By Leonora Riesenburg

Alternative Dispute Resolution (ADR) is fast becoming a widely-accepted alternative to local court litigation. This is particularly true of arbitration.

Oddly, mediation is still heavily underused, which begs the question whether there is room for wider subscription in the UAE? In cultures where contracts are not always regarded as rigorous terms of engagement but rather as a framework intended to govern a commercial relationship, mediation is particularly well-placed to serve the settlement of differences at arm’s length before they escalate.

Mediation is not about winning or losing. Rather, it centres on commercial compromise. Ultimately, the aim is the re-establishment of constructive dialogue within the confines of a structured, private and confidential process.

To help the process along, a typically seasoned and independent mediator well versed in the subject matter will give the participants a helping hand. The mediators’ primary mission is to guide the parties to one or more suitable responses, and not to pass judgment. It’s not rocket science.

A powerful argument for mediation can be found in the fact that participants are actively involved in agreeing ground rules and dictating the pace of the process. This informs a less formal process and often a speedier outcome, which mitigates interruptions to business operations.

The exercise can serve to not only avoid often lengthy and costly proceedings, but also empowers parties to achieve a broader range of outcomes than are available if imposed by a court of a tribunal.

Mediation is particularly well suited to situations where ongoing business relationships are strained but not beyond cure. It has a better chance of success in preliminary stages of the dispute cycle, before parties are too heavily-invested and at a time when the appreciation of the facts of the dispute is at an optimum.

In recent times, some harsh lessons have been learnt and parties ever more concerned with the enforceability of an agreement, however it is arrived at. Whereas mediation is not in itself legally binding, a settlement agreement arising out of the effort typically is.
Enforceability issues can be overcome by party consent. It is universally accepted that settlement instruments, being creatures of contract, can be ratified in the local courts.

Is it commercially sound? The worst-case scenario is it simply doesn’t work. Neither party is prevented after mediation from pursuing claims that remain in tenancy in another permissible forum. The model facilitates commercial compromise; it does not compromise existing legal rights.

In any case, if mediation fails, a marked benefit can be obtained from a preliminary independent evaluation of the merits of the dispute by the appointed mediator, or, where possible, agreement on selective issues serving to narrow the totality of issues in dispute.

An awful lot of money is spent on the filing of heavily over-stated proceedings, to no end. The value of the exercise can be measured by the parties’ own investment in making it work. There is strong argument for exhausting more conciliatory ADR methods to steer disputes out of a system, particularly where a legal remedy is not required. The savings can be colossal. Mediation can serve a number of purposes during a cooling off period.

It’s an excellent tool when used constructively to preserve commercial interests on a number of layers. It is high time for the market to look at mediation to filter out disputes organically.

CW

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