The Contractual Certainty of Commercial Agreements to Mediate in Ireland

Dr. Ronán Feehily

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Dispute resolution clauses have evolved over time becoming more complex and responding to judicial direction with court decisions resulting in more careful and detailed drafting. When investigating the enforceability of mediation clauses where one party refuses to comply, it is likely that the courts will determine their enforceability under general contractual principles as there is currently no legislative basis for enforcing such clauses in Ireland. While the evolution of jurisprudence regarding the enforcement of agreements to mediate would seem to be well established and largely understood by the judiciary in many jurisdictions, recent jurisprudence from England suggests that courts can still fail to understand how such agreements operate and there are instances when such agreements are not as certain as parties and advisors would like. Legal advisors must remain mindful of the organic nature of agreements to mediate and the need to revise the drafting of such agreements as new jurisprudence emerges. The article analyses issues such as the survival of a mediation clause on the termination of the agreement in which it is contained, the distinction between agreements to mediate and agreements to agree or negotiate, the importance of the certainty of the procedure for the mediation, the relationship between certainty and good faith and the requirement of completeness. The article proceeds to discuss the critical importance that such clauses are presented as conditions precedent to litigation and do not attempt to oust the jurisdiction of the courts, under Article 40.3 of the Irish Constitution and Article 6 of the European Convention on Human Rights. Remedies for breaching mediation clauses are discussed and recommendations offered as to how parties can enhance contractual certainty. The piece concludes with a legal and regulatory analysis that points to an emerging trend towards obligating lawyers to advise disputing clients on the mediation option.

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