There are no perfect contracts. Quite so often, people who enter into contracts do so with sheer faith and optimism. In a handful of cases, parties view may be tainted by their emotions, feelings of unrealistic expectations of return on investment. The point that must be made here, however, is that the respective expectations of parties to a contract do not fully align; ditto their respective economic circumstances or power. What every party, however, expects is some profit, some ease of attaining an economic goal through collaboration.
With the aforementioned state of mind, hardly does anyone give a thought to the many imperfections that accompany the details of the signed document, willy-nilly. Yet every contract made by man has within it some legal and practical loopholes which will only become evident after the contract implementation begins.
Over the years, the courts and arbitral tribunals have adjudicated on contract disputes with the view to seeking the intendment of the parties. As the courts have said in a plethora of cases, a court will not make a contract for parties. The intentions of the parties remain paramount except in cases where there are statutory limitations to this freedom of contract. In the case of M.V. Panormos Bay v. Olam(Nig.) Plc. The Court of Appeal stated that “In applying the Latin maxim Pacta Sunt Servanda it is the duty of the court in construing a contract to give effect to the intention of the parties. The court can only discharge such duty where there is no statutory limitation…”
Sound as the foregoing proposition may appear, parties sometimes emerge from the courtrooms with less than what was available as solutions to their disputes. This usually, is attributable to the constraints of the practice and procedures of litigation. The outcome of litigation would usually be that one party has won and the other, lost. One party is happy; the other is unhappy.
What is often not glaring at the end of such trial is that both parties may just have lost a business, a relationship that has existed for some years or was being contemplated to exist for many years to come. It is immaterial that the court has compelled the contract to continue for as long as parties had legally committed themselves to. The practical position in such cases is that the soul of the business is gone. What is leftover is the remains of the business as preserved by law.
It is disheartening that the foregoing scenario significantly remains the same up to this day, because not many are enlightened on what solutions the ADR process of mediation provides. In its true sense, what commercial mediation provides is an opportunity to review contracts that have become unworkable. The parties who entered into the contract have yet another chance to review and to tell each other in the friendliest language what each had expected and what it is that the other party had done to frustrate the expectations.
Stories abound of small or new businesses that have collapsed under the weight of legal tussles. Promoters of such businesses either did not contemplate such challenges or lacked the financial muscle to carry through. If it was okay in times past for international businesses to go under, without capacity to salvage what is left of a faulty contract decision, not any more I suppose. Irrespective of size or financial muscle, what is important now is to retain the services of collaborative lawyers or mediation advocates who can easily assist parties to return to the negotiating table for a review under the guidance or facilitation of a mediator.
No matter the complexity of the dispute, a good mediator, working in collaboration with parties’ counsels, can assist parties to see the need to fashion a new or amended version of the contract in contention.
I am not unaware of the fears being expressed in some quarters that so long as parties are not compelled to appear at mediation, so long shall they treat the process with levity. I disagree to the extent that such loopholes have largely been plugged in domestic mediation, particularly those ordered by the courts. It is only a matter of time for such matters to straighten out one way or the other in international mediation.
International Mediation as fashioned out by the Singapore Convention is here to promote the ease of doing international business. Let all those who are discerning embrace the process.