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<xTITLE>The Case for a Fresh Approach to Commercial Cross-Border Mediation</xTITLE>

The Case for a Fresh Approach to Commercial Cross-Border Mediation

by Gabor Farkas
November 2017 Gabor Farkas

Mediation is a proven Alternative Dispute Resolution method. Some even consider it the only true ADR but I shouldn’t get into this here and now. 

Since the European Union has adopted its Directive 2008/52/EC, which came into force 6 years ago, Mediation has been progressing all over Europe.

In most countries, Commercial and Civil Mediation remains a voluntary process where parties to a dispute spontaneously agree to resort to mediation, in order to resolve their difference. Some countries have introduced incentives or sanctions to get the parties to mediate before taking their matter to court. So far, only 2 countries, Italy and the Czech Republic, require an initial mediation session before allowing the matter to proceed further.

It has long been established that spectacular results are achieved through mediation. In some countries, up to 90% of the mediation cases result in a positive outcome. Moreover, time to resolve a dispute is also in favour of mediation. Where in average it takes, in some countries, 450 days for a dispute to be resolved through litigation, rarely to the full satisfaction of either party, mediation only requires an average of 45. In nearly all the finalised cases the process is completed to the satisfaction of both parties who remained in control of the final outcome.

However, when the parties are not based in the same country, getting them to agree to a mediation, then organising that mediation, can border the impossible.

Experienced mediators, we have consulted, list number of hurdles that have to be overcome in order to organise a cross-border mediation. Primarily, agreeing on the very meaning of the word mediation itself, as well as the underlying process, which may vary sometimes considerably, from one country to the next. Other obstacles involve jurisdictional and language issues. Additionally, one other question complicates the matter, the selection of the mediator itself.

Getting parties to agree on one person is difficult. It is especially so when the parties are at odds with each other, come from different cultural backgrounds and sometimes communicate in a language that is not one they would ideally use to negotiate sensitive issues in. This is undoubtedly marred by uncoordinated international legislations and regulations. The excellent study edited in 2014 by Manon Schonewille and Fred Schonewille called “The Variegated Landscape of Mediation” paints a very comprehensive picture of the current state of the mediation regulation and practices in Europe and the World.

Where peace mediation recognises the importance of having cultural sensibilities of both parties represented, commercial and civil mediation rarely does so. Or if it does, the lone mediator process does not reflect that preoccupation enough.

All the mediators we have spoken with, recognise the importance of acknowledging individual differences. This, it is understood by all mediators, is key to the success of any mediation, anywhere. In matters opposing parties stemming from sometime very different cultural, economic and political environments, disputes need to be approached even more respectfully by remaining mindful of the different realities.

In family mediation, co-mediation has been in practice for quite some time, often successfully. The Wroclaw Declaration on Mediation of Bi-national Disputes signed by Polish and German mediators in 2007, makes it its second recommendation: “The mediators should have the same national origin as each party in the mediation. For example, in the case of a German-Polish abduction, there should be one mediator from Poland and one from Germany. In this way, mediators reflect the different cultural backgrounds of the parents.”

In the case of family mediation, this is understandably very important since children, sometimes abducted children, are at the heart of the dispute.  In these cases, emotions are often raw and the mediators need to make sure the parties grief and concerns can be expressed in the language most familiar to them. The mediators have to be able to establish a rapport with the opposing parties and go beyond the words to put the parties’ perspective into a cultural context. For the parties, the necessity to be heard by someone they can relate to, who can relate to them, in the familiarity of their mother tongue is essential. Experience has proven this approach to produce better odds at hoping to bring rapidly a positive outcome to a dramatic situation.

In transnational commercial and civil conflicts, emotions involved are not comparable and the traditional mediation approach with a sole mediator is usually deemed to be appropriate. Therefore, co-mediation is rarely offered. Possibly, in the case of commercial disputes, because one thinks the common language should be one spoken by all and called business…

Mediators know that the business or financial aspect of a commercial dispute is often secondary to the real concern(s). Getting the parties to discuss the core issues at the heart of a dispute is what mediators are trained to do. Failing this goal, the quality of any agreement reached may be superficial and might be mostly uncertain. 

Personally, as a mediator who likes to set the bar higher, I believe that from the onset a mediation should fix itself more ambitious goals than just settling a dispute. The objective should be to give the parties an opportunity to re-establish a dialogue in a respectful environment where there is room to better understand each other.  This can lead to a renewed and appeased relationship that might very well offer great new opportunities.

To achieve this objective, the European mediators we spoke with agree co-mediation would be most beneficial.

Even though co-mediation appears to be an ideal solution it has its own challenges.

If we accept the premise that parties to a cross-border dispute can each chose a mediator that is close to their cultural and linguistic reality, then we may end up with co-mediators with very different backgrounds, used to working with different methodologies and under a different set of mediation rules. Which approach to chose can be a dispute in itself and may very well end-up complicating the whole process. Furthermore, the parties may see their mediator as someone more likely to take their side should the mediation be held-up on a specific issue.

For co-mediations to succeed, parties and mediators have to be able to come together under a clear definition and already existing rules and principles before the mediation is organised. There shouldn’t need to be preliminary negotiations about the rules of the negotiation. One basic principle everybody should agree on is that mediators are not the mediators of the parties; they are the co-mediators to the dispute. Additionally, with international mediators familiar with predefined rules and methodologies, the organisation of a cross-border mediation would be greatly simplified. The carefully chosen mediators guaranteeing, if need be, the validity of the process in the respective jurisdictions of the parties.

A few weeks ago, a new NGO called Active Mediation, www.activemediation.org, has begun operations. A set of mediation rules and regulations have been drafted. These would be the rules under which international mediators can come together in order to participate in cross-border commercial and civil mediations recognised in all European jurisdictions.

This NGO is based in Geneva and is quickly gaining recognition and momentum. The NGO is a think tank for ideas open to experienced Mediators from all over Europe. They are invited to join the NGO to contribute for the betterment of cross-border mediation. They can do so by suggesting additions, changes or provisions to the published draft. The finalised rules will be adopted at the NGO’s first General Assembly sometime in the second semester of 2018. Soon after that, cross-border mediation under these new rules will hopefully become a reality either under the auspices of Active Mediation or of other Centres.

Active Mediation offers a fresh approach to transnational mediation by empowering European mediators and allowing them to jointly define the rules and regulations that will provide a clear framework for cross-border co-mediations. Active Mediation also ambitions to become a platform for ideas that will contribute to the further development and implementation of policies allowing for better coordinated European, transnational, commercial and civil mediation efforts.

In a world where international commerce and cultural exchanges continuously progress, disputes are unavoidable. Solving these cross-jurisdictional disputes through litigation is painfully long, costly and produces mostly uncertain and unsatisfactory results. In such a context, the need for efficient mediation will continue to grow. If we want to help the parties involved in disputes, we have to be mindful of their needs. European mediators co-mediating together under internationally established rules and regulations they have contributed to defining is a major step in the right direction. Please join Active Mediation to support this initiative by contributing with your experience and your perspective.

Biography


Gabor Farkas is the cofounder and President of Active Mediation. Active Mediation is an NGO based in Geneva, that intends to empower European mediators with a platform allowing them to define a fresh approach to cross-border commercial and civil mediation.

During his 30 years of professional experience in Communication, Marketing and Management, Gabor has developed his skills in fostering transnational business relations and conflict resolution. He was the founder and CEO of a chain of retail stores. Previously, he was the Marketing Director of the first European company to offer internet access over cable. An early pioneer in the development of web based businesses he launched one of the first e-commerce websites in Switzerland, in 1995. Gabor has studied multimedia and creative arts in ESAV in Geneva.  He is an accredited mediator with CEDR in the UK, CMAP and ESCP in France and CSMC in Switzerland. Born in Budapest and raised in Geneva, he has also studied and worked in England, the USA, Israel, Spain and France. Gabor Farkas speaks French, English, Hungarian and Spanish.


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