Agreement on conducting a mediation procedure. Rules for mediation for international and maritime disputes. How does mediation begin?

In the Journal Sea Law No. 3/2021, an article the Advantages and Procedure for Resolving a Maritime Dispute Through Mediation was published. In the article, we discussed what mediation is, how this procedure takes place and what are its advantages in resolving a dispute.



Mediation is one of the ways to resolve a dispute. The usual ways to resolve a maritime dispute are negotiations, arbitration or litigation.



Mediation is a method of dispute settlement where disputing parties appoint one or more mediators. A mediator listens to the parties and helps them find a creative solution to the dispute. A mediator helps to find a solution that may not always be obvious to the parties.

Mediation begins with the conclusion between the parties of an agreement on conducting a mediation procedure (hereinafter referred to as the Agreement).



In this agreement, the parties choose a mediator, establish the rules for mediation, its cost and the procedure for distributing costs.


Mediation participants

The Agreement defines the parties to the dispute. The conflicting parties should determine who exactly is the participant in the dispute, whose interests are affected by the conflict? These people should be specified in the mediation agreement. The parties to the dispute are not always the same persons whose rights are legally affected by the dispute.

The real participant in the dispute can be not only the party to the contract (for example, a company that could be a plaintiff or defendant in court), but also its owners, parent companies, or people who have no legal connection with the party to the dispute, but who have a direct interest in resolving the dispute and power to make the final decision as to the fate of the dispute.

The task of the mediator is to find the real stakeholders of the conflict and involve them in the negotiations, indicate them as a participant in the dispute in the Agreement.



Dispute

The Agreement specifies the subject of the dispute. If there are several litigations between the parties to the dispute, there are several subjects of the dispute, or if the dispute is multi-stage and branched, then it is advisable to indicate all this in the Agreement and agree that the parties to the dispute will not create new suits for the period of mediation.

If there is no dispute between the parties, but they entered into a contact having a mediation clause, then it should be clear from the Agreement which contract is in question. This is necessary in order to avoid uncertainty as to whether mediation applies to a given contract or contracts.

Time and place of mediation

The Agreement determines the place and time of mediation. It is recommended to choose a neutral location as a place for mediation, with which none of the parties to the dispute is associated. A neutrally chosen location is necessary to maintain the confidentiality of information discussed during mediation, as well as to ensure that each of the parties feels safe and does not experience discomfort or pressure from being on the territory of the opponent.

The Agreement specifies the date and time of the mediation hearing. A hearing schedule can be set, which in turn can be referred to a court or arbitration in order to delay the trial.

The Agreement can also specify the general period of negotiations (mediation), after which the parties can start or continue litigation or arbitration if the mediation does not end with a settlement agreement.



Mediator

The Agreement determines the candidacy of the mediator or several candidates. If the dispute is of a multicultural nature, the mediation participants are of different genders, nationalities, or the dispute is very complex, then it is recommended to elect several mediators who can divide negotiations with different participants or on certain topics. Candidates for mediators may be proposed by the parties in the letters initiating mediation, and then fixed in the Agreement.

The Agreement defines the role and functions of the mediator, determines the responsibility of the mediator. In particular, it is established that the mediator is a neutral person who does not give advice to the parties to the dispute. At the same time, with the consent of the parties, the mediator may give such advice, which is not binding on the parties.

It is recommended to indicate that the mediator cannot be called as a witness in the case, both in relation to the circumstances discussed during the mediation, and in relation to the fact of mediation itself.


Fees and expenses

The section on fees and expenses establishes the remuneration of the mediator, the procedure for its payment. Usually the parties participate in the payment of the mediator's fee and related costs in equal shares.

Usually the fees of the mediator depend on the amount of claims.

Separately, the Agreement stipulates additional expenses of the parties for the organization of mediation, holding hearings, lunches and travel expenses, expenses for secretaries, notarization or translations.



Privacy issues

The confidentiality of the mediation process is its basic principle. In order to prevent parties from abusing the mediation procedure for obtaining information for subsequent resolution of the dispute in court or arbitration, care should be taken to resolve issues of confidentiality and relevance of information disclosed during mediation. Thus, the right of the parties to the dispute to request documents prepared in connection with mediation for purposes not related to mediation should be limited.

In addition, it is recommended to limit the list of cases when information or documents obtained during mediation can be disclosed. Such cases may be, for example, the consent of all participants in the dispute, the requirement of the law, the need to prevent a crime or harm to health, others (at the discretion of the parties).

Mediation principles

The Agreement often specifies the principles of mediation: voluntary nature of participation, confidentiality. It is also indicates that the legal force of a settlement agreement signed as a result of mediation arises only if it is signed by all parties to the dispute.

Applicable law

If the participants are residents of different countries, the dispute is transnational in nature, then it is recommended to determine the law applicable to the Agreement. At the same time, it is necessary to take into account the peculiarities of the enforcement of the Agreement in various jurisdictions.


A sample Agreement on conducting the mediation procedure and the regulation on fees can be downloaded on the website of the Solis Mediation Center: www.solismediation.com

This agreement has been developed taking into account the latest Russian and English mediation practice and can be supplemented based on the individual characteristics of a particular agreement or dispute.


Mediation Rules for International and Maritime Disputes

In the Mediation Agreement, the parties may choose mediation rules/terms that will supplement the Agreement. Such rules are proposed by various organizations.

For example, for maritime disputes, you can use the Terms of Mediation of the London Maritime Arbitrators Association (last revised in 2002) (hereinafter referred to as the LMAA Terms).

The LMAA Terms stipulate that the parties should elect a mediator within 14 days from the date of initiation of the mediation procedure, determines the procedure for initiating mediation.

If the parties are unable to select a mediator on their own, they may seek assistance in this matter from the President of the LMAA.

After the appointment of a mediator, the parties exchange positions on the case, transfer documents to the mediator. If necessary, the parties can limit the amount of documents transferred so that mediation is not too costly and long.

The LMAA Terms define the mediator's obligations, rights and principles of work.

With the consent of the parties, the mediator may hear witnesses in the case.

Under the LMAA Terms, the mediator may propose to the parties the terms on which they will settle the dispute, formulate those terms and invite the parties to discuss them.

If the parties so request, a mediator in a mediation under the LMAA Terms may issue the mediated agreement as an award on agreed terms, in which case the mediator will have the status of an arbitrator.

Please note that if the LMAA Mediation Terms apply, the mediation fees are set by the LMAA and it is recommended that they be requested from the Association in advance.

The LMAA website also publishes the mediation rules The LMAA/Baltic Exchange Mediation Terms 2009. They are somewhat different from the LMAA Mediation Terms 2002 in terms of the procedure for establishing and paying the remuneration to the mediator (see Article 13).

For international disputes, the UNCITRAL Mediation Rules (2021) can be used. They are published on the UNCITRAL website in Russian.

These rules also determine the procedure for opening the mediation procedure. The party is given 30 days to respond to the proposal to start the mediation procedure.

The parties may independently appoint one or more mediators or seek the assistance of an appropriate institution or person. When appointing a mediator, such an institution should take into account the professionalism of the mediator, the gender identity of the parties, the geographical and national characteristics of the dispute, in order to ensure that the mediator is neutral towards the parties.

The UNCITRAL Mediation Rules govern the protection of information transmitted during mediation. They define what data cannot be used as evidence in other proceedings.

The UNCITRAL mediation rules establish the procedure for concluding a settlement agreement based on the results of mediation, the procedure for its certification by the mediator, and also establishes that this settlement agreement can be used as evidence that it was the result of mediation and that it can be invoked to obtain judicial assistance in accordance with with applicable law.

The rules also clarify the procedure for paying fees for mediation, the role of the mediator in other proceedings, liability of a mediator, and offer standard mediation clauses to be included in the parties' agreements.

The 2021 UNCITRAL Mediation Rules are the most comprehensive and up-to-date collection of standard terms and conditions for international mediation, which can be supplemented by individual terms of the parties in the Agreement.

Thus, in order to resolve an international maritime dispute, an Agreement on conducting a mediation procedure can be drawn up using the recommendations of this article, as well as the mediation rules developed by the London Maritime Arbitrators Association or UNCITRAL.




Daria Zhdan-Pushkina,
Mediator of the Mediation Center Solis

This article was first published in the journal Maritime Law, No. 3/2022.

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