Do we really have to mediate?

Everyone who has ever attended a mediation is familiar with the problem of the reluctant opponent, who doesn’t want to be there and can’t see why he isn’t in Court already. Courts are increasingly robust about directing parties to mediation but short of refusing the list the matter for a hearing until the parties have at least attempted to resolve their differences by mediation, there is no real sanction against a party who puts obstacles in the way of that mediation taking place in good faith.

There are signs however that this is beginning to change, especially where (as is increasingly common) there are dispute resolution provisions in a contract between the parties. In EMIRATES TRADING AGENCY LLC v PRIME MINERAL EXPORTS PRIVATE LTD [2014] EWHC 2104 (Comm) the parties entered into a commercial agreement which provided that “In case of any dispute or claim arising out of or in connection with or under this LTC ... the Parties shall first seek to resolve the dispute or claim by friendly discussion… if no solution can be arrived at between the Parties for a continuous period of 4 ... weeks then the non-defaulting party can invoke the arbitration clause and refer the disputes to arbitration”.

 Emirates argued that this meant before the arbitrator could proceed there had to be four weeks of continual discussion, whereas Prime Mineral argued that the clause itself was uncertain and therefore void.

Mr Justice Tear held that friendly discussions to resolve the dispute might last one day or one week or more depending on the nature of the dispute but the clause itself was enforceable and not void for vagueness. A dispute resolution clause in an existing and enforceable contract which required the parties to seek to resolve a dispute by friendly discussions in good faith was enforceable. The obligation to seek to resolve a dispute by friendly discussions in good faith had an identifiable standard, namely fair, honest and genuine discussions aimed at resolving a dispute. Difficulty of proving a breach in some cases should not be confused with a suggestion that the clause lacked certainty.

It seems to me that the same principles will apply to a mediation clause. A party contractually bound to mediate who puts unreasonable conditions in the way of that mediation taking place and who fails to enter into a mediation in good faith is likely to find themselves unable to commence proceedings until they do so. This does not of course deal with the problem of the party who turns up and simply folds his arms, but experience teaches that getting to a mediation is often half the battle.

#reluctanttomediate #disputeresolution

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