The provisions of Articles 10.5 and 10.6 apply with appropriate modifications to other proceedings whereby the parties request a third person to assist them in their attempt to reach an amicable settlement of their dispute.

 

COMMENT

 

1. Alternative dispute resolution

 

Before resorting to judicial proceedings or arbitration, parties may start negotiations or agree on conciliation or other forms of alternative dispute resolution. 

 

Under the Principles negotiations do not automatically suspend the limitation period. Parties who want the limitation period to be suspended should come to an express agreement to this effect. 

 

By contrast, this Article provides that conciliation and other forms of alternative dispute resolution cause a suspension of the limitation period. The definition of “alternative dispute resolution” as proceedings whereby the parties request a third person to assist them in their attempt to reach an amicable settlement of their dispute, is inspired by Article 1(3) of the 2002 UNCITRAL Model Law on International Commercial Conciliation.

 

2. Absence of statutory regulations

 

As only few countries have enacted statutes on alternative dispute resolution and rules for such proceedings are relatively rare, this Article refers to the provisions on judicial and arbitral proceedings, which have to be applied with “appropriate modifications”. This means that, in the absence of an applicable legal regulation, the commencement of proceedings of alternative dispute resolution is governed by the default provision in the second sentence of Article 10.6(1), the proceedings starting on the date on which one party’s request to have such proceedings reaches the other party. Since the end of a dispute resolution procedure will very often be uncertain, the reference to Articles 10.5 and 10.6, and in particular to the phrase ”until the proceedings have been otherwise terminated” in their paragraphs (2), is also to be applied with appropriate modifications. Thus, a unilateral termination of the dispute resolution procedure by one of the parties will suffice to terminate the suspension. A unilateral termination that is made in bad faith is subject to Article 1.7.

 

Illustration

 

The parties, a hospital and a supplier of hospital equipment, agree to submit disputes over prices to a board of mediation. Under the applicable rules a review by this board starts on the date on which one party submits a complaint to the other party, who then has to invite the board to review the case under the applicable rules. The mediation ends either when the board decides on the claim, or there is a settlement between the parties, or the claimant’s request is withdrawn.

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