ALTERNATE DISPUTE RESOLUTION
The Parties recognize that from time to time a dispute may arise relating to either
Party’s rights or obligations under this Agreement. Any such dispute will be resolved
by the Alternate Dispute Resolution ("ADR") provisions set forth here, the result
of which will be binding upon the Parties.
To begin the ADR process, a Party first must send written notice of the dispute
to the other Party for attempted resolution by good faith negotiations between their
respective presidents (or their designees) of the affected subsidiaries, divisions,
or business units within twenty-eight (28) days after such notice is received. If
the matter has not been resolved within twenty-eight (28) days of the notice of
dispute, or if the Parties fail to meet within such twenty-eight (28) days, either
Party may initiate an ADR proceeding as provided herein. The Parties will have the
right to be represented by counsel in such a proceeding.
- To begin an ADR proceeding, a Party will provide written notice to the other Party
of the issues to be resolved by ADR. Within fourteen (14) days after its receipt
of such notice, the other Party may, by written notice to the Party initiating the
ADR, add additional issues to be resolved within the same ADR.
- Within twenty-one (21) days following receipt of the original ADR notice, the
Parties will select a mutually acceptable neutral party to preside over the resolution
of any disputes. If the Parties are unable to agree on a mutually acceptable neutral
party within such period, either Party may request the President of the CPR Institute
for Dispute Resolution ("CPR"), 366 Madison Avenue, 14th Floor, New York, New York
10017, to select a neutral Party pursuant to the following procedures:
- CPR will submit to the Parties a list of not less than five (5) candidates within
fourteen (14) days after receipt of the request, along with a Curriculum Vitae for
each candidate. No candidate will be an employee, director, or shareholder of either
Party or any of their subsidiaries or affiliates.
- Such list will include a statement of disclosure by each candidate of any circumstances
likely to affect his or her impartiality.
- Each Party will number the candidates in order of preference (with the number
one (1) signifying the greatest preference) and will deliver the list to the CPR
within seven (7) days following receipt of the list of candidates. If a Party believes
a conflict of interest exists regarding any of the candidates, that Party will provide
a written explanation of the conflict to the CPR along with its list, showing its
order of preference for the candidates. Any Party failing to return a list of preferences
on time will be deemed to have no preference.
- If the Parties collectively have identified fewer than three (3) candidates deemed
to have conflicts, the CPR immediately will designate as the neutral party the candidate
for whom the Parties collectively have indicated the greatest preference. If a tie
should result between two candidates, the CPR may designate either candidate. If
the Parties collectively identified three (3) or more candidates deemed to have
conflicts, the CPR will review the explanations regarding conflicts and, in its
sole discretion, may either (i) immediately designate as the neutral party the candidate
for whom the Parties collectively have indicated the greatest preference, or (ii)
issue a new list of not less than five (5) candidates, in which case the procedures
set forth in Sections 2(a) - 2(d) will be repeated.
- No earlier than twenty-eight (28) days or later than fifty-six (56) days after
selection, the neutral party will hold a hearing to resolve each of the issues identified
by the Parties. The ADR proceeding will take place in Chicago, Illinois. If the
Parties cannot agree, the neutral party will designate a location in Chicago, Illinois
other than the principal place of business of either Party or any of their subsidiaries
or affiliates.
- At least seven (7) days prior to the hearing, each Party will submit the following
to the other Party and the neutral party:
- a copy of all exhibits on which such Party intends to rely in any oral or written
presentation to the neutral party;
- a list of any witnesses such Party intends to call at the hearing, and a short
summary of the anticipated testimony of each witness;
- a proposed ruling on each issue to be resolved, together with a request for a
specific damage award or other remedy for each issue. The proposed rulings and remedies
will not contain any recitation of the facts or any legal arguments and will not
exceed one (1) page per issue. Neither side will seek as part of its remedy any
punitive damages.
- a brief in support of such Party’s proposed rulings and remedies, provided that
the brief will not exceed twenty (20) pages. This page limitation will apply regardless
of the number of issues raised in the ADR proceeding.
Except as expressly set forth in Sections 4(a) - 4(d), no discovery will be required
or permitted by any means, including depositions, interrogatories, requests for
admissions, or production of documents.
- The hearing will be conducted on two (2) consecutive days and will be governed
by the following rules:
- Each Party will be entitled to five (5) hours of hearing time to present its case.
The neutral party will determine whether each Party has had the five (5) hours to
which it is entitled.
- Each Party will be entitled, but not required, to make an opening statement, to
present regular and rebuttal testimony, documents or other evidence, to cross-examine
witnesses, and to make a closing argument. Cross-examination of witnesses will occur
immediately after their direct testimony, and cross-examination time will be charged
against the Party conducting the cross-examination.
- The Party initiating the ADR will begin the hearing and, if it chooses to make
an opening statement, will address not only issues it raised but also any issues
raised by the responding Party. The responding Party, if it chooses to make an opening
statement, also will address all issues raised in the ADR. Thereafter, the presentation
of regular and rebuttal testimony and documents, other evidence, and closing arguments
will proceed in the same sequence.
- Except when testifying, witnesses will be excluded from the hearing until closing
arguments.
- Settlement negotiations, including any statements made therein, will not be admissible
under any circumstances. Affidavits prepared for purposes of the ADR hearing also
will not be admissible. As to all other matters, the neutral party will have sole
discretion regarding the admissibility of any evidence.
- Within seven (7) days following completion of the hearing, each Party may submit
to the other Party and the neutral party a post-hearing brief in support of its
proposed rulings and remedies, provided that such brief will not contain or discuss
any new evidence and will not exceed ten (10) pages. This page limitation will apply
regardless of the number of issues raised in the ADR proceeding.
- The neutral party will rule on each disputed issue within fourteen (14) days following
completion of the hearing. Such ruling will adopt in its entirety the proposed ruling
and remedy of one of the Parties on each disputed issue but may adopt one Party’s
proposed rulings and remedies on some issues and the other Party’s proposed rulings
and remedies on other issues. The neutral party will not issue any written opinion
or otherwise explain the basis of the ruling.
- The neutral party will be paid a reasonable fee plus expenses. These fees and
expenses, along with the reasonable legal fees and expenses of the prevailing Party
(including all expert witness fees and expenses), the fees and expenses of a court
reporter, and any expenses for a hearing room, will be paid as follows:
- If the neutral party rules in favor of one Party on all disputed issues in the
ADR, the losing Party will pay 100% of such fees and expenses.
- If the neutral party rules in favor of one Party on some issues and the other
Party on other issues, the neutral party will issue with the rulings a written determination
as to how such fees and expenses will be allocated between the Parties. The neutral
party will allocate fees and expenses in a way that bears a reasonable relationship
to the outcome of the ADR, with the Party prevailing on more issues, or on issues
of greater value or gravity, recovering a relatively larger share of its legal fees
and expenses.
- The rulings of the neutral party and the allocation of fees and expenses will
be binding, non-reviewable, and non-appealable, and may be entered as a final judgment
in any court having jurisdiction.
- Except as provided in Section 9 or as required by law, the existence of the dispute,
any settlement negotiations, the ADR hearing, any submissions (including exhibits,
testimony, proposed rulings, and briefs), and the rulings will be deemed Confidential
Information. The neutral party will have the authority to impose sanctions for unauthorized
disclosure of Confidential Information.
- All ADR hearings will be conducted in the English language.