AGREEMENT TO RESOLVE DISPUTE THROUGH ADR HELD TO BE ENFORCEABLE

Cable & Wireless plc v IBM United Kingdom Ltd [2002] 2 All ER (Comm) 1041

In Cable & Wireless plc v IBM United Kingdom Ltd [2002] 2 All ER (Comm) 1041 Mr Justice Coleman held that a clause which stated that ‘the parties shall attempt in good faith to resolve the dispute or claim through an alternative dispute resolution (ADR) procedure as recommended to the parties by the Centre for Dispute Resolution’ was not too uncertain to be enforced. The case demonstrates that the English courts are not always hostile to the recognition of ‘good faith’ obligations. The crucial point would appear to be the need to ensure that there is an enforcement mechanism, other than the courts, which will provide a solution in the event that the parties fail to resolve the dispute by their own efforts. The enforcement mechanism need not be ADR; it can be arbitration.