The Conflict of Cultures in Commercial Dispute Resolution

 

 

The conflict of cultures in international dispute resolution between businesses is more important than most people suspect. It may be a decisive factor in resolving disputes. The problem, today, is that legal advisors often recommend one-size-fits-all mechanisms to businesses, ignoring cultural differences.

For example, basing the assessment of an international dispute between two businesses on cost-benefit analysis and a purely legal basis – which is the status quo in modern practice – can be risky. The complexity of culturally sensitive elements that are relevant in business dealings cannot be disregarded when a dispute between two culturally different trading partners arises, as this can jeopardize the efficiency and effectiveness of their dispute resolution.

The participants’ cultural and legal background strongly influences how they perceive some of the procedural steps, applicable rules, as well as the authority of the decision-maker and the ultimate outcome of a dispute resolution mechanism. Disregarding this influence is like burying our head in the sand; sometimes nothing bad comes out of it, but occasionally the dispute resolution mechanism can completely lose its intended purpose.

Together with a group of researchers from the fields of sociology and psychology, my research addresses the need expressed by various industry sectors for a dispute profiling tool capable of assessing cultural differences in complex disputes. When ready, the tool will take into account the unique combination of social, psychological, and legal characteristics of disputes and, based on that information, recommend what we anticipate to be the most efficient avenue of resolving that dispute.

The planned dispute profiling tool will offer new possibilities to both the dispute resolution industry and the various industries using dispute resolution, which offers a net benefit to a number of major commercial markets. Aided by our tool, providers of dispute resolution services can provide an improved form of dispute management by connecting disputants to a procedure with the greatest chance of reaching a solution. Using the full range of state courts, arbitration, or other alternative dispute resolution mechanisms, the tool would also effectively serve access to justice by minimising procedural disagreements and maximising the expected acceptance of the resulting outcome.

The University of Canberra (UC) will host this large-scale, international and interdisciplinary project.  Canberra is a great place to be doing this work, due to the city’s culturally diverse and growing international business environment. Canberra is the kind of city that can sustain the services that major international firms depend on in their day-to-day dealings, making it a logical choice to base the project at UC.

Written By Dr Dalma R Demeter

Dr Dalma R Demeter is an academic at the University of Canberra, an international arbitrator, and a legal practitioner with over 15 years experience.

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