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ACCA Applied Skills · Corporate and Business Law (Global) · Alternative dispute resolution mechanisms

Vexil Ltd wishes to settle a dispute with a supplier. Vexil wants a process in which a neutral person may propose settlement terms for the parties to consider, but the proposal will not bind them unless accepted. Which description fits best?

A conciliator's non-binding recommendation fits best. In conciliation the neutral person actively proposes settlement terms, but the parties are not bound unless they choose to accept them. Arbitral awards and court judgments are binding, so they do not match the description.

  1. AA binding arbitral award
  2. BA court judgment
  3. CA conciliator's non-binding recommendationCorrect
  4. DA unilateral contract termination

Explanation

In conciliation the neutral person takes a more active role than a mediator and may suggest terms, but the parties are free to accept or reject them. An arbitral award and a court judgment are binding, and contract termination is not a dispute resolution method.

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