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.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from Shepherd and Wedderburn
News from The Lawyer
Briefings from Shepherd and Wedderburn
Implications for public sector pensions, and the local government pension scheme in particular.
The practical application of e-tools when a company suspects it has been the victim, or perpetrator, of dodgy behaviour.
Analysis from The Lawyer
With banking, personal injury and M&A all down, law firm mergers are in the bracing Scottish air