Contracts provide more and more often for referral clauses to arbitration or mediation in case of conflict arising between the parties due to the interpretation or execution of the contract. These clauses mean that the parties make a commitment to submit the conflict to mediation or arbitration instead of resorting to the courts.
It is possible to provide that the parties will at first try to settle the conflict through mediation, which offers a more flexible framework, then through arbitration if mediation fails.
It is important to note that a referral clause to arbitration prohibits any resort to the courts except in case of major irregularity. Thus, the party bound by an arbitration clause which would still want to file a judicial demand would see his demand rejected by the court.
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