MEDIATION

Mediation however, has come to be popular in recent times, especially with its inclusion as a means of dispute resolution in the COVID Act in Malaysia.

The key benefits of mediation over litigation are reduced costs and time. It generally takes 12 to 18 months for a case to come to trial in the high courts and the costs involved are normally significant because of the inevitable need to use experts, often from multiple disciplines, in addition to the multi-party nature of disputes because of the number of people involved in the contractual chain or delivery of the project.

In contrast, mediation can be arranged more quickly, is logistically easier and significantly cheaper. Mediation also has the advantage of being a confidential process, which can result in a confidential settlement, if the parties so wish. This is useful in protecting the brand image and corporate reputation while not causing loss of customer and/or client confidence. Mediation is first and foremost a private dispute resolution process where the disagreeing parties work with a mediator to negotiate a settlement to their dispute. The mediator is a neutral party with no vested interest in the outcome and is trained to facilitate a settlement between the parties. Furthermore, for construction disputes, the mediator usually has experience in the construction industry. Mediation is also undertaken on a “without prejudice” basis, in that anything said and/or written down during the course of the proceedings cannot be used as evidence in an arbitral or litigation proceeding.

This is in direct contrast with litigation and arbitration, where control of the dispute is relinquished to a court, judge or arbitrator that has no real interest in facilitating a timely completion of a project or preserving any relationships.

Mediation sessions usually take no more than a day or two, compared to a court trial or arbitration hearing that can take months. Mediation can be scheduled as soon as the parties are ready, while arbitration hearings and court trials often take months to be scheduled. This time advantage is particularly important when the mediation takes place while a project is still under construction, because resolution of disputes clear the way for more cooperation between the project participants.

MEDIATION AS AN ADR TOOL IN MALAYSIA

Mediation has been gaining prominence as an effective ADR tool in Malaysia with the enforcement of the Mediation act 2012 (Act 749).

The cardinal rules of mediation are as follows:

• Disputing parties may choose to submit to mediation at any
• Disputing parties may decide the terms of
• The mediator shall have no decision-making power
• All disclosures, communications and even admissions made under a mediation session are strictly “without prejudice” or privilege

KEY SUCCESS FACTORS OF MEDIATION TO THE INDUSTRY

In analyzing the key success factors of Mediation in Malaysia, there are some key learnings.

1. Ensure the parties see the process as a means to resolving the dispute and repairing their
2. Create a supportive atmosphere to facilitate sharing, trust and negotiation among the parties:
3. Ensure that the parties are comfortable throughout the
4. Ensure clarity in both, the stages of the process and the writing of the agreement:
5. The process should remain fair, logical and command respect throughout in order to allow the parties the best attempt at resolving their dispute:
6. Parties have a clear understanding of their requirements and participate in an effective feedback process:
7. Acknowledge efforts towards achieving resolution and assist parties to voice apologies and repentance for transgressions.

In my opinion, there is still a role for mediation even after a party has the benefit of an adjudicator’s decision because it is only of temporary finality and litigation or arbitration may still follow. The challenge for mediation in this scenario however is that the ‘winning’ party in the adjudication may feel they have all the negotiating power, even if the adjudicator’s decision was obviously wrong and the outcome of litigation or arbitration would be different.

In summary, there remains room for more use of mediation to resolve disputes, especially on matters where both parties want to come to an amicable solution but require the experience and guidance from a respected third party. Further to this, mediation could well be a solution to post-adjudication decisions and although they may come with its own unique challenges, it could, in the long run, be beneficial to the industry.

By: Shaun Kumar

Principal – 2CConsulting Sdn. Bhd.