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PES Contract Clauses > Dispute Resolution Example 2

19. SETTLEMENT OF DISPUTES

If a dispute arises under this agreement, the parties will try to resolve it directly by discussion. If they are not able to do so, they shall submit the dispute to mediation under the terms of the [applicable mediation/arbitration law] before the [venue]. If the conflict is not resolved by mediation, the parties may seek redress in the courts of [venue city, where the Ministry is located], for which the Participant waives any objection to jurisdiction and venue.

20. DAMAGES

In enforcing its rights under this agreement, the Ministry may pursue administrative, civil, or criminal penalties under the Constitution and applicable law.

Notes

Note that this example combines a dispute settlement clause with a forum selection clause.

Context of this Clause

• Participation agreement for a national REDD+ program
• Ecosystem service: forest carbon emissions reduction credits or conservation/restoration services expected to yield forest carbon emissions reduction or removal
• Single seller signing a government-provided form contract (which is backed up by detailed program guidelines) with a representative of the government ministry that administers the REDD+ program
• Source: Lessons Learned for REDD+ from PES and Conservation Incentive Programs, Examples from Costa Rica, Mexico, and Ecuador

About: Dispute Resolution

About: Forum and Choice of Law

Disclaimer: Materials on this site are meant to highlight issues that should be considered in PES transactions, not to provide a substitute for experienced legal counsel. It will be essential to engage legal counsel in conjunction with any PES transaction to ensure that any agreements reflect the latest developments in the field and comply with current local and national legislation.

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