Requirement To Enter Into ‘Friendly Discussion’ Before Arbitration Was Enforceable

Requirement To Enter Into ‘Friendly Discussion’ Before Arbitration Was Enforceable

In a controversial decision, at odds with the law, the High Court held that an obligation on parties to enter into “friendly discussion” before embarking upon arbitration was an enforceable term of the contract. In this case, the parties had entered into “friendly discussion” so, the arbitrators had jurisdiction.

Whilst this is not an employment case, it is a very useful term for commercial contracts and if used in employment contracts (i.e. before any referring claims and disputes to ACAS, this could give businesses a chance of being notified of and resolving disputes before third parties get involved.

The case is Emirates Trading Agency v Prime Mineral Exports Private Ltd [2014] EWCH 2104 (Comm) and can be accessed at the link below:
http://www.bailii.org/ew/cases/EWHC/Comm/2014/2104.html

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