Navigating Commercial Disputes in Mediations in an Unprecedented Global Economic and Political Landscape
Whether it's a worldwide wheat shortage or a spike in energy prices, the current political framework is having broad and significant repercussions on supply chains, transport and financials generally. Commercial transactions have suffered directly as economic metrics have changed overnight.
September 16, 2022 at 11:30 AM
9 minute read
By Myrna Barakat Friedman
Since early 2020, with the start of the COVID-19 pandemic, the modern world has been living in a truly unique set of circumstances. Our daily lives, as well as most—if not all—of our business dealings, continue to be impacted. And just as we were starting to better digest and understand the "new normal", the world was hit with yet another somewhat unprecedented global crisis, namely the Russian invasion of Ukraine. It has highlighted the interconnectivity which marks our interactions across the globe. Whether it's a worldwide wheat shortage or a spike in energy prices, the current political framework is having broad and significant repercussions on supply chains, transport and financials generally. Commercial transactions have suffered directly as economic metrics have changed overnight. It has also become quasi-impossible to predict future prices and behavior. All of these factors have tended to motivate parties to turn to mediation to try to resolve their commercial disputes. At the same time, they have made mediating such disputes significantly more complex. Below I will explore those complexities and suggest some mediation strategies to address them.
Lack of Real Precedents and Unclear Judicial Outcome. Parties look to mediators to offer them an independent assessment of the strength of their legal arguments should the case move to an adjudicative process. Litigators counseling their clients may even view such guidance as the centerpiece of their mediation negotiating strategy. However, many disputes that have arisen during the pandemic crystalize issues that are new and for which judicial guidance is simply unclear. Consider for example shipment delays due to global closures that led to goods being received by a purchaser too late for their intended purpose or perishing in transit. Add to that the fact that, even had they been received in time, the purchaser would not have been able to forward such goods to end-consumers in a timely manner for similar reasons. We could spend hours scrutinizing the contracts, circumstances and applicable laws. Yet, the specific facts are likely to be such that it would be impossible to predict with any convincing reliability how a court would assess the unanticipated events and determine who bears the risk of such events. Many contracting parties may want to turn to the most common "go to" clause in unforeseen circumstances, namely the "force majeure" clause that we see in most commercial contracts. Do the COVID-19 facts fit the definition? If so, until when? How about the global repercussions from the Ukraine crisis? For the time being, the answer is simply "we don't know." A tough answer for parties and their counsel to accept but one that has generally become the correct one. Faced with such real uncertainties, mediators are unable to offer effective arguments regarding judicial guidance on these issues. Accordingly, a mediator's role has to shift to convincing parties and counsel to accept such uncertainty and avoid basing their negotiation strategy on judicial outcomes.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllShifting Sands: May a Court Properly Order the Sale of the Marital Residence During a Divorce’s Pendency?
9 minute readTortious Interference With a Contract; Retaliatory Eviction Defense; Illegal Lockout: This Week in Scott Mollen’s Realty Law Digest
Court of Appeals Provides Comfort to Land Use Litigants Through the Relation Back Doctrine
8 minute readTrending Stories
Who Got The Work
J. Brugh Lower of Gibbons has entered an appearance for industrial equipment supplier Devco Corporation in a pending trademark infringement lawsuit. The suit, accusing the defendant of selling knock-off Graco products, was filed Dec. 18 in New Jersey District Court by Rivkin Radler on behalf of Graco Inc. and Graco Minnesota. The case, assigned to U.S. District Judge Zahid N. Quraishi, is 3:24-cv-11294, Graco Inc. et al v. Devco Corporation.
Who Got The Work
Rebecca Maller-Stein and Kent A. Yalowitz of Arnold & Porter Kaye Scholer have entered their appearances for Hanaco Venture Capital and its executives, Lior Prosor and David Frankel, in a pending securities lawsuit. The action, filed on Dec. 24 in New York Southern District Court by Zell, Aron & Co. on behalf of Goldeneye Advisors, accuses the defendants of negligently and fraudulently managing the plaintiff's $1 million investment. The case, assigned to U.S. District Judge Vernon S. Broderick, is 1:24-cv-09918, Goldeneye Advisors, LLC v. Hanaco Venture Capital, Ltd. et al.
Who Got The Work
Attorneys from A&O Shearman has stepped in as defense counsel for Toronto-Dominion Bank and other defendants in a pending securities class action. The suit, filed Dec. 11 in New York Southern District Court by Bleichmar Fonti & Auld, accuses the defendants of concealing the bank's 'pervasive' deficiencies in regards to its compliance with the Bank Secrecy Act and the quality of its anti-money laundering controls. The case, assigned to U.S. District Judge Arun Subramanian, is 1:24-cv-09445, Gonzalez v. The Toronto-Dominion Bank et al.
Who Got The Work
Crown Castle International, a Pennsylvania company providing shared communications infrastructure, has turned to Luke D. Wolf of Gordon Rees Scully Mansukhani to fend off a pending breach-of-contract lawsuit. The court action, filed Nov. 25 in Michigan Eastern District Court by Hooper Hathaway PC on behalf of The Town Residences LLC, accuses Crown Castle of failing to transfer approximately $30,000 in utility payments from T-Mobile in breach of a roof-top lease and assignment agreement. The case, assigned to U.S. District Judge Susan K. Declercq, is 2:24-cv-13131, The Town Residences LLC v. T-Mobile US, Inc. et al.
Who Got The Work
Wilfred P. Coronato and Daniel M. Schwartz of McCarter & English have stepped in as defense counsel to Electrolux Home Products Inc. in a pending product liability lawsuit. The court action, filed Nov. 26 in New York Eastern District Court by Poulos Lopiccolo PC and Nagel Rice LLP on behalf of David Stern, alleges that the defendant's refrigerators’ drawers and shelving repeatedly break and fall apart within months after purchase. The case, assigned to U.S. District Judge Joan M. Azrack, is 2:24-cv-08204, Stern v. Electrolux Home Products, Inc.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250