ADR clauses have clear practical and commercial advantages: they can encourage parties to cooperate at an early stage and they support the amicable settlement of a dispute before it becomes costly and time-consuming (although an agreement may stipulate that settlement procedures and formal procedures are implemented side by side). In addition, ADR clauses can give the parties involved better control over a dispute and often allow those parties to repair business bridges and then continue in a cooperative business relationship. A final statement of caution by Anzen Ltd against Hermes One Ltd , which stipulated in a shareholders` agreement that each party could “submit” a dispute to arbitration. Their lordships held that clauses depriving a party of the right to conduct the trial should be clearly formulated and that there was a clear linguistic difference between a promise that disputes would be submitted to arbitration and a provision agreed upon by both parties that each party could “submit” a dispute to arbitration. As a result, when ignoring an ADR clause in an agreement and proceeding directly to formal proceedings, the injured party has been severely pressured to force it to take a break. Problems arise when a party, although there may be an ADR clause in an agreement, decides to proceed directly to a formal procedure and discontinue any agreed settlement phase, and the aggrieved party must consider whether it can enforce an ADR clause as a condition precedent. In emirates Trading Agency vs. Sociedade de Fomento , Popplewell J also addressed issues related to the lack of sufficiently friendly discussions before the opening of formal proceedings (the agreement required the opening of arbitration proceedings if friendly conversations did not allow a solution to be found “to an uninterrupted 3(3) month proceeding”. The judge declined to rule on whether “friendly discussion” was an enforceable condition, but commented on the type of discussion that would amount to friendly discussions, provided they were enforceable.
The English courts have only slowly recognised dispute or negotiation agreements settled amicably. In Itex Shipping v. China Ocean Shipping , Steyn J stated that a clause providing that “any dispute in this agreement shall be settled amicably” before it can be arbitrated is unenforceable. In Walford against Miles , the House of Lords held that a mere negotiating agreement was too uncertain to be enforceable and that a duty of good faith was not practicable and inherently incompatible with the position of a party to the negotiations. Friendship is used especially in relationships or agreements (especially legal proceedings such as divorce) whose importance ranges from simply “non-bellicose, consensual” to “quite friendly”. On the other hand, the same term is used kindly especially to mean “pleasant, kind”, such as a “kind smile”.  When negotiating a trade agreement, the parties are free to decide whether or not to include an ADR clause. When an agreement contains an alternative dispute resolution (ADR) clause, it often includes either a simple ADR clause or “escalation clauses” (sometimes referred to as “graduated” or “staggered” clauses). In the event of a commercial dispute, the parties to such an agreement must generally attempt to negotiate a settlement of the dispute. This could involve a single step (which could involve mediation under a simple ADR clause) or escalation of steps (usually good faith negotiations, when this does not result in the resolution of the dispute, discussions between the leaders of the parties` management teams, and then, if it fails, mediation). . .