Originally published here in Rising Nepal Daily: https://risingnepaldaily.com/opinion/double-hatting-in-dispute-resolution
This author happened to go through an article on alternative dispute resolution by Gizem Alper at Mediate.com.website the other day with greater curiosity and interest. As the author of the article uploaded in the website, Alper is introduced as attorney in New York and Istanbul (Turkey) having enormous experience, among others, in cross border commercial arbitration and mediation. The article discuses precisely about what is termed as double hatting under alternative dispute resolution mechanism popularly called as mediation-arbitration (Med-Arb) with precise comparative information and insights drawn from different international instruments.
The term ‘double hatting’ does denote the wearing of two hats by a person signifying that the same person who is appointed as mediator is also agreed to perform the role of an arbitrator in case mediation process fails to help settle the dispute in succession. It is a combination of mediation and arbitration where the parties agree to settle their disputes first by attempting mediation for win-win outcome within a specified time. If the parties fail to reach agreement in the attempt of mediation within the specified timeframe, the dispute will be decided through an arbitral award. In a nutshell, med-arb procedure involves parties to a dispute mutually agreeing to mediate the dispute with a consideration that if the dispute is not resolved at the mediation (win-win) stage, the dispute will automatically proceed to binding arbitration (win-lose) with the same third-party who has served as mediator also serving as the arbitrator.
In fact, the blending of mediation and arbitration has been a long held practice in Nepal especially applied as a deeply embedded practice in resolving community based disputes though the terminology in the modern sense of the term was not explicitly used and formally defined. Several indigenous communities in Nepal do use med-arb as an informal way of resolving community disputes of various kinds as the elders (community trusted persons) first attempt to seek mediated settlement and in case their support to bridge the differences and restore relationships fails, they give decision pronouncing who is wrong and who is right. However, this community practice has not been formally codified.
The Local Self-governance Act, 1999 had formally established mediation–arbitration (med-arb) in the true sense of the term to settle local disputes. The mediation-arbitration panel was so envisaged in the aforesaid Act as to bring the representation of the local community members who did possess the sense of impartiality, integrity and credibility and on top of that the wider acceptability of the community to work as civic volunteer to help resolve the local disputes. Likewise, Local Government Operation Act, 2017 enacted in correspondence to the Constitution of Nepal 2015 has continued and subscribed to the same blended methodology of local dispute resolution. The judicial committee is legally mandated to use mediation-arbitration (med-arb) to resolve community-based local disputes.
Not only in Nepal, is mediation-arbitration (Med-Arb) said to be very much popular in the People's Republic of China. A combination of the two – mediation and arbitration – is ideal and effective and the merged system seems to work well in China and many other Asian countries due to their legal culture that emphasises consensus and communal harmony. Some scholars hold the opinion that the Asian modus operandi of integration of mediation into arbitration has impacted the contemporary practices of international dispute resolution.
Alper remarks in the above referred article that the concept of merging mediation with arbitration has attracted attention in the international mediation and arbitration community. According to her, med-arb is a hybrid dispute resolution mechanism having such attributes as efficiency, confidentiality, neutrality, and enforceability. However, she cautions on the potential pitfalls of mediation-arbitration as performing double role by the same person as both mediator and arbitrator could compromise the confidentiality and integrity of the mediation process.
However, according to Alper, different jurisdictions and international institutions have addressed this matter in their own way. Singapore International Arbitration Centre (SIAC) and Singapore International Mediation Center (SIMC) have joined forces and outlined a procedure for bending med-arb in an effective way. They have discouraged parties from appointing the same person as a mediator and arbitrator in the same dispute. It has been noted that the same person will not be appointed both as an arbitrator and mediator, unless, of course, the parties to the dispute agree otherwise.
It is also in order to refer to Asia-Pacific Centre for Arbitration and Mediation (APCAM) Mediation Rules which stipulates that once a party invokes an Arbitration-Mediation-Arbitration (AMA) Clause to initiate an Arb-Med-Arb procedure, the emergency arbitrator shall stay the arbitration and inform that the case be submitted for mediation. APCAM will initiate mediation and submit the case to mediation under these Rules. If the dispute is not resolved by mediation, APCAM shall issue the Mediation Status Report informing the emergency arbitrator or the final arbitral tribunal, as the case may be, that the dispute could not resolved by mediation, so that arbitration proceedings can be resumed.
This APCAM provision has been subscribed by the Mediation Rules of the Nepal International ADR Centre (NIAC) which is a non-sate entity and also the constituent member of APCAM in Nepal. As a global player in the arbitration world, International Chamber of Commerce (ICC) revised rules to allow for the incorporation of mediation into arbitration proceedings. Its updated arbitration rules do not directly address med-arb; however, the parties are to be encouraged to settle disputes through amicable dispute resolution methods including mediation.
As Alper argues, double hatting is a slippery slope requiring some sort of guidelines and regulations. Nevertheless, given the ethical considerations, it is also a necessity for ensuring justice and fairness. According to Alper, this includes education and training enabling mediators to navigate the ethical considerations imposed by double hatting and establishing practical norms because mediators play and will continue to play a key role in shaping practical standards.
In Nepal too, double hatting issue vaguely exists as enshrined in the Local Government Operation Act, 2017 in particular. Besides education and training to mediator, this also requires amendment in the act concerned to clarify the roles and responsibilities of judicial committee to address the confusions related with double hatting.
Joan Kelly explains that while she used a facilitative model while doing her research, she now usually ends up using elements of all the mediation styles: transformative, facilitative, and evaluative.By Joan B. Kelly, Ph.D.