Obligation to enter into ‘friendly discussions’ before commencing arbitration is held enforceable
By John MacKenzie
In a significant departure from the traditional English position, a contract obliging parties to enter ‘friendly discussions’ to resolve a dispute before commencing arbitration proceedings has been held to be enforceable. The court considered that the term ‘friendly discussion’ not only implies a degree of good faith, but also sets an identifiable standard. Arguably, this reduces the uncertainty as to the behaviour and procedures required of each party pre-litigation or arbitration.
As illustrated in Walford v Miles  2 AC 128, agreements containing clauses to compel parties to ‘negotiate’ or ‘discuss’ disputes before commencing arbitration or litigation have up until now been considered too uncertain to be enforced by the English courts.
In that case, an agreement to negotiate in good faith was deemed inherently inconsistent with the position of a negotiating party, and in another case — Sulamerica v Enesa  EWCA Civ 638 — an undertaking to ‘seek to have the dispute resolved amicably by mediation’ was held unenforceable because it did not define the parties’ rights with sufficient certainty…
Click on the link below to read the rest of the Shepherd and Wedderburn briefing.
News from Shepherd and Wedderburn
News from The Lawyer
Briefings from Shepherd and Wedderburn
The land and buildings transaction tax will replace stamp-duty land tax in Scotland from 1 April 2015.
The VAT payable on IBR advice provided by PricewaterhouseCoopers on the restructure of Airtours Holiday Transport was not recoverable.
Analysis from The Lawyer
With banking, personal injury and M&A all down, law firm mergers are in the bracing Scottish air