Oon & Bazul Webinar: Building Bridges and Effective Advocacy: Asian Approaches to Mediation and Commercial Conflict

Posted in Insights June 12, 2021

This topical summary is based on a webinar organised by Oon & Bazul on 3 June 2021, in collaboration with SIMC, Khaitan & Co., and the International Fraud Group. We thank Oon & Bazul for the rights to reproduce this article. The full recording and original article may be viewed here and here.

Featured speakers:
Mr Chuan Wee Meng, CEO, Singapore International Mediation Centre
Dr Arthur Dong, Partner, AnJie Law Firm, China
Mr Raj Panchmatia, Partner, Khaitan & Co, India
Mr Fahmi Shahab, Executive Director, Pusat Mediasi Nasional, Indonesia
Mr Hiroyuki Tezuka, Partner, Nishimura & Asahi, Japan
Datuk Kuthubul Zaman, Senior Partner, Messrs Zaman & Associates, Malaysia
Mr Lionel Chan, Partner, Oon & Bazul, Singapore
Mr Kevin Kim, Senior Partner, Peter & Kim, South Korea

Opening: Bazul’s Keynote

Bazul gave a keynote speech highlighting the main reasons for the reluctance to utilise mediation, which often arises from misconceptions about the mediation process. He went on to debunk these misconceptions by demonstrating that such perceptions are usually misconceived. Lastly, he touched on the key commercial benefits of mediation and offered some practical tips which mediators and counsel may adopt to bring about a settlement.

Wee Meng’s Speech

Wee Meng shared some of the global developments since the Singapore Convention

on Mediation came into force in 2020, such as the rise in hybrid alternative dispute resolution (“ADR”), and cases referred to SIMC. A key development in the area of hybrid ADR is the SIMC-SCIA Med Arb service, where SIMC mediated settlement agreements may be enforced as an arbitral award in China, which is an extremely exciting development, especially for commercial parties who frequently do business in China. Wee Meng also shared examples on how the quality and quantity of the SIMC cases have been going up, as cases involve higher dispute values from various jurisdictions. This could be attributed to the credibility of SIMC as a mediation institution, and suggests that mediation is now the first port of call when resolving complex cross border disputes.

Panel Discussion

  1. General Trends in each Jurisdiction

Bazul kicked off the panel discussion by asking each speaker about the general trends for mediation in their countries.

CHINA

Arthur started off by sharing about China’s long history of resolving dispute by mediation, and the government’s promotion of the use of mediation in recent years, especially for cross border commercial disputes. He also talked about the unique long standing practice in China where judges and arbitrators commonly play the role of the mediator.

KOREA

Kevin shared about the role Korean judges play in mediation. Compared to the past where judges would also be involved in court annexed mediation, there are now separate mediators who specialize in mediation. Judges are also able to assess and evaluate recommendations issued by the mediator, which is a unique practice in Korea. In terms of Korea’s developments in the field of mediation and arbitration, Korea ten ds to follow global trends, taking heed from practices recommended by UNCITRAL, and does accept and utilise mediation together with arbitration.

JAPAN

Tezuka-san spoke about the Japanese government’s support for mediation, especially for commercial disputes involving large corporations. While Japan has yet to sign the Singapore Convention on Mediation, preparations such as the opening of the Kyoto Mediation Centre and the amendments to the Foreign Lawyers Act are being made, and deliberations are underway to amend the mediation regime to introduce the enforceability of mediated settlement agreements. However, consensus by lawmakers is hard to achieve due to disagreements as to whether the enforcement regime for domestic and international mediated settlement agreement should be unified.

INDONESIA

Fahmi shared that despite the high success rate of mediation, popularity is still low at the ground level. This is largely due to the lack of understanding of mediation and misconceptions about the process. Hence, mediation in Indonesia is predominantly used in court-annexed mediation, which is compulsory for civil cases, rather than private mediation.

INDIA

Raj talked about the positive developments in mediation in India, one of which being the training of mediators by the SIMC, as trained mediators are key to the mediation process.

There is also an increasing use of mediation in commercial disputes, and the courts have brought in mediation as a precursor to litigation in specialized commercial acts. Bazul responded that mediation would be especially useful to ease the massive caseload Indian judges face, which could go up to more than 100 cases in a day.

2. Changes to the Mediation Landscape Amidst the Pandemic

INDIA

Raj mentioned that the push towards mediation in India has been driven due to the court’s limited functions amidst the pandemic. Mediation thus provides a cheaper and faster resolution of the dispute.

JAPAN

Tezuka-san mentioned that mediation has risen in usage, due to disruptions caused by COVID-19, and the court system’s disallowance of the taking of witness evidence by video conferencing.

MALAYSIA

Datuk Kuthubul talked about Malaysia’s recent COVID Act which incorp orates the use of mediation in the context of 9 categories of contracts including tourism and construction-related contracts. As a result, mediation is the only recourse against a defaulting party who is unable to perform its obligations purely due to governmental measures to curb the spread of the virus. Section 9 of the Act empowers the Minister to determine the mediation process, who also works together with the Malaysia Mediation Centre which provides trained mediators for the resolution of the dispute.

SINGAPORE

Wee Meng shared about SIMC’s successful implementation of hybrid forms of mediation, which presents several advantages to the mediation process. The seamless reference to online documents has added momentum to the mediation and enabled parties to better develop their train of thought. Additionally, the ease of access to the top level decision makers of the company due to the convenience of meeting virtually, can accelerate the approval of decisions in respect of the settlement agreement. However , he cautioned that mediators should be judicious in their selection of the participants who may join the virtual mediation, to prevent delays in the decision making process due to the mediator’s inability to address the concerns of each participant.

Bazul agreed and suggested an alternative approach, which would be for mediators to identify and focus on the key decision makers during the online mediation process, rather than requesting for the non-attendance of some. This would prevent the hurting of feelings or questions regarding the transparency of the process.

3. Enforcement

SINGAPORE

Lionel provided a comprehensive overview of the various methods in which mediated settlement agreements could be enforced overseas. One key example would be to record a mediated settlement agreement as a Singapore Judgment and leverage on bilateral or multilateral treaties such as the Reciprocal Enforcement of Commonwealth Judgments Act or the Hague Convention to enforce these converted judgments in foreign countries.

4. Hybrid Dispute Resolution Mechanism

KOREA

Kevin shared about his experience in several mediations which were utilised with arbitration, and elaborated on the benefits of such hybrid dispute resolution mechanisms. Due to the convenience of the mediation process, he felt that it would be helpful for parties to spend a day to mediate the dispute before starting arbitration proceedings.

JAPAN

Tezuka-san provided various reasons for the common transformation of mediations into arbitrations in Japan. Such reasons included concerns over the enforceability of mediated settlement agreements, as well as fears regarding the mediation process. Additionally, arbitrators are also able to decide on the issues which were left unresolved following the mediation.

5. Recommendations by Each Speaker

Bazul ended the panel discussion by asking each speaker to recommend several best practices to achieve a successful mediation. Datuk Kuthubul, Wee Meng, Fahmi and Raj, all emphasised that preparation is key in the mediation process, and that the use of pre-mediation meetings with the parties is critical to the success of the mediation. Kevin and Tezuka-san both mentioned how mediators should be creative and flexible in tailoring the mediation procedure and solutions to meet the interests of the parties. The understanding of cultural differences was also discussed by Wee Meng, Raj and Fahmi. Several best practices would include treating the parties fairly, not rushing the process, and ensuring that parties feel respected.

Selected Q&A

  1. Tips on Selecting a Good Mediator

Bazul highlighted the importance of the mediator being able to garner the respect of the parties proposing the mediation. Hence, depending on the issues involved in the dispute, mediators who are experts in that field of practice should be selected.

2. Dealing with difficult parties in a mediation

Wee Meng suggested that pre-mediation meetings be conducted to identify potentially difficult and obstructive parties. Parties are also advised that they should always conclude their opening statement on a positive note to lessen the effect of any grievances they wish to air during the mediation.

3. Biggest challenge faced in a mediation

Arthur highlighted the difficulties faced by mediators when trying to instil confidence in the process of mediation, as parties often have no faith that mediation can lead to settlement. Hence, mediators would have to evaluate the situation carefully to identify parties’ interests.

For more information, please contact Mr Abdul Malik, Partner, General Manager and Head of Business Development, Oon & Bazul: abdul.malik@oonbazul.com.