Mediation Rules for Commercial Disputes

M. S. Siddiqui

https://www.daily-sun.com/printversion/details/542270/Mediation-Rules-for-Commercial-Disputes

20 March, 2021 12:00 AM

M. S. Siddiqui

Business is an interdependent affair involving many stakeholders. Business enterprises are part

of manufacturing or creating products and services. This is a kind of relay race. The concept of

supply chain management developed from specialization of job of making something which

again raw materials of other business and finally creating a good or service to deliver to

consumer for consumption. Businesses are dependent on upstream as source of raw material and

dependent on buyer at downstream market. The relationship is not for one day or cannot develop

overnight. The success of one business is part of a supply chain relationship and unable to break

and create new relationship over night. The nature of profession and cost of legal processes

encourage the mediation of disputes amicably under certain rules or conventions.

Businesses try their best to maintain the relationship despite disagreement over certain issues and

try to resolve to continue the relationship. The mediation, a category of Alternate Dispute

Resolution (ADR) is the appropriate method of resolve the disputed to continue the business

transaction. The parties in dispute also continue business transactions despite a dispute and

mediation process on certain issues. The main issue of mediation is determining damages and

there is not a critical dispute about liability or an issue of principle. All the parties in mediation

are ready to resolve the issue with mutually agreed compensation for damages without any legal

proceeding in the court.

Unfortunately, Bangladesh has no law for mediation although many developed and developing

countries have such law. We have long tradition of Shalish of many types of disputes in rural

societies. The business communities in many sectors have their own Shalish and conventional

rule usually followed by the members of that business society. It has social and inner community

methods of enforceability without any legal bindings.

Since Bangladesh has no mediation law but has long tradition of Shalish in the society, there

may be consensus on certain rules and regulations based on local and global rules and practices.

There are some global standard procedure and convention of mediation usually agreed upon by

business national and international businesses. It has some general principles like- (1) the process

is non-binding. Unless the parties otherwise agree, the mediators shall have no authority to issue

an enforceable award or judgment. (2) The mediators shall be neutral and impartial. The

mediators shall have no interest in the outcome of the dispute and have no current or anticipated

business or personal relationship with any party to the dispute. (3) The process shall be

conducted expeditiously. Each party representative will make every effort to be available for

meetings. (4) Parties usually agreed the terms of mediation in the business contract. (5) If the

respondent party has not previously agreed to mediation through a contract or other agreement,

they will agree to certain terms after any dispute arises.

The standard terms of mediation in agreement before any business deal or agreed upon after any

dispute occurs are on Mediator and place of mediation etc. All the parties will nominate mediator

and disclose their identities to other parties for their acceptance. The acceptance of mediators

shall be mutual and unanimous. A party may challenge a mediator candidate if it knows of any

circumstances giving rise to reasonable doubt regarding the candidate's impartiality. Before

appointment, the mediators will assure the parties of availability to conduct the proceeding

expeditiously. Upon retention of the mediators, the parties shall enter into an engagement

agreement for mediation.

The mediation methods are very formally informal among the mediators and disputing parties.

At the initial stage the mediators will sit to discuss the rule and process among themselves and

agree on certain other issues to follow during mediation. During the mediation, the mediators

shall take care to maintain a useful and creative joint approach and shall confer privately as may

be necessary and advisable.

Each party will submit to the mediators a written statement summarizing the background and

present status of the dispute. The parties may agree to submit jointly certain records and other

materials. The mediators may request any party to provide clarification and additional

information. The parties may also exchanges documents among themselves to opinion of others

and even submit joint statement of facts and figures to the mediators.

In certain cases, upon the agreement between parties, the mediators shall keep confidential any

written materials or information that are submitted. At the conclusion of the mediation process,

upon request of a party, the mediators shall return to that party all written materials and

information which that party had provided to the mediators without retaining copies, or else

certify that the destruction of such materials.

After the initial hearing from the disputing parties and going through though the documents and

papers the mediators will initiate and facilitate the negotiation for a mutually agreed settlement in

any manner the mediators believe is appropriate. The mediator shall help the parties to explore

alternative resolutions for mutually agreed settlement of the dispute.

Mediators may seek opinion from the parties to determine matters such as preferred subject

matter expertise, time constraints, potential conflicts of interest and geographic location at the

initial stage of mediation. In case of more than two parties in dispute, if a party withdraws from a

multiparty mediation but the procedure continues with the remaining parties.

There are many standard rule of mediation usually agreed upon by parties and mediators. The

Chinese mediation rules are very comprehensive and have been proven to be acceptable in China

and other parts of the world. Some of the rules developed by the Chinese are: (1) The mediators

shall control the procedural aspects of the mediation. The parties shall cooperate fully with the

mediators. (2) The mediators are free to meet and communicate separately with each party, at the

mediators’ discretion or at the request of a party. (3) The mediators shall decide when to hold

joint meetings with the parties and when to hold separate meetings. The mediators shall fix the

time and place of each session and its agenda, in consultation with the parties. There shall be no

record of any meeting. Formal rules of evidence or procedure shall not apply. (4) If any party

has a substantial need for documents or other information in the possession of another party or

for other information that may facilitate a settlement, the parties shall attempt to agree to terms

for the voluntary provision of such information. Should they fail to agree, either party may

request a joint consultation with the mediators, who shall assist the parties in reaching

agreement. At the conclusion of the mediation process, upon the request of a party that provided

documents or other material to one or more other parties, the recipients shall return those

documents and materials to the originating party without retaining copies. (7) Each party must be

represented at each mediation conference by a business executive authorized to negotiate a

complete resolution of the entire dispute, unless excused by the mediators as to a particular

conference. Each party may be represented by a business or legal consultant. (8) The mediators

may obtain independent expert advice and assistance, with the prior agreement of and at the

expense of the parties.

Even if settlement of all claims and issues is not possible, mediators may help narrow issues and

claims in the investigation and discuss with the parties the possibility of their agreeing

arbitration. Mediation is a risk-free, inexpensive, confidential and quick mechanism to evaluate

whether settlement can be achieved in these cases.

Bangladesh has an arbitration law framed with guide line of UN with a provision of enforcement

of arbitration in home and abroad. The expert has some reservation about certain rules and it is a

landmark modern law to resolve international business disputes. Business community may come

to an understanding on rules and methods of mediation until Bangladesh get a mediation law.

The writer is a Legal Economist. e-mail: mssiddiqui2035@gmail.com