Mediation is a good option

Alternative dispute resolution (ADR) refers to private methods of dispute resolution outside the courtroom. There are various ADR options available including mediation, conciliation, adjudication, expert determination and mini-trials.

Although technically being an alternative to litigation, arbitration is sometimes not considered as being an ADR option because of the possibility of the process being turned into a private version of litigation - though the parties could agree otherwise.

ADR, in the form of mediation in contrast to litigation/arbitration, is considered to be: more informal and flexible, faster, less expensive, enhancing communication between the parties and beneficial in the maintenance of commercial relationships as the parties aim to reach a consensual solution instead of having a decision unilaterally imposed on them by a third party. The nature of ADR generally makes it essential that the parties approach the process with a degree of flexibility of position and are willing to compromise to reach a solution.

Among the ADR options available, mediation is probably the best known and the most utilised in recent times. In mediation, a skilled third party (the mediator) actively encourages the parties to reach a mutually acceptable solution for their dispute.

Mediation is an important alternative dispute resolution method and is accepted as a proper procedural process for the resolution of disputes under Islamic law or in an Islamic context.

Normally a mediation session starts with the parties and the mediator meeting in a joint session where the process is described by the mediator. After that the parties make their opening statements and then move to separate rooms with the mediator going back and forth. The mediator will listen to the arguments put forward and to guide negotiations towards a consensual solution. He may offer advice as deemed appropriate whilst maintaining neutrality. He has no power to issue an imposed decision on the parties.

In contrast to litigation or arbitration, the mediation process may be less adversarial and can take account of commercial considerations beyond narrow concepts of judicial right and wrong. Mediation, therefore, tends towards less hostility than litigation or arbitration which typically produces a winning and losing party, ignoring possible legitimate concerns of either party.

The attitude of the parties very much influences the success of the mediation. If the parties unwilling to compromise and take a realistic view of any potential settlement, the mediation will most likely fail. Although it is important that the mediation is attended by representatives of the parties who are familiar with the issues in dispute, there may be a place for other representatives (eg. those with settlement authority to hear both sides and form an independent view of the respective merits). If an agreement is reached by the parties, a skilled mediator would assist the parties in reducing the resultant agreement to writing for signature, avoiding ambiguity and any possible further dispute on the same issues.

One important point that the parties should keep in mind when conducting a mediation in the UAE is that there is no judicial recognition of the ‘without prejudice' concept, which could mean that commercially sensitive information, including tentative offers of settlement, would be capable of disclosure in later proceedings. Techniques and approaches exist however, to circumvent such potential pitfalls and these should be made available to parties in dispute by proper professional advisors.

Parties in the UAE contemplating the use of mediation should give particular importance to two factors including 1) control of the process remains with the parties as they may withdraw without penalty at any time and 2) the parties only have to agree to a solution if they can live with it, unlike litigation or arbitration in which the judgement may be detrimental to them.

Kammerer is a consultant at Hill International's Dubai office. He holds a civil engineering degree from the University of Applied Sciences Mainz/Germany and a Masters of Law degree in Construction Law and Arbitration from the Robert Gordon University in Aberdeen/UK. He is further a member of the Chartered Institute of Arbitrators and of the Society of Construction Law. He has about 7 years construction and engineering experience gained in Germany, Libya, Iran and the UAE.

The opinions expressed in this column are of the author and not of the publisher.

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