Keywords: mediation, mediator, mediator’s functions, participants in mediation, subject matter of the dispute, time and place of mediation, confidentiality of mediation.

Maritime Law Journal #3/2021 published an article “Advantages and procedure of maritime dispute resolution through mediation”. In it we talked about what mediation is, how this procedure takes place and what are its advantages in dispute resolution.

Mediation refers to one of the ways to settle a dispute. The usual ways to settle a maritime dispute are through negotiation, arbitration, or litigation.

Mediation is a way of settling a dispute in which the disputing parties choose one or more mediators (mediators). The mediator listens to the parties and helps them find a creative solution to the dispute. The mediator helps find a solution that may not always be obvious to the parties.

Mediation begins with the parties entering into a mediation agreement (the “Agreement”). In this agreement, the parties choose a mediator, establish rules of mediation, its cost and procedure of costs distribution.

Participants of mediation

The Agreement shall define the participants of the dispute. The conflicting parties must determine who the parties to the dispute are, whose interests are affected by the conflict. It is necessary to identify these people in the mediation agreement. The parties to the dispute are not always the same people whose rights are legally affected by the dispute.

The real party to the dispute may not only be a party to the contract (e.g. a company, which could be a plaintiff or a defendant in court), but also its owners, its parent companies or people who have no legal connection to the party in dispute, but who have a direct interest in resolving the dispute and have the authority to make the final decision regarding the fate of the dispute. The mediator’s task is to find the real stakeholders in the conflict and involve them in the negotiation, to name them as a party to the dispute in the Agreement.

Subject matter of the dispute

The Agreement specifies the subject matter of the dispute. If there are several court proceedings between the parties to the dispute, there are several subjects of the dispute, or the dispute is multistage and ramified, it is advisable to specify all this in the Agreement and to agree that the parties to the dispute will not create new processes for the duration of the mediation.

If there is no dispute between the parties, but there is an agreement, which the parties intend to submit to mediation, the mediation agreement should make it clear which agreement (or agreements) is being referred to. This is necessary in order to avoid uncertainty as to whether mediation applies to the contract or contracts in question.

Time and place of mediation

The Agreement defines the place and time of mediation. It is recommended that the place of mediation be a neutral location with which neither party to the dispute is connected. A neutrally chosen location is necessary to preserve the confidentiality of the information discussed during the mediation, as well as to ensure that each party feels safe and free from the discomfort or pressure of being on the opponent’s property.

The Agreement specifies the date and time of the mediation hearing. A timetable for the hearing can be set, which in turn can be referred to a court or arbitration to postpone litigation.

The Agreement may also specify a general negotiation (mediation) period, after which the parties may begin or continue litigation if the mediation does not result in a settlement agreement.

Mediator

The Agreement identifies a mediator or multiple mediators. If the dispute is multicultural, the participants are of different genders, nationalities or the dispute is very complex, it is recommended to elect several mediators, who can share the negotiations with different participants or on specific topics. Mediators can be proposed by the parties in the letters initiating the mediation and then enshrined in the Agreement.

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

It is recommended to specify that the mediator may not be called as a witness in the case, both with regard to the circumstances discussed in the mediation and to the fact of mediation itself.

Fees and Expenses

The section on fees and expenses sets forth the mediator’s fee and how it will be paid. Normally, the parties share equally in the mediator’s fees and related expenses.

Usually, the mediator’s fees depend on the amount of the claim.

Separately, the Agreement stipulates the parties’ additional expenses for mediation, hearings, lunches and travel expenses, secretarial costs, notarization or translations.

Confidentiality Issues

Confidentiality of the mediation process is its basic principle. In order to ensure that the parties do not misuse the mediation process in order to obtain information for the resolution of the dispute in court or arbitration, the confidentiality and relevance of the information disclosed during the mediation process should be carefully regulated. For example, the right of litigants to request documents produced in connection with mediation for purposes other than mediation should be limited.

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

Mediation Principles

The principles of mediation are often stated in the agreement: voluntary participation, confidentiality. It is also mentioned that a mediated settlement agreement becomes legally valid only if signed by all parties to the dispute.

Applicable law

If the participants are residents of different countries, and the dispute is of a transnational character, it is recommended to determine the law applicable to the Agreement. In doing so, it is necessary to take into account the specifics of the implementation of the Agreement in different jurisdictions.

A sample Mediation Agreement and fee clause can be downloaded from the website of the Solis Mediation Center: www.solismediation.ru

This agreement is developed taking into account the latest Russian and English mediation practices and can be amended on the basis of individual characteristics of a particular agreement or dispute.

Mediation rules for international and maritime disputes

In the Mediation Agreement, the parties can choose mediation rules to supplement the Agreement. Such rules are proposed by various organizations.

For example, for maritime disputes, the London Maritime Arbitration Association Mediation Rules (last adopted in 2002) (“LMAA Rules”) may be used.

The LMAA Terms specify that the parties shall elect a mediator within 14 days from the date of initiation of the mediation procedure, defining the procedure for initiation of mediation.

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

After the appointment of the mediator, the parties shall exchange positions on the case and hand over documents to the mediator. If necessary, the parties may limit the amount of documents handed over so that mediation is not too costly and time consuming.

The LMAA Terms and Conditions shall define the mediator’s duties, rights and principles.

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

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

If so requested by the parties, the mediator in mediation under the LMAA Terms and Conditions may formalize the mediation agreement as an arbitration award on agreed terms, in which case the mediator will have the status of arbitrator.

It is important to note that if the LMAA Mediation Terms and Conditions apply, mediation fees are set by the LMAA and are recommended to be requested in advance from the Association.

The LMAA/Baltic Exchange Mediation Terms 2009 are also published on the LMAA website. These differ slightly from the LMAA Mediation Terms of 2002 in terms of how mediation fees are determined and paid to the mediator (see Article 13).

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

These rules also define the procedure for opening a mediation procedure. A party is given 30 days to respond to a proposal to commence mediation.

The parties may appoint one or more mediators on their own or request the assistance of an institution or person. When appointing a mediator, such institution shall take into account the professionalism of the mediator, the gender identity of the parties, and the geographic and national characteristics of the dispute, so as to ensure that the mediator is neutral in relation to the parties.

The UNCITRAL Mediation Rules define a regime for the protection of information conveyed in the course of mediation. They define what data cannot be used as evidence in other proceedings.

The UNCITRAL Mediation Rules set out how a mediation settlement agreement shall be concluded, how it shall be certified by the mediator and stipulate that the settlement agreement may be used as evidence that it is the result of mediation and that it may be invoked for judicial relief under applicable law.

The rules also clarify the payment of mediation fees, the role of the mediator in other proceedings, the liability of the mediator and offer model mediation clauses for inclusion in the parties’ contracts.

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

Thus, a Mediation Agreement may be drafted to resolve an international maritime dispute using the recommendations of this article as well as the mediation rules drafted by the London Maritime Arbitration Association or UNCITRAL. ■