Filter Coffee #005

Mindful Mediation

Friends,

We’re 700 coffee drinkers strong already! If you’ve enjoyed my Sunday musings, do share this newsletter with your friends, family and colleagues. Here is a link you can click to do so:

As promised, this week’s edition is a deep dive into the art and science of mediation. 🔗 Last week, we covered several considerations around consumer protection, one of which was the notion of mediated settlements. I’ve summarized the emerging rules of the game here:

• We should expect to see the establishment of several mediation councils across India, including a panel of mediators with requisite qualifications and experience for each.

• When a consumer makes a complaint, the consumer court refers it to mediation.
  If parties arrive at a settlement, it is converted into an order by the consumer court.
  If settlement efforts fail, the case will be allowed to proceed in the “normal course”.

• While nearly all kinds of disputes can be referred to mediation, there are a few exceptions: Medical negligence leading to death or grievous injury; Allegations of fraud, forgery, fabrication of documents, impersonation, coercion; Criminal offences, and disputes involving public interest or numerous persons who are not parties before the commission

In my view, consumers should have been provided the choice of approaching the mediation council directly, which could then summon the other party to see if the dispute is capable of resolution. Instead, the rules dictate that the consumer is required to file a complaint before it can be referred to mediation. This is similar to the process where the civil courts refer disputes to mediation, in the hope of a settlement, before embarking on a full-fledged time and cost consuming trial. Fortunately, a consumer can still engage with the counterparty in a private mediation.

🤝 Demystifying Mediation

All this certainly illuminates mediation as an available alternative in dispute resolution, but what is it? I spoke with Mediator par excellence, Mrs Laila Ollapally, the founder of the Centre For Advanced Mediation Practice. ( 🔗 Visit their website here)

Laila practised in the High Court of Karnataka and Supreme Court of India for nearly 30 years before being captivated by mediation in 2007 when she was invited by the Chief Justice of Karnataka High Court to serve as the Founding Coordinator of the Bangalore Mediation Centre. She has mediated several hundred cases including complex commercial disputes referred by the Supreme Court and State High Courts. She has been nominated to The International Who’s Who Legal of Commercial Mediation and serves as a Panel member of Singapore International Mediation Centre, Kyoto International Mediation Centre & ADR Centre, Italy. Laila is a Weinstein Fellow with JAMS Foundation and member of the International Advisory Board, of the Global Mediation Panel, UNDP. She extensively trains Judges, lawyers and advocates on Mediation and Negotiation.

It’s a privilege for me to share a transcript of our conversation with you here.

Pras: Mediation seems to be the new mantra for resolving disputes peacefully. What is Mediation and what are its salient features?

Laila: Mediation is assisted negotiation where a neutral third party, termed the Mediator, assists disputing parties to negotiate and find mutually acceptable terms of settlement to resolve their dispute. The salient features of mediation are:

• Voluntary: Participation is voluntary and parties can terminate the process at any stage, if they chose to do so.

• Confidential: Any communication made during the mediation is confidential and cannot be used against the parties in any judicial or quasi-judicial proceeding.

• Self-determination: The parties resolve their dispute privately through informed self-determination. Their mutually acceptable outcome is specifically tailored to their needs and interest. The mediator does not have the authority to impose any decision on the parties.

Pras: We have heard a lot about court-mandated mediation where the litigants are directed to explore settlement through mediation. Has private mediation gained ground?

Laila: Private mediation has started in India and I have no doubt that soon it will be as popular as it is in other developed countries like UK, US, Singapore and many others, for the following reasons:

1. Early Resolution & High Settlement Rates: Private mediation helps parties to access mediation pre-litigation and avoid the adversarial system altogether. With the facilitation of a Mediator, the disputing parties are once again able to negotiate productively and resolve their dispute – over 80% of disputes handled by private mediation institutions settle with a large number of them in just one session. Parties have lived the problem and it cannot be doubted that the best solutions lie within them. Mediation fosters their participation, gives them the control over the result and provides an environment for creativity and flexibility.

   As more people experience the benefits of private mediation, they will hesitate to enter the adversarial system in which they hand over decision making to the lawyers and judges. Adversarial process is onerous, time-consuming and expensive. The goal is not a resolution, and instead a determination of who is right and who is wrong. When these realizations and distinctions become clearer among our litigants and lawyers, private mediation will rapidly gain ground.

2. Choice of Mediator: Unlike in Courts, Private mediation offers parties a choice of mediator. The parties can choose the style, personality and expertise they are comfortable with and at prices they can afford. When parties have the freedom to choose their mediator, they are able to create the most conducive environment they require to resolve their dispute, enhancing the positive experience of mediation.

Pras: Mediation in family, matrimonial and other disputes have been going on for long. But the statistics of commercial disputes mediation seem rather slim? Why is that? And what needs to be done?

Laila: Mediation in India is indeed more popular in matrimonial disputes. ‘Counselling’ has been a necessary provision existing in matrimonial law for a long time. The disputing parties are required to meet a counsellor prior to the commencement of the trial. But this provision of law rarely had a positive outcome. After mediation was introduced, family court judges consider mediation more appropriate and refer almost all the matrimonial disputes for mediation. More than 70% of them resolve and today it is a welcome practice by all stakeholders.

When it comes to regular civil and commercial matters, judges are not bound by any mandatory requirement and are thus not as familiar with the success of mediation. In order to overcome this mental block, the Commercial Court Act has a mandatory requirement for pre institution mediation. This provision of law has anomalies, which if set right and implemented properly, could be a good way to change the mindset of Judges, lawyers and litigants on the effectiveness of mediation for commercial disputes.

Another important step to enhance the use of mediation is by having a tiered dispute resolution clause in all contracts whereby parties agree to try mediation first and only if mediation fails, they will resort to arbitration or litigation. This can overcome the hesitation for mediation after a dispute has arisen due to the fear of losing face or appearing weak.

Pras: You have founded the Centre for Arbitration and Mediation Practice (CAMP) in Bangalore. How is CAMP promoting Mediation? Is it through Mediation Advocacy?

Laila: CAMP is one of the pioneers of private mediation in the country. In order to promote private mediation, the first requirement is to offer parties a positive experience of mediation. We strive hard to train our Mediators to excel in the skills of mediation and practice mediation as per international standards and protocols. For example, we engage in extensive Convening to ensure that when the parties finally meet for mediation, all the necessary documents, information and the influencers of the decision are present to ensure that parties engage in an efficient and effective mediation.

Training mediators and advocates to participate in mediation is another important part of our work. Advocacy in Mediation is different to advocacy in litigation. No doubt it is a transferable skill. But unless the skills are honed, advocacy skills attuned only to the adversarial process can be destructive in a mediation. We regularly conduct training on ‘Advocacy in Mediation’ at CAMP.

We also conduct several seminars, conclaves, webinars and discussions. We write extensively in law journals and other publications. We campaign for legislative changes to support mediation.

Pras: Mediators have to be properly trained. Does CAMP provide that training and how is that structured?

We conduct training in mediation with international organisations like JAMS (the largest provider of private mediation services in the world), Singapore International Mediation Centre (SIMC) and Edwards Mediation Academy (EMA). We also have an ongoing arrangement with EMA offering their online mediation training for Mediators.

Pras: Can you recount a commercial dispute where you were the Mediator and share that experience?

Laila: An infrastructure dispute between a national level construction company and a subcontractor over the laying of Roads. It was in court for several years and then came in for mediation.

As a mediator, my first job is to set up the mediation. The ‘set up’ in mediation as described by David Lax and James Sebenius in their book, titled ‘3D Negotiation’, involves having:

“the right parties on the table in the right sequence to deal with right issues and engage in right interests at the right table at the right time, under the right expectations and facing the right consequence of walking away if there is no deal.”

The participants in this mediation included the financial experts, the site engineers and the soil experts. As I had several discussions with the parties prior to the mediation I recognized that there were misunderstandings between the CEO of one company and the CFO of the other company. Ego came in the way. It was important to bring them in and on a personal invitation, they agreed to join.

As the financial books were examined, perspectives shared, possibilities in court examined, there was a greater understanding of the dispute. They were ready to move into a solution framework. Several options were explored for resolution.

Both parties agreed on the principal amount to be paid by the contractor to the sub-contractor. Regarding interest on delayed payments, the contractor was willing to pay 8% interest. Sub-contractor was clear that the company’s Board would never allow an interest rate less than 12%. There was an impasse and both sides froze. The mediator is the last to give up. Shuttling back and forth, a creative option was found. They both agreed to a lower amount to be paid as principal and the interest, at 12%. The case settled.

Some months later I met one of the parties and was told that the two companies had got back to working with each other on another large project. They ensured that they had a mediation clause in the agreement.

Pras: We hear about concepts like MED-ARB and ARB-MED. How does that work?

Laila: MED-ARB is a process where parties agree to try mediation first and in case mediation fails, they move into Arbitration. There could be some issues that settle at mediation and the remaining are left to arbitration.

ARB-MED is the other way around. Arbitrator may refer the case for mediation at any point in the arbitration if she feels the case could be resolved. It is pertinent to mention the Arb-Med-Arb Protocol has been developed by the Singapore International Arbitration Centre (SIAC) and the Singapore International Mediation Centre (SIMC). The case is registered as an arbitration by SIAC, the tribunal is constituted and issues are framed before the matter is sent out to SIMC for mediation. Once the terms of the settlement are found SIAC will convert it into an arbitral award.

These hybrid processes work best when different persons are engaged in the mediation and the arbitration. Confidentiality and neutrality could be compromised and parties may not get the best out of either process if the same neutral is used for both processes. In case of adopting dual roles, the neutral needs to follow strict protocols building safeguards so that either process is not compromised. Only neutrals who are trained in performing the dual role should do it.

Pras: What's the future of Mediation in Commercial disputes and who are the people who can establish Mediation as the first port of call in the dispute resolution process.

Laila: As the common saying goes “the business of business is business and not litigation”. Businesses all over the world are realising the wisdom of resolving their disputes through alternative dispute resolution processes, especially mediation.

Recognising the increasing use of mediation in international and domestic practice and the need for cross border enforcement of International mediated settlement agreements, UN Convention on International Settlement Agreements resulting from Mediation, known as Singapore Convention on Mediation, was signed in 2019. India is a signatory to the convention. The convention will come into force in September 2020.

An inaugural study in 2020 commissioned by the Ministry of Law in Singapore stated: “when it comes to user’s satisfaction with cost and speed, mediation fared best”. The study’s authors commented, “these results indicate that the use of mediation as a ‘real alternative’ could pick up when the Singapore Convention on Mediation comes into force in September, which provides a process for mediated settlement agreements to be enforced even across borders”.

Disputes are an inevitable fall out of relationships. Businesses that are ‘dispute wise’ are laying emphasis on dispute management through processes like mediation. Commercial contracts that have a tiered dispute resolution clause that explores mediation first, give themselves a chance to preserve relationships, invest minimally on resolution and find solutions that meet their real interests and needs.

The pandemic world presents unique opportunities to reveal the full potential of mediation. In a situation of lockdown and social distancing all over the world, many of us mediators are continuing to resolve disputes online and virtually, with everybody safe in their own homes. The flexibility and creativity of mediation has made that, too, possible.

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I hope you found Laila’s wisdom as useful as I did! Please share any questions or comments you may have by hitting this button.

Potpourri

• It is extremely concerning that there has been an upsurge in withdrawals from the Provident Fund (🔗 click here to read about this). This points to people losing their jobs or their salaries being cut forcing them to dip into their savings. I hope we can herald an end to this pandemic with a cure or a vaccine. Until then, let us continue preventative measures such as mask-wearing (🔗 click here to read about the science behind this if you are a sceptic)

• Here’s some trivia for EPL fans. Liverpool F.C. won their first title following a 1-0 win in extra time against Flamengo in the 2019 FIFA Club World Cup Final at the Khalifa International Stadium in Doha, Qatar. Fans of the club celebrated with a rousing chorus of ‘You Will Never Walk Alone’, a song, which has surprisingly little to do with sports! In fact, its roots can be traced to Rodgers & Hammerstein’s play revolving around a couple in love working in an amusement park, who sadly lose their jobs for falling in love. The play did not do well but its musical adaptation ‘Carousel’ in 1945 was a big hit, with this song being a popular tune. Fast forward a few decades, and Liverpool fans made the song their anthem. 🔗 Click here to listen to the song and learn more about its history.

• I came across a 2018 blogpost by Archana Thyagaraju titled ‘That Mighty Pen’. In it, I found a refreshing narrative about the emotions invoked by filter coffee: 🔗 Click here to read “Coffee is a Drink, Filter-Coffee is an Emotion”.

Until next Sunday, take care, my dear readers.