Dispute Resolution

General Overview and Trends

Dispute resolution refers to all processes that are used to address disputes. It includes all dispute resolution methods and approaches from early resolution through formal tribunal or court processes. Examples of alternative dispute resolution include mediation and arbitration, both of which avoid the courtroom while attempting to resolve disputes between two parties.

Purpose of Dispute Resolution

Dispute resolution is a way of resolving disagreements without going to court. It is a good first step in trying to reach agreement about many kinds of problems.

Types of Dispute Resolution Processes

Dispute resolution processes fall into two major types: adjudicative processes, such as litigation or arbitration, in which a judge, jury or arbitrator determines the outcome. Consensual processes such as mediation, conciliation or negotiation in which the parties attempt to reach agreement. The four most common types of dispute resolution processes in Fiji are:

1. Negotiation

Many commercial disputes can be resolved quickly and privately through negotiation between the parties. This can happen at any point during the litigation process. Negotiation will usually be handled by your solicitor, perhaps by letter or telephone call. Alternatively, a roundtable meeting between the parties and their lawyers may be arranged, where positions can be discussed, and a settlement agreed.

2. Mediation

Mediation is very commonly used for commercial disputes. It involves the parties and their lawyers meeting with a trained mediator who acts as a neutral third party to encourage a settlement. This usually takes place over a single day or half day and can be a very effective way of agreeing a settlement, allowing the parties to stay in control of the outcome.

3. Arbitration

Arbitration can be used where the parties cannot agree a settlement but would prefer to avoid the time, cost and publicity associated with court proceedings. An arbitrator can be appointed either by the parties or by a professional body that both sides have agreed on. They will hear evidence from both parties, then make a legally-binding decision to resolve the dispute. Both parties must agree to abide by the arbitrator’s decision before starting the process.

4. Court litigation

Where a settlement cannot be agreed, litigants will need to turn to court proceedings to resolve their dispute. A hearing date will be set and each party will need to prepare their case with the support of their legal team.

Importance of Dispute Resolution in Business

Litigation is rarely a welcome way to resolve commercial disputes. Effective dispute resolution helps minimise costs and damage to relationships arising from the commercial disputes that are an almost inevitable part of doing business. If informal negotiation fails to resolve a dispute, mediation or arbitration can be a much better option than litigation in court.

Commercial Dispute

Commercial dispute resolution involves ending a disagreement, usually by commencing legal discussions or court proceedings or by reaching a consensus between the parties. Commercial dispute resolution is the generic term used to describe the process of resolving disputes between one or more parties within a commercial context.

Commercial disputes are an unavoidable part of running a business. If a dispute is looming, its important to get the right help as soon as possible.

What is a Commercial Dispute?

If you’re a business operator, you may have experienced a commercial dispute. It could be an issue with a competitor, a copyright infringement, a contract disagreement, a leasing issue, supplier issues or a problem with a co-director or business partner.

When to seek advice for a Commercial Dispute?

Often, the earlier you seek legal help, the better off you will be. Even if the issue has not yet escalated into a dispute, it can be helpful to speak to your legal advisor. Early advice may also help to resolve the issue, and if not, you will have put some key building blocks in place, for example, making sure you can access critical information should the problem escalate.

How does Commercial Litigation and Dispute Resolution work?

Commercial litigation is essentially any type of legal action taken where there is corporate involvement. This legal action could relate to issues such as partnership disputes, contractual disputes, property disputes and other business disagreements.

In Fiji, to commence a commercial litigation, the standard practice is for the aggrieved party to send a ‘Demand Notice’ to the other party setting out its dispute and the claim. This is normally prepared by a lawyer or in-house head of businesses. However, it is better to seek independent legal advice so that all legal issues can be addressed in the first demand letter. The party against whom a claim is made needs to respond to the letter to confirm whether they accept the claim or not.

If the recipient chooses not to accept the claim, they have to provide reasons why, state which parts of the claim they’re disputing, provide any documentation to back their stance, and if they wish to make a counterclaim, they must provide details of it.

Once the claim is accepted or disputed, most parties choose to engage in Alternative Dispute Resolution (ADR) to avoid the costs and damages to business relationships that going to court would bring. If successful, an agreement will be achieved, and both parties will walk away with their agreed settlement.

However, if nothing is achieved through ADR, the claim will be taken to court, and both the Claimant and the Defendant will need to prepare and file the necessary documents for the hearing.

Once a judgement has been made, the parties will be instructed on how to comply with the ruling by their individual commercial dispute solicitors.

Mediation in Fiji

Purpose of Mediation

It clears up misunderstandings, determines underlying interests and concerns, finds areas of agreement and incorporates those areas into solutions devised by the parties themselves.

Benefits of Mediation

Parties have complete control over the settlement
Less stress as compared to litigation and arbitration
Mediation proceedings are confidential
The process resolves the grievance or dispute quickly
Cost – effective than adjudication
Strained relationships are often restored

The Fiji Mediation Centre

The Fiji Mediation Centre (‘Centre’) is involved in facilitating mediation through which members of public can resolve their disputes amicably. The Centre has accredited mediators available who have undergone mediation training.

Costs of Mediation

The fees schedule of the Fiji Mediation Centre is downloadable from:

FMC-Approved-Fees-Schedule_Scan_Website-Upload.pdf (fijimediation.org)

Types of Mediation Services at the Fiji Mediation Centre

Family mediation
Commercial mediation
Small case mediation – for claims less than $50,000 FJD

There is no limit to the type of disputes that can be mediated at the Fiji Mediation Centre.

Tips for including Mediation Provisions in Contracts

Consumers who intend to enter into agreements should have provisions on mediation in their contract or agreements. They could include the following provisions in their contracts as is usually recommended:

For use before a dispute arises:

All disputes, controversies or differences arising out of or in connection with this contract, including any question regarding its existence, validation and termination, shall be first referred to mediation in Fiji in accordance with the Mediation Rules of the Fiji Mediation Centre.

For use after a dispute has arisen:

All disputes, controversies of differences arising out of or in connection with this contract, including any question regarding its existence, validity or termination, may, notwithstanding the commencement of any other proceedings, be referred to mediation in Fiji in accordance with the Mediation Rules of the Fiji Mediation Centre.

Arbitration in Fiji

Arbitration in Fiji is governed by the Arbitration Act 1965 (Act). The Act was introduced in 1965 and applies to all arbitration where the place of arbitration is in Fiji and to the extent that the International Arbitration Act 2017 does not apply.

Arbitration Act 1965 – Salient Features

Under this Act, parties to a dispute must sign a ‘submission’ which is a written agreement between the parties to submit all present and future agreements to arbitration. The submission provides for the rules of arbitration as agreed between the parties. The Act specifies standard clauses that are implied in the submission unless a contrary intention is expressed in the submission.
Under the Act, the High Court of Fiji has jurisdiction to appoint arbitrator to settle disputes between parties in specified circumstances under the Act.
Arbitrators’ awards are final and binding but the Act empowers the Court to remit or set aside awards upon application.

International Arbitration Act 2017 – Salient Features

Fiji ratified the United Nations Convention on Recognition and Enforcement of Foreign Arbitral Awards 1958 (‘New York Convention’) on 27 September 2010. To meet its domestic obligations under the New York Convention, Fiji enacted and passed the International Arbitration Act 2017 on 15 September 2017 (‘IAA’) which came into effect on 4 December 2018. The IAA applies to all international arbitrations commenced on or after the commencement of the IAA under an arbitration agreement whenever made.

This Act is a comprehensive state-of-the-art legislative framework for international arbitration based on the UNCITRAL Model on International Commercial Arbitration 1985, with amendments adopted in 2006. It also incorporates international best practices in international commercial arbitration, including provisions adapted from the Australian International Arbitration Act, the Hong Kong Arbitration Ordinance and the Singapore International Arbitration Act.

The Act aims at promoting greater foreign direct investment in Fiji. It strengthens the existing legislative framework governing international arbitration in Fiji by implementing the core commitments of Fiji under the New York Convention to deal with international arbitrations and to enforce arbitral awards. The Act creates a more favourable and standardized legal environment for the conduct of international arbitration by incorporating the 2006 amendments to the Model Law.

The definition and form of the arbitration agreement is dealt with in detail in section 11 of the IAA and is based on Article 76 of the Model Law, Option 1. Section 12 imposes an obligation on Fijian Courts to refer parties to arbitration if the court is seized of a matter which is the subject of the arbitration agreement, unless it finds that the agreement is null and void, inoperative or incapable of being performed. This is based on Article 8(1) of the Model Law. Section 14 provides for the granting and enforcement of interim measures, which is based on Articles 17 and 17A-J of the Model Law. Section 22 of the Act empowers the arbitral tribunal to rule on its own jurisdiction and provides that an arbitration clause that forms part of a contract is separable from the other terms of that contract. This is based on Article 16 of the Model Law. Sections 22 to 23 provides for granting and enforcement of interim measures. These are based on Articles 17 and 17A-J of the Model Law.

Adaptation of Best Practices in the International Arbitration Act

The IAA also adapts international best practices as seen in the following provisions: Section 2 while defining an “Arbitral Tribunal” provides for the appointment of an “Emergency Arbitrator”. (This section is modelled on S.2(1) of the Singapore International Arbitration Act). Section 21 provides for liability and immunity of arbitrators, appointing authorities and arbitral institutions. (This section is modelled S.28(1) of the Australian International Arbitration Act and S.25A of the Singapore International Arbitration Act). Section 35 provides for representation in arbitral proceedings by permitting a party to appear in person or any other person of that party’s choice. (This section is modelled on S.29 of the Australian Arbitration Act). Section 45 provides for the confidentiality of the arbitration proceedings and awards in the arbitration. (This Section is modelled on S.18 of the Hong Kong Arbitration Ordinance). Section 55 provides for the effect of public policy in relation to interim measure or awards, where such interim measures or awards are in conflict with or contrary to the public policy of Fiji, such interim measure or award may be refused enforcement. (This Section is modeled on ss.8(7A) and 19 of the Australia International Arbitration Act). The Act came into force on 4th December 2018 and Rules have been framed and published as High Court (Amendment) Rules 2018. The Act has been commented upon as one of the most advanced and up-to-date legislative regimes for international arbitration in the region, if not internationally. The Act enhances Fiji’s reputation as a place for international arbitration and business, and can serve as a template for promotion of international arbitration in the Pacific Region.

Non-Arbitrable Disputes

In Fiji, there are certain disputes that, by law, may not be referred to arbitration. The Act sets out the framework for arbitration in the country and provides guidance on the types of disputes that are excluded from arbitration. The Act stipulates that the following disputes are generally not arbitrable:

Criminal Offences

Disputes involving criminal offences, such as cases of fraud, theft, assault, or other criminal acts, generally cannot be referred to arbitration. Criminal matters fall under the jurisdiction of the criminal justice system and are typically dealt with by the courts.

Family Law Matters

Disputes related to family law matters, including divorce, child custody, and maintenance, are generally not arbitrable. Family law matters are typically within the jurisdiction of the family courts and are governed by specific laws and procedures.

Certain Public Interest Disputes

Some disputes involving public interest or matters of public policy may be excluded from arbitration. These can include disputes involving the enforcement of statutory rights, constitutional issues, or matters affecting public welfare or safety.

Immigration and Employment Matters

Disputes related to immigration, work permits, or employment matters governed by specific labor laws may be excluded from arbitration. These issues often have statutory protections and administrative processes established to address them.

Appeal or Review of Arbitration Proceedings and Awards

In Fiji, the appeal or review of arbitration proceedings and awards in local courts is generally limited. The Act establishes the legal framework for arbitration in the country and sets out the grounds and procedures for challenging or setting aside arbitration awards.

The grounds for challenging an arbitration award in Fiji are generally more limited compared to the grounds for appealing a court judgment. The Act provides specific grounds for setting aside an award, which include:

The party making the application was under some incapacity or the arbitration agreement is not valid.
There was a lack of proper notice of the appointment of an arbitrator or the arbitration proceedings.
The award deals with matters beyond the scope of the arbitration agreement.
The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or with the law of Fiji.

An application to challenge or set aside an arbitration award must be made to the High Court of Fiji. The court has the authority to review the award and determine whether the grounds for setting it aside exist.

The court’s review of an arbitration award is generally limited to procedural matters and the grounds specified in the Act. The court does not typically review the merits of the case or substitute its own judgment for that of the arbitral tribunal.

Once an arbitration award is confirmed and not successfully challenged or set aside in the High Court, it becomes final and binding on the parties. The court’s role is primarily to ensure that the arbitration proceedings were conducted fairly and in accordance with the law.

The availability and extent of court review may depend on the specific provisions of the arbitration agreement, any applicable institutional rules, and the circumstances of the case.

Confidentiality of Arbitration Proceedings

Arbitrations are generally confidential. This means that the proceedings, including hearings, documents, evidence, and the arbitral award, are generally not open to the public. The level of confidentiality in arbitration can be further defined and agreed upon by the parties. The arbitration agreement or rules chosen by the parties may include specific provisions regarding the confidentiality of the proceedings.

Courts in Fiji are generally supportive of maintaining the confidentiality of arbitration proceedings and will respect and enforce the agreed-upon confidentiality obligations, unless there are exceptional circumstances or legal requirements compelling disclosure.

There may be limited exceptions to confidentiality in certain circumstances, such as when disclosure is required by law or necessary for the enforcement or challenge of an arbitration award.

The extent of confidentiality can vary depending on the specific arbitration agreement, institutional rules, or any relevant laws applicable to the dispute. Parties should carefully consider and clearly define the confidentiality provisions in their arbitration agreements to ensure their expectations regarding confidentiality are properly addressed.

Commercial Litigation Procedure in Fiji

Main Steps in Commercial Litigation Procedure

In Fiji, the main steps in a commercial litigation procedure typically involve the following:

a. Pleadings

The plaintiff files a statement of claim, which sets out the facts, legal basis, and relief sought.

The defendant files a statement of defense, responding to the allegations made by the plaintiff.

b. Discovery

Both parties exchange relevant documents and information related to the dispute.

c. Pre-Trial Conference

The court may schedule a pre-trial conference to discuss and narrow down the issues, explore the possibility of settlement, and set timelines for further proceedings.

d. Trial

Each party presents their case through witness testimony, documentary evidence, and legal arguments. The court evaluates the evidence and arguments presented by both sides.

e. Judgment

The court delivers its judgment, which may include a decision on liability, damages, and costs. The judgment is typically based on the interpretation of the law, evidence, and precedents.

f. Enforcement

If the judgment requires the losing party to pay damages or take specific actions, the winning party may initiate enforcement proceedings to ensure compliance. This may involve seeking court orders to seize assets, garnish wages, or take other appropriate measures.

It’s important to note that the specific procedures and timelines may vary depending on the complexity of the case, court rules, and the judge overseeing the litigation. Additionally, alternative dispute resolution methods, such as settlement negotiations or mediation, may be pursued at any stage of the litigation process, potentially leading to a resolution outside of court.

Advantages and Disadvantages of Dispute Resolution Methods

Litigation

Differences:

Litigation involves resolving disputes through the court system, where parties present their cases before a judge. The court’s decision is binding on the parties involved.

Advantages:

Formal process: Litigation provides a formal structure with established legal procedures and rules.
Binding decisions: Court judgments are enforceable and legally binding.
Adherence to precedent: Court decisions can establish legal precedents for future cases.

Disadvantages:

Costly and time-consuming: Litigation can be expensive due to legal fees and lengthy court procedures.
Lack of control: Parties have limited control over the process and outcome, as decisions are made by the court.
Public nature: Court proceedings are generally open to the public, which may not be desirable for parties seeking privacy or confidentiality.

Arbitration

Differences:

Arbitration involves resolving disputes through a neutral third-party arbitrator or panel of arbitrators. The arbitrator’s decision, known as an award, is generally binding on the parties involved.

Advantages:

Flexibility and control: Parties have more control over the process, including the choice of arbitrator, procedural rules, and confidentiality.
Expertise: Parties can select arbitrators with specialized knowledge in the subject matter of the dispute.
Enforceability: Arbitration awards are generally enforceable under international conventions, making them easier to enforce across borders.

Disadvantages:

Costs: Arbitration can still be costly, including arbitrator fees and administrative expenses.
Limited avenues for appeal: The grounds for challenging an arbitration award are generally more limited than those for appealing a court judgment.
Lack of precedent: Arbitration decisions do not establish legal precedents for future cases.

Mediation

Differences:

Mediation involves a neutral third-party mediator who assists parties in reaching a mutually acceptable resolution. The mediator does not impose a decision but facilitates communication and negotiation between the parties.

Advantages:

Voluntary and collaborative: Mediation encourages open dialogue and allows parties to actively participate in crafting a resolution.
Cost-effective: Mediation is often less expensive than litigation or arbitration.
Preserves relationships: Mediation can help parties maintain relationships and find creative solutions that meet their underlying interests.

Disadvantages:

Non-binding: The mediator’s suggestions or proposed solutions are not legally binding unless the parties reach a voluntary agreement.
Imbalance of power: If there is a significant power imbalance between the parties, mediation may not be an effective method for resolving the dispute.
Possible impasse: If parties are unable to reach a mutually agreeable resolution, they may need to pursue other dispute resolution methods.

Foreign Parties and Judgments

Instituting Commercial Litigation Proceedings in Fiji for Foreign Parties

The Fijian legal system allows for both domestic and foreign parties to access the courts and pursue litigation to resolve commercial disputes. Foreign parties can initiate commercial litigation in Fiji by following the established legal procedures and fulfilling any specific requirements for filing a claim. It’s important to note that certain considerations may apply to foreign parties engaging in litigation in Fiji:

Jurisdiction and Venue

Foreign parties should ensure that the Fijian court has jurisdiction over the dispute. This typically depends on factors such as the nature of the dispute, the location of the parties or assets involved, and any contractual agreements specifying the applicable law and jurisdiction.

Legal Representation

Foreign parties may engage legal counsel licensed to practice law in Fiji to represent them in court. Local legal representation can provide expertise in navigating the Fijian legal system, procedural rules, and court practices.

Service of Process

The plaintiff is responsible for ensuring proper service of process on the defendant. This involves delivering the legal documents, such as the statement of claim, to the defendant in a manner that complies with the rules of service in Fiji. The method of service may vary depending on the specific circumstances and any applicable international agreements.

Enforcement of Judgments

Foreign parties should consider the potential challenges and procedures involved in enforcing a judgment obtained in Fiji in their home jurisdiction or in other countries where the losing party’s assets may be located. The enforcement of foreign judgments in Fiji is governed by specific laws and procedures, and reciprocity of enforcement may depend on the existence of relevant international treaties or agreements.

Enforcement of Foreign Judgments in Fiji

Enforcement of a foreign judgment in Fiji is governed by the Foreign Judgments (Reciprocal Enforcement) Act 1935 and the common law principles of recognition and enforcement. The general steps involved in enforcing a foreign judgment in Fiji are:

Criteria for Eligibility

The foreign judgment must meet certain criteria to be eligible for enforcement in Fiji.

The criteria includes:

The judgment must be final and conclusive, meaning it is not subject to further appeal in the foreign jurisdiction.
The foreign court must have had jurisdiction over the dispute and the parties involved.
The judgment must not be contrary to public policy in Fiji.

Application for Registration

The party seeking to enforce the foreign judgment must apply to the Fijian High Court for registration of the judgment. The application should include:

A certified copy of the foreign judgment, along with any translation into English if necessary.
An affidavit or evidence affirming the authenticity of the judgment.

Court Review

The Fijian High Court reviews the application and considers any objections raised by the opposing party. The court may examine whether the judgment meets the eligibility criteria and if there are any grounds to refuse enforcement.

Registration and Enforcement

If the court is satisfied with the application, it will order the registration of the foreign judgment. Once registered, the foreign judgment has the same force and effect as a domestic Fijian judgment.

Execution

The party with the registered foreign judgment can then take steps to enforce the judgment in Fiji. This may involve initiating enforcement proceedings, such as seizure of assets, garnishment of wages, or other appropriate measures, in accordance with Fijian laws and procedures.

Opting for Mediation and Other ADR Mechanisms

The parties to an agreement in Fiji can opt for mediation and/or other alternative dispute resolution (ADR) mechanisms, and choose to exclude arbitration and litigation as methods of resolving disputes. Parties have the freedom to determine the dispute resolution process they prefer by including appropriate provisions in their agreements.

Including ADR Mechanisms in Agreements

Parties can specifically choose to include provisions in their agreement that promote the use of mediation or other ADR methods such as negotiation, conciliation, or expert determination. These provisions can outline the process, rules, and conditions for engaging in the selected ADR mechanism.

Ruling out Arbitration and Litigation

If parties wish to exclude arbitration and litigation entirely, they can expressly state in their agreement that any disputes arising from the agreement will be resolved exclusively through mediation or other ADR mechanisms. By doing so, they waive their right to pursue arbitration or litigation as means of dispute resolution.

Such agreements that exclude arbitration and litigation in favor of mediation or other ADR mechanisms are generally recognised and enforced by the courts in Fiji, provided they comply with the requirements of contract law and public policy.

Opting for mediation or other ADR methods allows parties to maintain greater control over the resolution process, promote collaboration, and work towards mutually satisfactory outcomes. These methods often focus on preserving relationships and finding creative solutions that may not be available through arbitration or litigation.

It’s important to carefully draft the dispute resolution clauses in agreements to ensure clarity and effectiveness. By incorporating mediation or other ADR mechanisms into their agreements while excluding arbitration and litigation, parties can facilitate a more cooperative and flexible approach to resolving potential disputes.

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