Multi-tiered Dispute Resolution Clauses: Enforceability and Remedies

Joana Granadeiro contributed an article titled “Multi-tiered Dispute Resolution Clauses: Enforceability and Remedies” to the distinguished 40 Under 40: International Arbitration book. This publication, edited by Carlos González-Bueno, showcases the insights of 40 authors, all recognized as the brightest emerging talents in the field of international arbitration.

This article is about the so-called multi-tiered dispute resolution clauses (MDR clauses, for short), which are increasingly common in legal trade as a way to prompt, at some point in the existence and development of a dispute, the exploration of dispute resolution methods alternative to courts or arbitral tribunals. The author analyses the consequences for non-compliance with MDR-clauses, both from a conceptual perspective, as well as from a comparative perspective focused on how courts in Switzerland, France and Portugal have recently dealt with this issue. She ultimately takes the view that the breach of an MDR clause should be perceived as an issue of admissibility of the claim, and result in either the temporary stay of the arbitral proceedings while the pre-arbitral steps are attempted, or alternatively the conduction of those steps in parallel to the arbitration. She also notes that Portuguese courts have not yet taken a clear stance on this issue and that the absence of clear guidance in this respect is detrimental and likely conducive to largely diverging expectations of parties when it comes to the effects of MDR clauses and the consequences of their breach.