Written by Darren Lai and Fatin Ismail

A dispute is a problem to be solved together, rather than a combat to be won

— Woodrow Wilson

Introduction

Mediation is a non formal and wholly voluntary process involving an impartial third party as the Mediator. A Mediator’s role is to facilitate parties in reaching a mutually satisfactory resolution without going through or completing a trial or appeal. This meditation process differs from traditional litigation in a sense that both parties discuss their case with the aim of reaching a mutual “win-win” settlement. 

Upon reaching a settlement, parties generally will enter into a Settlement Agreement which lists out the terms of settlement or receive a consent judgement if in the case of a Court Assisted Mediation. 

Modes of Mediation

Per, Practice Direction No. 4 of 2016, Practice Direction On Mediation, Mediation may be carried out in the following modes:

  1. Court Assisted Mediation;
  2. By the Kuala Lumpur Regional Centre for Arbitration (KLRCA); or
  3. By mediators from the list of certified mediators under the Malaysian International Mediation Centre (“the MIMC”). 

In addition to that, the Pusat Mediasi Covid-19 (Covid-19 Mediation Centre) was also established pursuant to section 9(2) of the Temporary Measures For Reducing The Impact of Coronavirus Disease 2019 (COVID-19) 2020 to assist in resolving contractual disputes not exceeding RM500,000.00 arising from the implementation of the Movement Control Order. 

However, from 23rd October 2022 onwards, Pusat Mediasi Covid-19 will no longer accept Mediation applications in line with the closing date of the Act on Temporary Measures to Reduce the Effects of the 2019 Coronavirus Disease (Covid-19) 2020 [Act 829] on 22nd October 2022

Therefore, this Article shall focus on the first three modes of Mediation.

Court Assisted Mediation

As a general rule, the Judge hearing the case should not be the mediator. However, should both parties agree, then the matter can be heard by the Judge presiding over the case. The procedure, as it is informal, shall be in the manner which is acceptable to both parties. In the event a Court Assisted Mediation is successful, a consent judgement shall be recorded by the mediating Judge. This consent judgement shall contain all terms as agreed to by both parties. 

KLRCA Mediation

Should parties opt for KLRCA Mediation, in accordance with the KLRCA rules of Mediation, the Plaintiff’s solicitors shall, upon direction of the court, notify the KLRCA in writing within seven calendar days. Upon which, KLRCA shall proceed with the Mediation process. 

Other Mediators 

Other Mediators may be appointed from a list of certified mediators under the MIMC. Alternatively, an independent Mediator may also be appointed upon agreement by both parties. The mediator shall then facilitate Mediation with the aim of finding a mutually accepted solution. It is to be noted that more than one mediator may be appointed to resolve the dispute should both parties desire. 

The application for mediators under the MIMC may be made in the Mediation Request Form which is accessible here.

It is to be noted that the mediator chosen may agree to be bound by the MIMC Code of Conduct and MIMC Mediation Rules, or not at all. In the event that parties agree to be bound by MIMC Mediation Rules, upon direction of the Court, the Plaintiff’s solicitor shall within seven (7) days notify the MIMC in writing. Upon receiving the notification, the MIMC shall proceed with the Mediation process. 

Format of Mediation

Generally, Mediation is run in a five-stage format as follows:

Stage 1: Establishing the Process

At this stage, the Mediator and both parties agree to guidelines they will follow during the course of Mediation. These guidelines usually include only allowing one person to speak at a time, treating all parties with respect, and confidentiality of all communications during the course of Mediation.

Stage 2: Exploring Positions and Interests

The parties usually make their initial statements regarding their disagreement and define what they hope to resolve at the Mediation. The Mediator also will assist parties to identify the issues and to identify the concerns of both parties. 

Stage 3: Developing Solutions 

Each party will also discuss their interests and explore possible solutions to resolve their dispute. 

Stage 4: Private Sessions

The Mediator may also hold private and confidential sessions with each party to assist in determining further interest and/or discussing possible solutions. Each party may have a private session with the mediator, without the presence of the other party. It is here that they discuss their issues and concerns that they are uncomfortable sharing or disclosing to the other party. 

Stage 5: Finalising A Resolution

The parties, assisted by the Mediator, will then find a solution to the dispute which is mutually agreed to. 

Stage 6: The Written Agreement

Once a mutual agreement has been agreed to between parties, the resolution and its terms may be formalised in a written agreement. This agreement will be known as the settlement agreement signed by both parties. 

Conclusion

Mediation is a form of Alternative Dispute Resolution (“ADR”) where one of the more widely used form is arbitration. As much as arbitration is an effective tool in ADR, arbitration still requires the arbitrator to make a decision. Mediation is wholly different. The role of the mediator is to facilitate discussions and any settlement or solutions that is formed thereafter, is completely the will and want of the parties. Mediation is a powerful tool and ought to be used more regularly in solving disputes.

Published on 16 December 2022

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