Roschier Insights Webinar, key takeaways: Technology disruption in the supply chain
In a recent webinar, Roschier’s experts discussed typical situations where disagreements may arise in connection with IT and other technology-related projects. In particular, the webinar focused on whether and how disputes relating to issues encountered in connection with technology supply chains should or could be avoided.
Not all disagreements can be avoided. It is essential to devote time and resources to bringing about a contract that meets the specific needs of the parties involved as well as the particular project. Thorough negotiations and scenario-based thinking will assist in reaching this goal. However, it is important to bear in mind that disagreements may arise regardless of a thoroughly drafted contract.
A contract is a practical tool to be used for a specific project. Most disputes arise from the discrepancy between the contractual provisions and reality. Too often, the negotiated contract is forgotten during the – often lengthy – project execution rather than used actively. Relevant project personnel should receive proper guidance on the contractual requirements and be encouraged to return to the contract and use it in the project execution, if needed. Lastly, circumstances and needs may develop from time to time. Parties should not hesitate to amend their contract so that it reflects the true needs of both the project and the parties.
Good and coherent communication is the key to effectively resolving disagreements. Minor disagreements are often unavoidable in large-scale IT projects. However, clear communication is the key to stopping the disagreement from evolving into an actual dispute, even if this requires that the other party is informed of the matters not meeting the agreed contractual requirements via official channels. Seeking an amicable solution is recommended, but sometimes it is also imperative to set out your position without any room for compromise. As a general rule, it is a good idea to (i) inform the other party clearly and coherently; (ii) escalate the situation gradually; and (iii) offer an adequate opportunity to react.
Disputes are resolved by people. IT disputes are often complex and fact-intensive. Even the most experienced arbitrators may have difficulty in understanding technical facts and details relevant to determining an IT dispute. Parties should be prepared to present understandable narratives and provide sufficient evidence to support their position. This can be challenging, as IT disputes typically involve issues that are difficult to prove and/or not documented.
A settlement should be considered as an option in resolving any dispute. Dispute resolution methods such as arbitration are merely tools to reach an understanding on a disagreement which the parties themselves cannot resolve. Even if earlier negotiations have not been productive, the approach to a possible settlement should be assessed throughout the proceedings.