Resolving Legal Disputes in the United States: Litigation, Arbitration or Mediation


As Indonesian companies expand their businesses into the United States, the potential for conflict also increases. Many parties doing business in the United States opt to resolve their disputes through litigation in the U.S. court system. There are, however, alternatives to litigation. The two most common types of alternative dispute resolution are arbitration and mediation. Arbitration clauses are commonly found in many types of commercial contracts in which the parties agree on the rules governing where, how and by whom a dispute will be resolved. Parties also can choose to engage a neutral person to act as a mediator to help the parties find a solution to their dispute. It is important to understand the advantages and disadvantages of each in order to determine whether to resolve a dispute through litigation, arbitration or mediation.

Litigation -

Litigation is the use of the court system to resolve a dispute. The rules applied to a particular dispute will depend upon the jurisdiction and the court overseeing the litigation. Courts in the United States operate at the federal and state levels. Parties to a contract can, and often do, agree upon the location for any litigation relating to their contract and the law of the country or state that governs their contract. In both federal and state courts, the first step in a civil case is the initiation of a lawsuit. A plaintiff initiates a lawsuit by filing a complaint with the court and serving the complaint on the defendants(s). In response, the defendant will serve and file an answer (or, in some cases, a defendant will file a motion to dismiss one or more claims in the complaint).

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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