (A) were to include the optional requirement of a second layer of negotiations by “more senior executives,” this cut-off date should be delayed to 60 days.

6 Unlike CPR’s existing domestic multi-step clause, the draft international clause allows either party to opt out (by way of express refusal to participate) and to take the dispute directly to arbitration. Under the existing clause, in the event that one party fails to participate, only the other party can accelerate the proceedings. Further, the draft clause’s standard “expressly refuses to participate” removes much of the ambiguity of, and is thus preferable to, the standard “fails to participate” in the existing clause.

7 “In effect” is preferable because it is unlikely that parties would want a mediation, for example, in 2005 conducted under procedural rules that were in effect but replaced, for example, in 1994. The old rules were presumably replaced for a good reason. In addition, it is generally accepted that the retroactive application of procedural rules (as opposed to substantive law rules) does not create a due process issue.

8 Cf. fn. 2 supra. CPR’s domestic multi-step clause suggests 30 days for this time period, and its international clauses suggest 45 days.

9 Cf. fn. 6 supra.

10 The combination of “may” in paragraph (B) and “shall” in the introduction to paragraph (C) is intended to eliminate the problem that, because parties occasionally do not want to infer that a dispute that cannot be settled by negotiation and mediation “must” be arbitrated, the formulation “may” alone is chosen (which can have the unintended side-effect to make the clause ambiguous as to whether arbitration is the exclusive dispute resolution mechanism).

11 Different from what is the case in CPR’s existing multi-step clause, this paragraph should relate to, and thus protect, both the negotiation and mediation step.

12 Cf. fn. 7 supra.

13 The CPR International Rules, in their Article 5.1, distinguish between these three kinds of tribunals.

14 Although this sentence is merely declaratory, it may help to prevent the losing party from attempting to have the award set aside in any other country but the country where the award was rendered.