With the development of ADR, mediation has become a widespread dispute resolution method, preferred by many because its procedures are less complex and offer greater flexibility. Rather than submitting to an 'external' set of norms, the aim is to find a solution to a conflict situation that is mutually reinterpreted by the parties and considered acceptable by both parties.

The past decades have proven to market players that there is a much faster and more efficient solution than the "normal" civil litigation route in international economic and commercial disputes [1].[1].

The Anglo-Saxon legal system reacted earlier to changes and tried to find solutions to them more quickly than the continental legal system. In his 1995 publication "ADR and the Canadian Courts: a time for change", Supreme Court of Canada Justice George W. Adams wrote "The justice system would be unable to function if every dispute were to be brought before the courts." [2] [2]

In Europe, the regulatory framework for ADR had to wait until the turn of the millennium. In May 2000, the Council adopted a conclusion on alternative methods of dispute resolution in civil and commercial law, aimed at simplifying and improving access to justice. The Green Paper presented by the Commission in 2002 already mentions mediation as an applicable alternative dispute resolution method.

The so-called EU ADR Directive (Directive 2008/52/EC of the European Parliament and of the Council of 21 May 2008 on certain aspects of mediation in civil and commercial matters) focuses on facilitating access to alternative dispute resolution, consensual dispute resolution, a balanced relationship between mediation and judicial proceedings and ensuring cross-border dispute resolution.

"Mediation in civil and commercial matters can ensure the cost-effective and rapid out-of-court resolution of disputes through procedures tailored to the needs of the parties. Agreements reached as a result of mediation are more likely to be respected voluntarily and are more likely to maintain a fair and sustainable relationship between the parties. These benefits are even more pronounced in situations with a cross-border element." (Directive 2008/52/EC of the European Parliament and of the Council, Preamble)
(Az Európai Parlament és a Tanács 2008/52/EK Irányelve, Preambulum)

If we group the different options for dispute resolution, the out-of-court options include dispute avoidance, negotiation, mediation, facilitation and the use of arbitrary solutions. Legal solutions include arbitration and litigation.

The most commonly used classical ADR procedures are mediation, arbitration and negotiation. [3][3]

Arbitration

Arbitration is a decision made by an external person (arbitrator) where parties give up control over the outcome and the management of the process, but decide on its structure. A procedural method used in international commercial type cases, in disputes between states, in the resolution of business disputes. The so-called permanent arbitral tribunals and ad hoc arbitral tribunals can be mentioned as a specific feature.

In Hungary, Act LXXI of 1994 on Arbitration (hereinafter referred to as the "Act on Arbitration") regulates the field of law, both in domestic and international aspects. The Vbt. can best be compared to the model law of the UN Commission on International Trade Law. The European Convention of 21 April 1961 was promulgated by Decree-Law No. 8 of 1964, followed by the New York Convention, which was introduced into the Hungarian legal system by Decree-Law No. 25 of 1962. It is also important to mention the Moscow Convention, which governs the CIS countries and, in its time, made the use of arbitration compulsory for the settlement of disputes between Member States. Basically, it provided for the mandatory use of the procedure for the settlement of disputes between companies in the transport of goods, which is governed by the domestic legal norms of the countries and the provisions of the 1958 New York Convention.

In arbitration, the parties have much more leeway than in court proceedings: they have the freedom to choose the law (if they do not wish to use this option, the arbitral tribunal decides on the applicable substantive law), they are free to choose the language they wish to use, and they can use several languages of their choice. The proceedings are secret (with some exceptions), the parties are bound by confidentiality obligations and the decisions are not made public. Both in Hungary and internationally, the institution enjoys considerable prestige, as arbitral tribunals are the meeting places of eminent legal scholars. The virtue of the procedure lies primarily in its speed and the fact that it is not open to the public. Thanks to the latter, the reputation and business image of the parties are not jeopardised.

Based on international practice, the following advantages of arbitration are commonly mentioned:

• - special expertise (since the arbitrator or the members of the panel are not necessarily lawyers, but, for example in an investment dispute, an engineer or a price expert, the expertise is "first-hand", which can lead to a significant shortening of the procedure),
• - speed (due to the strictly limited nature of the remedies available, a final decision at first instance is reached sooner),
• - the relative "cheapness" of the procedure (due to the fact that expert arbitrators and final judgments at first instance significantly shorten the procedure and thus reduce the associated additional costs),
• - the non-public nature of the proceedings (usually an important aspect in international disputes, as the perception of a "litigant" company in a highly competitive market is usually not positive from a marketing or stock exchange point of view),
• - relatively simple enforceability (this is ensured not only by the rules of national law, but also by the relevant provisions of the 1958 New York Convention on the recognition and enforcement of arbitral awards)

In summary, arbitration is flexible, fast and efficient, and is one of the optimal dispute resolution forums for disputes arising in international commercial transactions. The most important feature of this method of dispute settlement, at least for comparative analysis, is that it can be used when the parties (at least) refer to the possibility of recourse to arbitration. However, in the absence of an agreement, the only binding dispute resolution procedure for the parties is through the national judicial system. However, in the absence of an agreement, the only binding dispute resolution procedure for the parties is through the national judicial system.

Mediation

Mediation has the potential to turn the parties towards each other, to develop a new and shared understanding of their relationship, by changing their relational system . It leaves the outcome of the dispute up to the parties, freeing them from accepting the necessity to take decisions (e.g. litigation), so that they themselves can set the rules for an acceptable solution, which can be implemented within their own sphere of influence, creating the conditions for resolving the dispute .[4]Mediation has the potential to turn the parties towards each other, to develop a new and shared understanding of their relationship, by changing their relational system. [5].

Mediation in international trade relations can be described as a structured negotiation process that can be applied to conflicts between companies and is a proactive and effective means of conflict management. It is conducted by the mediator and its objectives may include: developing and maintaining competitive advantage, preserving existing business relationships, protecting confidentiality and corporate image, developing flexible solutions, achieving greater satisfaction with the process, greater compliance with the outcome, lower time requirements and lower costs. If the parties are unable to settle their dispute out of court, they may bring an action as a party interested in the proceedings. It can be used to resolve conflicts between companies, businesses and their business partners, to help ensure cooperation, to resolve tensions and conflicts of interest, and to resolve internal relations and conflicts of interest. A mediator is a third person who is called upon to conduct a mediation process in an effective, impartial and competent manner. The mediator helps both parties to maintain a good relationship with each other, with satisfaction, recognition and acknowledgement of their faults and interests. The parties are free to decide on the place and time of the meeting and, in accordance with the law, on the conduct of the meeting. The aim is to find a solution without offending the other party, to prevent the business party from becoming vulnerable, to eliminate friction, to resolve disagreements, to manage conflicts in the joint working of organisations, and to eliminate conflicts in the micro-environment of the company.

At the start of the neutral venue procedure, the mediator will explain the procedure, record and agree the set of rules, the issues to be discussed and the relevant agenda. The parties concerned present their own point of view on the economic and business conflict. The discussion of the conflict begins by identifying and articulating the economic interests and needs of the parties and then exploring possible solutions to reach an acceptable agreement. The details of the settlement are put in writing by the mediator, the agreement is drafted and the parties sign the document. The particular advantage of mediation is that it offers the possibility of finding and securing a flexible solution, greater satisfaction with the process, resulting in a higher rate of settlement retention. In addition to financial resources, it does not require costly and time-consuming preparatory work, mainly without tying up human resources, and it ensures that existing contractual or business relationships are not lost. A mutually agreed solution to the conflict will allow existing business relationships to continue. A confidential and non-public mediation process can prevent unfavourable publicity and repair damage to the image of the parties. The aim is to explore the motives and motivations of the parties by developing a case-specific, flexible mutual agreement. Voluntariness of the parties involved in the procedure is key to a higher retention rate and mutual satisfaction (win-win position). Corporate resources are not burdened by lengthy, uncertain and time-consuming litigation. Voluntary mediation is quick: it takes only a few days or even weeks to decide whether the conflict can be settled or whether it is necessary to go to court. Its main advantage is that it is less time-consuming and costly, and it is self-controlled, i.e. the parties are in control of the case: they are effectively in control. As the parties are involved in the process on the basis of their own free will, it is in their own interest to find a common solution.

Comparison of dispute resolution methods

/Stephen B. Goldberg – Frank E. A. Sander – Nancy H. Rogers:
DISPUTE RESOLUTION Negotiation, Mediation, and Other Processes
Aspen Law & Bussiness – New York – 1999
4-5.p.based/

[1] Zsolt Szigeti: Lecture on International Commercial Arbitration

[2] “The legal system could not function if every dispute went to court.”Dispute Resolution 1995/5 London UK, 28.old.

[3] See Annex 1

[4] RISKIN 1994

[5] ALFINI-PRESS-STERNLIGHT-STULBERG 2001