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The effectiveness of alternative methods of commercial
dispute resolution: a comparative analysis of arbitration
and mediation
Kamila OMONJONOVA
Tashkent State University of Law
ARTICLE INFO
ABSTRACT
Article history:
Received February 2024
Received in revised form
28 February 2024
Accepted 20 March 2024
Available online
15 April 2024
Alternative dispute resolution (settlement) methods,
including any kind of out-of-court dispute resolution, are
gaining popularity in the Republic of Uzbekistan. This article
discusses the general concept of alternative dispute resolution
methods, their effectiveness, and distinctive features. The
article is also devoted to comparing alternative dispute
resolution methods such as mediation and arbitration. This
analysis revealed the similarities and differences between the
two procedures.
2181-
1415/©
2024 in Science LLC.
https://doi.org/10.47689/2181-1415-vol5-iss3/S-pp125-130
This is an open access article under the Attribution 4.0 International
(CC BY 4.0) license (https://creativecommons.org/licenses/by/4.0/deed.ru)
Keywords:
dispute,
dispute resolution,
conflict resolution,
mediation,
arbitration,
arbitration proceedings,
similarities and differences.
Тижорат низоларини ҳал қилишнинг муқобил
усулларининг
самарадорлиги:
арбитраж
ва
медиациянинг қиёсий таҳлили
АННОТАЦИЯ
Калит сўзлар:
низо,
низоларни ҳал қилиш,
келишмовчиликларни ҳал
этиш,
медиация,
арбитраж,
ҳакамлик
муҳокамаси,
ўхшашлик ва фарқлар.
Ўзбекистон Республикасида низоларни суддан ташқари
ҳал этишнинг ҳар қандай турини ўз ичига оладиган муқобил
низоларни ҳал қилиш усуллари оммалашмоқда. Ушбу
мақолада низоларни ҳал қилишнинг муқобил усулларининг
умумий тушунчаси, уларнинг самарадорлиги ва ўзига хос
хусусиятлари муҳокама қилинади. Мақола, шунингдек,
медиация ва арбитраж каби низоларни ҳал қилишнинг
муқобил усулларини таққослашга бағишланган. Ушбу таҳлил
орқали мазкур икки процедуралар ўртасидаги ўхшашлик ва
фарқлар кўриб чиқилди.
1
Tashkent State University of Law
2
Supervisor PhD Associate Professor, Department of Business Law, Tashkent State University of Law
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Эффективность альтернативных методов разрешения
коммерческих
споров:
сравнительный
анализ
арбитража и медиации
АННОТАЦИЯ
Ключевые слова:
спор,
разрешение спора,
урегулирование
конфликта,
медиация,
арбитраж,
третейское
разбирательство,
сходства и различия.
В Республике Узбекистан наблюдается растущая
популярность альтернативных методов урегулирования
споров, подразумевающих внесудебное их разрешение.
В
данной
статье
освещается
общее
понятие
альтернативных способов разрешения споров, оценивается
их
эффективность
и
анализируются
характерные
особенности. Кроме того, проводится сравнение таких
методов, как медиация и арбитраж, что позволяет выявить
как общие черты, так и отличия данных процедур.
At the present stage of development of civil society, the tendency towards
accelerated economic development is more clearly expressed, which, together with the
formation of new international and domestic relations in the field of entrepreneurship,
leads to an increase in the occurrence of civil legal conflicts. By implementing a certain
algorithm, it is necessary to conduct an in-depth analysis and quickly resolve the dispute
that has arisen to further preserve the partnership between the parties.
Until recently, appealing to the judiciary was one of the main and generally
accepted ways to resolve a legal conflict between subjects of civil circulation. However,
the workload of the judicial system, the length and cost of the judicial process, and the
lack of flexibility and confidentiality in resolving disputes leads to the inappropriateness
of using this instrument for protecting the rights and freedoms of subjects. In this case,
the parties are given the opportunity to use non-state forms of resolving legal conflicts,
which are provided for by current legislation, in other words, alternative methods of
resolving or resolving disputes.
An analysis of practice shows that alternative dispute resolution in the Republic of
Uzbekistan is only going through the initial stage of its development, especially
negotiation and mediation methods of conflict resolution. It should be noted that the
popularization of this phenomenon is facilitated by both the superior characteristics of
alternative methods of resolving civil disputes compared to the judicial method of
protecting violated rights, and the strengthening of the regulatory framework, for
example, the adoption of the Law of the Republic of Uzbekistan of July 3, 2018 No.482
“On mediation”.
The Government of the Republic of Uzbekistan, realizing that the system for
protecting the rights and legitimate interests of individuals and legal entities requires
improvement, also adopted Resolution of the President of the Republic of Uzbekistan of
June 17, 2020 No. 4754 “On measures to further improve alternative dispute resolution
mechanisms,” which specifies the need to create a unified system of pre
-trial dispute
resolution in government bodies, transform mediation, arbitration courts and
international arbitrations into effective alternative dispute resolution institutions that
are trustworthy for citizens and entrepreneurs.
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A number of legislative acts have provisions that promote the use of alternative
dispute resolution methods in order to improve partnership relations. For example, if the
plaintiff, before filing a statement of claim, did not comply with the claim procedure for
resolving a dispute with the defendant, when this is provided for by law for this category
of disputes or by agreement, then, in accordance with Article 107 of the Economic
Procedural Code of the Republic of Uzbekistan, the court leaves the statement of claim
without consideration.
However, it should be emphasized that these norms are fragmentary and
declarative in nature. In national legislation there is no such concept as “alternative
methods of dispute resolution”; there is no exhaustive list of conciliation procedures, just
as there is no indication of the methods that are permissible or recommended in a
particular conflict situation.
Speaking about the very definition of “alternative dispute resolution,” its origin comes
from the English language and generally means any type of out-of-court dispute resolution.
Scientists present different interpretations of it, for example, G.V.
Sevastyanov “under
alternative dispute resolution he understands the right to choose any method of resolving a
dispute not prohibited by law and resolving the conflict by the subjects of the disputed legal
relationship themselves based on a specific situation” [
1]. S.S. Sulakshin, in turn, understands
alternative dispute resolution as “a method of extrajudicial influence on a conflict, the
purpose of which is to eliminate the contradiction between the parties to the conflict or
minimize the negative consequences of the conflict for its participants” [
Other representatives of the scientific community in their definitions rely not only
on the term “method” of resolving a dispute, but also on terms such as “forms”,
“mechanisms”, “procedures”, “types”. For example, the scientific and practical manual by
N.I. Gaidaenko is called “Formation of a system of alternative mechanisms for resolving
disputes: a conflict-
free society as the basis for combating corruption” [
3]. Despite the
fact that scientists adhere to
different interpretations of the definition of “alternative
dispute resolution,” they agreed that these terms are synonymous.
The alternative dispute resolution procedure has a number of distinctive features,
such as:
1.
The court is a link that facilitates the procedure for alternative dispute
resolution, and not a div that resolves the conflict on the merits. This is expressed in
recommendations to the parties involved in the case to choose one or another form of
alternative dispute resolution, or the court can assist in the execution of decisions, for
example, on the basis of Article 50 of the Law of the Republic of Uzbekistan dated
October 16, 2006 No. 64 “On Arbitration Courts”, If the decision of the arbitration court is
not executed voluntarily within the period established by the decision of the arbitration
court, then it is subject to forced execution, which will be carried out based on a writ of
execution issued by the competent court.
2.
The systemic nature and interconnectedness of the actions of the parties who
have chosen an alternative method of resolving the dispute are also a distinctive feature
of this mechanism. Consistency is ensured by the chosen procedure for alternative
methods of dispute resolution, for example, in arbitration, the parties and arbitrators are
subject to the rules of arbitration [4]. The most important thing is to choose those
alternative dispute resolution procedures that are not prohibited by law.
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3.
It is necessary to distinguish alternative dispute resolution mechanisms from
various methods of “preventing” and “managing” a dispute. The dispute prevention
procedure is a set of planning and analysis actions aimed at building relationships in such
a way as to avoid a possible conflict, for example, partnership, which is the development
of a strategy for the relationship of the parties, within the framework of specific
contractual relations, aimed at resolving the problems that have arisen, the main goal of
which is the harmonization of relations between the parties [5]. Dispute management is
the practical actions of the parties to an already existing dispute, aimed at avoiding
litigation, minimizing costs, choosing the most appropriate dispute resolution procedure,
etc. [5]. Although the goal of dispute management, saving time and minimizing costs, is
similar to some alternative dispute resolution methods, the latter are more aimed at
resolving a dispute that has already arisen.
It is interesting, in our opinion, to compare two types of alternative methods of
dispute resolution, namely commercial ones, which require the parties to enter into legal
relations of their own desire: the procedure of mediation and arbitration.
Speaking about the mediation procedure, despite the fact that in the Republic of
Uzbekistan it received legislative recognition only in 2018, both national and foreign
scientists began to study this phenomenon long before this period.
E.I. Nosyreva understands mediation as the process of resolving disagreements
between the parties with the help of a third independent participant
–
an intermediary
(mediator) [6]. Sh.M. Masadikov believes that mediation is a way to resolve a dispute
between the parties with the help of an impartial mediator who assists them in reaching
a mutually acceptable agreement and does not have the right to make a decision [7].
The Law of the Republic of Uzbekistan of July 3, 2018 No. 482 “On Mediation” enshrines
the following concept: “Mediation is a method of resolving a dispute with the assistance
of a mediator on the basis of the voluntary consent of the parties in order to achieve a
mutually acceptable solution.”
The development of arbitration in the Republic of Uzbekistan began earlier than
mediation, since having formed an authoritative and highly qualified arbitration, the
image of the state acquires a worthy appearance in the national and international
business environment. The first step in this direction was compliance with various
international agreements, for example, on December 22, 1995, the Republic of
Uzbekistan acceded to the New York Convention of June 10, 1958 on the Recognition and
Enforcement of Foreign Arbitral Awards. Further, the adoption of the Law of the Republic
of Uzbekistan of October 16, 2006 No. 64 “On Arbitration Courts” and the creation in
2011 of the International Commercial Arbitration (Arbitration) Court at the Chamber of
Commerce and Industry of the Republic of Uzbekistan, as well as the Law of the Republic
of Uzbekistan dated February 16, 2021 No. 674 “On International Commercial
Arbitration”, served as an important stage in the development of arbitration proceedings
in the country.
What is meant by the mediation procedure and arbitration (arbitration)
proceedings, what are their differences? The mediation approach to dispute resolution
consists of the participation of a mediator, one or more, whose main task is to identify
points of contact between the interests of the parties and assist them in finding a
mutually beneficial solution [101]. A mediator can only be a neutral and impartial third
party who will mediate between the parties to the conflict, helping them to hear each
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other and build a constructive dialogue. The activities of a mediator can be carried out on
a professional or non-professional basis [8]. He does not make a decision on the merits of
the dispute; he only helps the parties come to a decision that will suit both parties.
Moving on to arbitration (arbitration proceedings), in a general sense it refers to
the process of resolving a dispute and making a decision by a court. In the Republic of
Uzbekistan there is an arbitration court, which is a non-state div that resolves disputes
arising from civil legal relations, including economic disputes arising between business
entities [9]. In addition to the arbitration court, international commercial arbitration
operates on the territory of the Republic of Uzbekistan as an alternative out-of-court
form of resolving commercial disputes arising between entities with a foreign element.
Below, a number of similarities and differences between mediation and arbitration
(arbitration proceedings) will be given, identifying the key features of each procedure:
–
both the mediation procedure and arbitration proceedings are methods of
alternative dispute resolution between the parties;
–
arbitration (arbitration proceedings) is the process of resolving a dispute by an
arbitration (arbitration) court and making an arbitration (arbitration) decision by the
court. In turn, mediation is a method of resolving disputes with the assistance of a
mediator based on the voluntary consent of the parties in order to achieve a mutually
acceptable solution;
–
speaking about third parties, the mediation process involves a mediator who
facilitates the adoption of a decision that suits both parties, while arbitration involves
resolving a dispute by an arbitrator, and arbitration proceedings by an arbitrator;
–
arbitration (arbitration proceedings) excludes the participation of the court in
resolving the dispute, but the mediation process does not exclude it;
–
the mediation process ends with the conclusion of a mediation agreement by the
parties to the dispute, while the result of arbitration is an arbitration decision, and
arbitration proceedings
–
a decision of the arbitration court;
–
both the mediation agreement and the arbitration decision (arbitration
proceedings) have the properties of binding and enforceable.
From the above it follows that arbitration (arbitration proceedings) is
characterized by greater certainty than the mediation procedure. However, as
E.N.
Ivanova states: “Currently, mediation is not very popular in resolving commercial
disputes, which are more likely to move into the realm of judicial and arbitration
proceedings. But mediation gives new opportunities to business; partners can conduct
commercial negotiations with the help of an impartial specialist instead of participating
in a formal process and receiving an abstract solution" [10].
To summarize, it cannot be argued that alternative dispute resolution methods are
always used as a counterweight to the traditional court system [102]. Often, they act as a
complementary mechanism, that is, if a compromise is not reached out of court, subjects
can subsequently resort to the protection of violated rights in court. The parties are given
an alternative choice based on the advisability of using one or another conflict resolution
mechanism.
In the business environment, subjects are increasingly aware of the need to reduce
the level of conflict in the process of civil disputes and improve the quality of trusting
relationships between partners, which raises the need to spread the use of alternative
methods of conflict resolution in practice.
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