Arbitration & Mediation

Alternative Dispute Resolutions –

 

• Alternative Dispute Resolutions are considerared as viable alternatives to litigation. They are deemed to provide for a less expensive solution in commercial disputes and other causes for litigation.

 

• Arbitration is considered to be private law. Mediation is considered a private and confidential process, and it may therefore be more attractive to parties wishing to continue to do business together.

 

• An Arbitration presents an advantage to the parties in that they have jointly decided that the arbitrator will almost certainly be an expert in the area of the dispute.

 

• Many contracts are written with the inclusion of an Arbitration Clause that can be triggered in the case of a disupte or disagreement. Arbitration may include an indication as tyo whether it is to be Binding or not binding on the parties, depending if the Arbitrator’s decision is deemed to be final.

 

• Contracts outlining a business transaction are often vague on the application of accounting sdtandards and practices in dealing with future dispute resolutions.

 

• Most contracts identify the location and country where the arbitration is to take place, and sometimes identifies one or more Arbitrator(s).

 

• Each Arbitrator will present to the Parties the process that he intends to follow and a rough schedule indicating for timing of various steps to the process.   He will generally self impose a timeline for his delivery of his judgement, once all the relevant representations have been completed. An arbitration process is usually well defined at the outset and both parties agree to it through the Arbitrator’s mandate letter

 

Bismuth Consulting Observations on the Arbitration Process-

• Contracts often name one or a panel of Arbitrators without even informing them.   Hence, when the triggered event occurs and the named  Arbitrator(s) is approached they may not be able or willing to take on the assignment due to time constraints or be conflicted out.

 

• Arbitrators have in general been experienced lawyers and retired judges.  They bring an understanding of the Court process and procedures, ass well as a wealth of experience in dealing with disputes.

 

• Arbitration procedures involving asset, liability and damage valuations in the context of generally accepted accounting principles applied in a particular jurisdiction and general industry or firm specific accounting practices call for a deep understanding of accounting and reporting matters which a professional accountant can bring to the Arbitration. Our recommendation is where warranted, to consider having a panel of arbitrators,  to include an experienced professional accountant who can bring industry specific knowledge and experience to the process. The procedural side of the Arbitration is usually handled by the person(s) having the legal background.

 

• Our intervention in an Arbitration can take the form of participating either as a member of the Arbitration panel or to assist either party in the gathering of information and presentation of their briefs to the Arbitrator(s).

 

• We help validate the quality of the financial information being transmitted, as well as participate actively in the presentation strategies leadingto a better prepared and substantiated position being put forward. This adds tremendous credibility in the eyes of the Arbitrator(s).

 

We have assisted a company in preparing and replying to Arbitration briefs, and accompanied company representatives to the Arbitration hearings.  Our role has consisted in assisting management throughout the process and to  work with some of their accounting personnel reporting to the VP Finance.