AuthorDavid Dixon
Chapter 12
David Dixon
I. Introduction
This chapter discusses several forms of dispute resolution commonly available to non-US
prime and subcontractors under US government contracts, as well as to US prime and
subcontractors performing contracts outside of the United States. It first discusses alternative
dispute resolution processes, and primarily international arbitration. Next, it provides a general
roadmap for choosing the correct US court or administrative forum for resolving government
contract-related disputes in the United States legal system. The chapter also provides some
additional guidance regarding litigation outside the United States.
II. Alternative Dispute Resolution
Alternative dispute resolution (ADR) processes, such as arbitration or mediation, are
frequently used to resolve international contract disputes. This is generally so because of three
primary considerations: (1) the judicial process is expensive, time consuming, and unpredictable,
(2) there is a perception of bias in resolving contract disputes in the judicial system of a country
where one contract party is a national and the other is a foreigner, and (3) international
arbitration awards are enforceable in the local courts of 156 counties that are party to the New
York Convention on the Recognition and Enforceability of Arbitration Awards. Other
advantages to ADR include confidentiality of the proceedings (ADR proceedings are typically
private, whereas the judicial process is generally public), expertise of the decision maker (in
ADR, the parties can choose the decision maker and can use experts typically unavailable in the
judicial process), and finality of the decision (e.g., binding arbitration decisions cannot be
appealed and can be challenged onl y under very limited circumstances).
The two most common forms of ADR are arbitration and mediation. Both are voluntary
processes designed for quick and efficient dispute resolution, which employ neutral third parties
to oversee the process. Mediations are typically conducted with a single mediator who helps to
facilitate discussion and eventual resolution of the dispute through negotiation. Determinations
made by the mediator typically are not written and are non-binding. On the other hand,
arbitration is generally conducted with a panel of arbitrators. The most common procedure is for
each contract party to select an arbitrator, and those two arbitrators then select a third arbitrator.
The contract parties present the dispute to the three chosen arbitrators similar to how a trial is
conducted in a judicial process. The arbiters make decisions about evidence by majority vote and
give written opinions. Although arbitration can be non-binding, it is more common for the parties
agree to binding arbitration.
Because arbitration is the most common form of ADR for international contract disputes
and has the most procedural considerations and formalities, this section will focus on
international contract dispute resolution through the use of arbitration.
A. Key Contract Considerations
There are several key contract considerations that must be made prior to arbitrating an
international contract dispute. First, the parties must enter into an agreement to arbitrate the
dispute. This is most efficiently done in an arbitration clause during the initial contract
negotiation, but an arbitration agreement can also be made after the dispute arises. During the
negotiation of the arbitration agreement, the parties must determine, among other things, the
country in which to hold the arbitration and whether the law of that country prohibits arbitration

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