ADR clauses need some process.

The Legal Informant

The Victorian Supreme Court in WTE Co-Generation & Anor v RCR Energy Pty Ltd & Anor [2013] VSC 314 has held that a dispute resolution clause that requires parties to “meetto attempt to resolve the dispute or to agree on methods of doing so”is too vague to be enforced.

That provision required a meeting with alternative objectives; either to resolve the dispute or to agree on some further process. The parties could perform their contractual obligations by discussing process without any attempt to resolve the real dispute. The process to be adopted depended entirely on the parties reaching some further concurrence.

Vickery J observed at [46] that “ a valid dispute resolution clause does not require a set of rules to be set out in advance which directs the parties how an agreement is to be achieved, if agreement is possible. But, as a minimum, what is necessary for a valid and enforceable…

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