Study On The Multi-tiered Dispute Resolution Clause And Its Effect

Multi-tiered Dispute Resolution Clause is a combination of mediation/negotiation and arbitration process. Comparing with the normal arbitration process, Multi-tiered Dispute Resolution Clause is more flexible. It makes it possible for people to fix a personalized dispute resolution clause according to their different situations. Currently, many arbitration centers have make Multi-tiered Dispute Resolution Clause as one of their model or suggested arbitration agreements. Such arbitration centers include CIETAC, HKIAC, ICC, etc. At the same time, with the development of Chinese economy, more and more national enterprises are involved in foreign investments, and they often incorporate Multi-tiered Dispute Resolution Clause in their commercial contracts when doing businesses.However, in practice, problems have raised as to the effectiveness of such Multi-tiered Dispute Resolution Clause. The most common problem occurs when people start the arbitration process without following the pre-arbitration process. Different countries have different views regarding to the validity of the arbitration process when such situation happens. As for China, currently there are few cases in this aspect. This article analyzes the different practices regarding to Multi-tiered Dispute Resolution Clause, analyzes the Chinese Courts or Tribunals’ likely view on dealing Multi-tiered Dispute Resolution Clause, and further suggests how Chinese government could do to improve the legal environment on Multi-tiered Dispute Resolution Clause, and how Chinese enterprises could do to enhance the legal effect of Multi-tiered Dispute Resolution Clause when they are doing businesses.