Contract says binding arbitration, but the other side wants mediation—can I proceed and protect my rights under Manx law?

Dear Sir/Madam,

I read your query regarding your commercial dispute and the conflict between your binding arbitration clause and the other side's request to mediate. Given the Isle of Man jurisdiction, here is a preliminary overview of how you can proceed while protecting your rights:

Under Manx law arbitration act and common law principles, parties are generally free to agree to mediate even if a binding arbitration clause exists. The Isle of Man courts strongly encourage ADR. However you must ensure that agreeing to mediate is done without prejudice to your right to arbitrate if mediation fails. The biggest risk you face is the Limitation Period. Participating in mediation does not automatically stop the clock on the time limits for commencing arbitration. If you spend months mediating, you might accidentally pass the deadline to file for arbitration, leaving you with no remedy.

Strategy: It is often wise to file the Notice of Arbitration immediately to stop the clock, and then agree with the other side to pause the arbitration proceedings while you attempt mediation.

Enforceability of outcomes: Arbitral Award. This is powerful because the United Kingdom has extended the New York Convention to the Isle of Man, meaning your award is enforceable in over 170 countries.

Mediation is significantly less expensive and faster. If the other side is genuine, it is worth trying, provided you have secured your arbitration timeline first.

Recommendation: This requires a carefully drafted agreement to mediate that preserves your arbitration rights. I can guide you through the specific steps to ensure you don’t accidentally waive your rights under Manx law.

This is general guidance and not a substitute for professional advice.

Best regards