International and Commercial Mediation
What is International Mediation?
Parties from dissimilar nationalities, cultures and traditions react differently in mediation. A knowledge and understanding of different ways of doing things goes a long way to putting parties at ease. Mediators are taught to make eye contact which is the western way. This approach would likely cause offence to a Japanese national. Similarly when mediating with Middle Eastern parties, due allowance and arrangement for prayer times must be made and observed. In Thailand the crossing of legs in formal meetings showing the sole of a shoe can be a great insult. The list goes on. It is as well to realise that smokers deprived of nicotine for prolonged periods become increasingly irascible.
International mediation is simply the process of tailoring the procedure to accommodate parties of different nationalities based on cultural understanding of their ways of doing business. Thai people are too polite to say “no” in fact the nearest word to no in the Thai language is “not yes”. Making each side comfortable in managed discussions pays dividends and secures results.
International Commercial Mediation
International disputes are many and varied and your mediator’s experience ranges from sale of goods disputes under the CSIG Convention to shareholder and share purchase disputes under the laws of Malaysia as well as construction disputes in Thailand Hong Kong and other jurisdictions. Most of your mediator’s international commercial disputes work comes from joint venture and joint operating agreements (both incorporated and unincorporated) where circumstances have changed to create an imbalance in economic returns. At its most fundamental there is always an underperforming economic interest adversely affecting one or other party. It could be the underlying contract fails to reflect the true nature of the agreement or is sufficiently imprecise to give rise to ambiguity exploited by one or other party. Each party will have its own underlying agenda which is not faithfully reflected in a stated or pleaded position. The Mediator’s job is to tease out the hidden agenda and expose the true interest to be addressed with an appropriate solution.
International conflict in cross border transactions often reflects changing market conditions. Where expectation of economic returns is not met the other party will often be blamed. The mediator’s job is to understand the position and interest of each party and lead them to a conclusion which works for both. The mediator will not impose his own solution but rather explore possibilities both obvious and those which may be more obscure. The mediator will get each party to an empathetic understanding of the other’s position with a view to negotiating the historical impasse. He will do this by challenging each party’s respective position and reality test arguments put forward for realistic possibility of success and credibility. The mediator may also get each party to stand in the other’s shoes and ask what they would do in the position the other party finds itself in. An emotionally intelligent understanding leads to empathy and joint problem solving.
Your mediator will also seek to foster an understanding that the arbitration or court process will produce a winner and a loser having decided issues obvious over many years in a matter of weeks. Squeezing several years of commercial dealings into a 2 week hearing requires an extreme form of natural selection necessarily producing an edited version of events which may or may not be compelling.
Court or arbitration proceedings naturally produce a win lose position. Mediation is said to produce a win-win with both parties resolving their competing agendas in a way which allows then to return to the business of making commercial returns from their business without the distraction of litigating history. I prefer to think of the solution as being more an acceptable lose-lose where each party is content to compromise within its comfort zone to produce a settlement freeing both parties from the chains of litigation.
As corporate counsel confronted by many expensive disputes over a 40 year career I have often asked the following question when making main board presentations on complex disputes. Explaining to members of the board that this dispute will cost at least a couple of million dollars in the current year with the cost is likely to increase steeply towards the trial of the issues unless a settlement can be reached. “Do you want me to give this money to the lawyers or can I use these resources to find an acceptable settlement?”. Mediation attempts to resolve a dispute in a similar way. It is based on collaborative working.
