MPC Webinar series 24.04.2020 MEDIATION AS A DISPUTE RESOLUTION OPTION In the Midst of COVID-19 BY SHANTI ABRAHAM SHANTI ABRAHAM & ASSOCIATES Advocates & Solicitors |Mediators Adjudicators| Arbitrators
Speaker Profile Shanti Abraham Founder of Shanti Abraham & Associates (Kuala Lumpur) shantiabraham@saaas.com.my Arbitrator: FCIArb (Chartered Institute of Arbitrators) Mediator: SIMI Certified Mediator (Level 4) (Singapore International Mediation Institute) Investor State Mediator Adjudicator: CIPAA Adjudicator Adjudicator with Securities Industries Dispute Resolution Centre Mediates on Ad hoc basis and Online Mediation at SAAAS (MODRON Spaces) Panel mediator on Malaysian Mediation Centre, AIAC, Singapore Mediation Centre, MBAM Programme on Negotiation (Mediation & Advanced Mediation) (Harvard Law School)
DISPUTE RESOLUTION OPTIONS MEDIATION ADJUDICATION NEUTRAL EVALUATION EXPERT DETERMINATION LITIGATION ARBITRATION
What is Mediation ◦ Voluntary & Confidential & Flexible process ◦ Neutral Facilitator ◦ Issue Identification ◦ Help parties overcome impasses and explore solutions Mediation is governed by Statute : Mediation Act 2012 Communications during Mediation cannot be used in trial or arbitration as evidence. AIM OF MEDIATION: To understand what both parties need to find solution(s) they both can live with.
Mediation In Construction Disputes ◦ General claims (except with criminal/fraud elements) ◦ Establishing workable and sustainable payment schedules ◦ Loss & Expense ◦ Delay & Discharge ◦ Renegotiation of terms due to Covid 19 or future perils of a repeat of Covid 19 or similar.
How can it be initiated ◦ Parties can initiate Mediation via lawyers or via intra company communications. ◦ Mediation may be contractually required ◦ Mediation can be agreed to voluntarily in place of Arbitration proceedings ◦ Mediation can be agreed to voluntarily in place of Adjudication process under CIPAA ◦ Professionals can propose Mediation (Lawyers, Architects, QS, Accountants etc) ◦ Where: Ad hoc appointments, Malaysian Mediation Centre, AIAC, MBAM
Multi-party Mediations ◦ Mediations between several parties can be effective to resolve multi level disputes ◦ Employer- Main Contractor- Sub-contractor ◦ Main Contractor- Sub-Contractor- Sub-sub-contractor ◦ Value chain mediations ◦ Used also in insolvency mediations ◦ Benefits – brings all stakeholders to the same dispute resolution chamber ◦ Notionally faster that other processes – assumes all parties are relatively sensible and co-operative ◦ Require Consultants/Legal Advisors who are also able to manage all parties ◦ Post Covid-19 - New opportunity for central mediation managers/consultants/lawyers
Experts and documents in Construction Mediations ◦ Role of Experts in Construction Mediations continues to be valuable ◦ Parties can elect one neutral expert whose views can be deemed non- binding ◦ Mediation being confidential – views can be conveyed in a non-threatening and collaborative manner ◦ Documents are always welcome at Construction Mediation ◦ In reality parties will rely and refer to a Core Bundle which helps illustrate/explain the issues in contention
Cross Border Mediation ◦ Going to be a reality ◦ Post Covid-19 - Most likely Online Mediations ◦ Professional Mediators are already generally able to provide online mediation from their own offices or the institutions they are empaneled with. ◦ Opens options for Stakeholders in Construction Industry who have international/inter state partners. ◦ New Opportunities for Advisors/Consultants/Lawyers who can advise clients on the benefit of Cross Border Mediated solutions and strategize approaches.
Hybrid dispute resolution ◦ Mediations can result in partial settlements with remaining issues referred to Arbitration/Adjudication ◦ The key is having a dispute resolution strategy where decision makers understand that “winning” may not translate to cash flow and winding up a debtor is even less likely to result in positive cash gain post Covid-19.
Anecdote 1 from Construction Mediations ◦ Mediation between Employer and Main Contractor Dispute gap was over a million RM and had prevailed for over 2.5 years ◦ ◦ Architect did not want to get caught in between the two nor to be a witness as not a productive use of his time ◦ Architect requested a mediation and paid for the first day of Mediation (Week 1) – cheaper than his lost time as a witness in litigation/arbitration and doing witness statements ◦ Parties were hostile and a shuttle Mediation process was set up. ◦ Both Lawyers relatively co-operative but were skeptical as 3 court mediations failed. ◦ Architect conveyed his views to both parties in private sessions. Parties lawyers were always present. ◦ Parties willing to continue Mediation at their own costs. ◦ QS was appointed who provided non-binding report 7 days later on 2 nd Day of Mediation (Week 2) ◦ After discussions on the report- Gap in dispute went down to RM300k ◦ By 3 rd Day of Mediation (Week 3)- Gap in dispute was RM 50K ◦ Mediation continued via Telephone Conference – Gap closed and Parties resolved.
Anecdote 2 from Construction Mediations ◦ Mediation between Main Contractor and Sub-Contractor (Singapore) ◦ Mediation referred by Parties Lawyers to mediation institution ◦ Co- Mediation ◦ Dispute prevailed for over 3 years before matter brought to Mediation ◦ Parties were hostile but were prepared to be in same room ◦ Both parties lawyers present and both Lawyers co-operative. ◦ Informal Translation required as one party was not fully comfortable in English. Progress deliberately and respectfully slowed down so party could follow. ◦ Many issues raised which filled Mediators white board ◦ Mediation conducted with a mix of joint sessions, private sessions, lawyers and Mediators only and parties alone in conference with Mediators periodic support. ◦ Matter started at 9.30am. At lunch time- it was not looking hopeful – but Mediators, Parties & Lawyers persisted ◦ 3-4pm break through in issues achieved. Positive communication continued. ◦ Matter resolved by 5.30pm same day with parties signing a settlement agreement.
Thank you & Stay Safe Shanti Abraham www.shantiabraham.com Shanti Abraham & Associates Kuala Lumpur Email: shantiabraham@saaas.com.my
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