Dispute resolution mechanisms in “business to business relations” in Armenia

Abstract: The problem related to ADR functioning in Armenia has a crucial importance for further economic development. The institutional development in Armenia has formed a peculiar reality of “institutional consistency” in this field, an essential element of which is a fragile dividing line between formal and informal institutions. Business reality shows that in Armenia the usage of ADR in “business to business” relations is widespread. The matter is that mostly it takes a form of informal relations, and actually formal ADR institutions have become “unclaimed”. This fact creates serious obstacles for the Government which seeks to establish effectively functioning formal ADR institutions. Unless the reasons as to why informal ADR mechanism is in high demand are identified, it is obvious that it will not be possible to elaborate a feasibly justified policy in this field. The aim of the study is to have a general overview on the dispute resolution mechanisms in Armenia and to study opportunities for their efficient implementation. Particularly the study is focusing on the following questions 1. What is the theoretical background of contract enforcement 2. What are the theoretical costs of contract enforcement to businesses? 3. How disputes in B2B are being solved in Armenia? 4. What are the real costs the businesses face during dispute resolution 5. How the costs of dispute resolution stipulate selection between different resolution mechanisms