Interpreting A Contractual Dispute Resolution Clause? Step In The Arbitrator's Direction

Dispute resolution provisions are a common feature of commercial contracts and are often framed as a series of escalating steps/tiers leading towards arbitration ("step clause"). The principle reason to include a step clause in a contract is to obtain certainty on the resolution process in the event of a dispute. Certainty is achieved by ensuring that each stage specified within a step clause has the mechanics clearly laid out.

However, it is common for step clauses to be ambiguous, or lacking in procedural detail. This leads to unwanted surprises for parties when it comes time to enforce the clause, or requires parties to seek a determination of the meaning of the clause itself in the midst of a dispute, which is unhelpful, and also, reintroduces uncertainty.