Concept of Adr

8/10/2019 Concept of Adr

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CHAPTER 1

ALTERNATIVE DISPUTE

RESOLUTION: CONCEPT

AND SELECTED PROCESSES


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Litigation : Inefficiency & Backlog of Cases in Courts

(Source : Bar Council)

Court Cases Backlog (As at December2008)

High Court Civil / Commercial 93,523

Criminal 4,544

Sessions Court Civil 94,554

Criminal 8,750

Magistrates' Court Civil 156,053

Criminal 65,221


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INTRODUCTION

The concept of ADR includes processes such as 'mediation,'conciliation, 'arbitrationand adjudication.

These processes are different from each other but they are

'philosophically linked' as they constitute the main processes of ADR. ADR can be utilised to resolve disputes ranging from family to

communal, political, commercial, industrial and even interstatesdisputes without resorting to court system.

It is not intended to substitute the court system but is an alternative toit.

As an effective dispute resolution mechanism, especially mediation andarbitration, also helps to reduce the backlog of cases which are theresult of 'litigation'.

Resolving disputes through court system is costly, time consumingand emotionally devastating.

As Jonathan J Sweet has observed:

The court system has proven to be neither cost effective nor timely inresolving disputes. Atto rneys fees are cos t ly, cou rts are cong ested,cr imin al mat ters take prior i ty o ver civ i l cases.Delays in reaching trialare likely to cons ume years. Finally, when trial is had, verd ic ts m ay beinconsistent wi th the part ies ' understanding and unpredictable inresul t .


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Thus, the complex court procedures created a multi-dimensional crisis

which prompted the jurists and legal experts to search for an

alternative to litigation.

The search resulted in the discovery of alternate forms, known as

'Alternative Dispute Resolution', or its generic acronym 'ADR'.

The advocates of ADR, which know include members of the Bar and

Bench, believe that ADR processes, particularly mediation, may help

to resolve disputes and may solve the backlog of cases problem.

All sorts of civil disputes can be resolved through the process of

mediation.Thus, mediation, as one of the processes, but not the only

process of ADR gives the disputing parties greater power in

resolving their issues by themselves.

It allows the disputing parties to discuss and to develop creative

solutions to their disputes that are generally not possible in court or

during formal hearing and appeals.


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THE CONCEPT OF ADR

ADR is commonly defined as dispute resolution processes and

techniques that fall outside the court system.

It covers divergent processes ranging from facilitated settlementnegotiations in which disputants are encouraged to negotiate

directly with each other prior to some other legal process.

ADR is a broad concept; which include negotiation, mediation/

conciliation, arbitration/ adjudication.

These are useful tools that can be utilised by the disputants to settle

their disputes quickly, cheaply and consensually without resorting

to court proceedings which is time consuming, expensive, disruptive

and by its very nature tends to drive the parties further apart, often

irreparably weakening their relationships.


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SELECTED PROCESSES OF ADR

Negotiation (between 2 parties only)

Negotiation is the fundamental form of ADR. It refers to a bilateral

negotiation between two disputants who are desirous of resolvingtheir disputes amicably.

The involvement of a third party is not required as the negotiation isconducted between the disputants only.

As a process of resolving a dispute through discussion, effective

negotiation necessitates the fulfillment of certain preparatory proceduresbefore the substantial negotiation is conducted by the disputants.

In the negotiation process, identification of issues by the disputants isimportant to see whether they can find a common definition of thesituation and whether they have shared interest in solving them.

The identified issues are to be assembled in a comprehensive list to be

used as the agenda of the negotiation. The preparation for negotiation process also requires the determination

of the location, time and duration of the session as well as the partiesto be involved in the negotiation.

The negotiators may also anticipate what they want to achieve, agree onprinciples that will guide the drafting of the resolution of the issues.


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Negotiation should be conducted in good faith and with the soledesire to achieve settlement of the dispute.

The disputants may compromise to achieve the resolution of the

dispute for without compromise it is unlikely to ensure the success ofthe negotiation.

Thus, mutual understanding is one of the factors in achieving thedesired result, that is, the solution of the dispute.

Although the parties may bargain, exchange information and mayuse some form of influence to get a better deal yet the easy way to

make negotiation fruitful is to try for a negotiated settlement. So long negotiation result in 'win-win' situation it will achieve its

desired result.

Princip led / Cooperat ive Nego t iat ion v. Compet i t ive Nego t iat ion

The 'win-win' approach to negotiation is the 'principled

negotiations' which is the alternative to the competitive, powerbased negotiation process.

The former approach is the preferred one while the latter is notbecause it may either cause the collapse of the negotiation or mayresult in a 'win-loss situation' where one disputant wins the otherloses.


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The win-win approach to negotiation is also termed as

'cooperative' approach which is the opposite of 'competitive'

approach. A good outcome is ensured from the cooperative

negotiation but not from the competitive negotiation. The cooperative approach requires the commitment of both

disputants to cooperate rather than compete for if they compete

there would be no outcome but even if there is an outcome it would not

be a fair one.

The disputants may compete with each other to protect their interestbut they should do so with negotiation skills and effective

communication.

No force or the threat thereof should be used to exert influence for

this may result in anger and resentment. The exertion of influence

must be through persuasion.


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Mediation ( a third party and two disputants)

Mediation is the most important form of ADR. It is a conflictresoIution method in which a mediator helps two people negotiatevoluntary solution to their dispute.

Mediation can help to clear the backlog of cases. Its importance hasbeen felt in Malaysia where even some former and current members ofthe judiciary proposed for its advancement in the country.

Even the Attorney-General of Malaysia, Tan Sri Abdul Ghani Patail, hasadvocated for the development of mediation as the host form of ADR.

Court annexed mediation is becoming mandatory in Malaysian

Court now. (See Mediation Act 2012) In some countries, like Singapore, the courts have encouraged

disputants to use court-based mediation at the preliminary stage ofa suits,this in turn has resulted in a successful reduction of backlog ofcases.

Mediation as a form of ADR is in advance position in so many countries.

Malaysia too is taking steps towards the advancement of this importantconcept.

Malaysia needs mediation as a process of resolving disputes in thesame was as other countries. This is because the backlog of cases inMalaysia is serious. Mediation is rooted in Islam and other religions inMalaysia.


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As DatoCecil Abraham has observed:

The fundamentals of m ediat ion, that is, the encouragement of

sett lement by the assistance of a third party, has been a

pract ice of the East for centur ies and the roots c an be traced

back to the teachings of Islam, Hinduism, Buddhism,

Christ iani ty and the teachings of Confucius. Malaysia, a

country w i th mul t i tude of fa iths and rel ig ions has been a hos t

for th e pract ice of mediat ion amongst i ts recipients. In Islam ,

mediat ion is an indispensable con dit ion and is represented bythe word [Wasaata] wh ils t in Hindu ism ; the med iat ion

pro cess is ref lect ive in the text of i ts sc r iptures as wel l as in th e

concept of the panchayat. So great was the emphasis of

harmony and the resolut ion of d ispute in an am icable manner

to Confucius that a proverb was couched to express hisdiss at isfact ion to the adversar ial process ' in death avoid hel l , in

l i fe avoid law cou rts.


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The best way to avoid litigation is to settle disputes out of court,preferably through the process of 'mediation'.

To promote mediation as a means of alternative dispute resolutionand to provide a proper avenue for successful dispute resolution the

Bar Council of Malaysia, on 5 November 1999, established theMalaysian Mediation Centre (MMC).

The MMC offers mediation services to disputants who are willingsettle their disputes. When one party is desirous of using mediation toresolve their disputes, the MMC assists that party by writing to theopposing party to enquire as to whether they would want to resolve the

dispute by mediation. If the reply is a no, then MMC writes back to theparty who has requested for mediation and informs them accordingly.

The MMC provides mediation training for those interested inbecoming mediators and accredits and maintains a panel ofmediators. The MMC mediators are subject to a code of conductwhich provides for a strict compliance of impartiality and

confidentiality. Not everyone can be a mediator at the MMC. To be qualified as a mediator at the MMC a person must be a member

of the Malaysian Bar and must have completed at least 40 hours oftraining conducted and organised by the Centre and must also passa practical assessmentconducted by the trainers.


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Definition of Mediation

Mediation is commonly defined as a process of settling disputes

settling in which a third party oversees the negotiation between two

parties but does not impose an agreement.

It is a process in which 'disputing parties engage the assistance of an

impartial third party, the mediator, who helps them to try to arrive at an

agreed resolution of their dispute.

The mediator has no authority to make any decisions that are

binding on them, but uses certain procedures, techniques and

skills to help them to negotiate an agreed resolution of their

dispute without adjudication.


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Types of Mediation

There are three types of mediation, viz,facilitative, evaluative and

transformative mediations.

The mediator s role is simply to facilitate the process and try to

bring parties to some kind of resolution.

Facilitative Mediation

In facilitative mediation, the function of the mediator is to structurea process to help the disputants to reach a mutually agreeable

settlement.

In this structured process, the mediator asks questions; validates

and normalises parties' points of view; searches for interests

underneath the positions taken by parties; and assists theparties in finding and analysing options for resolution.


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In this type of mediation, the mediator is merely in charge of the

process while the parties are in charge of the outcome.

In other words disputants enjoy self-determination, that is, they are

in control of resolving their own dispute, but they do so with the help ofa neutral facilitative mediator.

'Self-determination commits the parties to their settlement terms

because they have made decisions by themselvesinstead of having

a resolution imposed on them by a third party.

In a facilitative mediation, the mediator neither makesrecommendations to the disputants nor gives advice to them.

It is inappropriate for the mediator to give his opinion, for at least

two reasons.

First, such opinions might impair the appearance of impartiality and

thereby interfere with the mediator's ability to function.


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Second, the mediator might not know enough about the details of the

case or the relevant law, practices or technology to give an informed

opinion .

A facilitative mediator assumes that the parties are intelligent, able

to work with their counterparts, and capable of understandingtheir situations better than the mediator and, perhaps, better than

their lawyers. Accordingly, the parties can develop better solutions .

The main task of a facilitative mediator is therefore to clarify and to

enhance communication between the parties in order to help them

decide on a mutually agreeable settlement

Evaluative Mediation

In 'evaluative' mediation, the mediator studies the strengths and

weaknesses of the disputants' positions and makes suggestions for

resolving the dispute.

The mediator controls the process, conduct individual meetings

with one disputing party at a time (called 'caucuses') and through

a 'shuttle diplomacy' helps the parties to evaluate their positions.

The evaluative mediator structures the process and directly

influences the outcome of mediation.


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The mediator provide some guidance as to the appropriate

grounds for settlement based on law, industry practice or

provide guidance by virtue of his or her training, experience,

and objectivity.

Transformative Mediation

This is the newest concept mediation in which the mediator usually

seeks to instill mutual recognition and empowerment betweenthe disputing parties.

Generally, 'recognition' is considered to be an important part of

transformative mediation,so that disputants can understand each

other's needs, interests, values, points of views and enables one

disputant to appreciate how the other one defines the problem.


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Transformative mediator meets with disputants and usually

leads each party to understand the outcomes that are wanted

by the other party.

In this way, both parties can approach the problem with moreinformed points of points of view.

In transformative mediation, the mediator 'consciously try to

avoid shaping issues, proposals or terms of settlement, or even

pushing for the achievement at all.

Mediators encourage parties to define the problems and findsolutions for themselves and they endorse and support the

partiesown efforts to do so.


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Elements of Mediation

Mediation, whether facilitative, evaluative or transformative, involves the

following elements:

(a) agreement to mediate; (b) presence of disputants;

(b) the involvement of a neutral third party (mediator);

(c) finding 'options' which are mutually acceptable by the

disputants;

(d) holding joint and caucus (private) meetings and

(e) mediated settlement to be signed by the parties to make the

contract enforceable.

The first, and the most important, element of mediation is agreement to

mediate and the presence of disputants. The presence of thedisputants is crucial for without their involvement the need for

mediation does not arise. However, mere presence of the disputants is

not enough.


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The disputants must have identifiable and conflicting point of

dispute that requires a solution through mediation.

Reaching solution to the disputes would , however, be remotepossibility if the disputants are not willing to act in good faith . The

principle of good faith requires that the disputants to actreasonably and work with the help of an impartial third partyfacilitator or mediator, towards a resolution of their dispute.

The involvement of a neutral third party known as the mediator isthe second element of mediation. The mediator must beacceptable by the disputing parties and consequently enjoy

their confidence. Having been accepted by both parties, the mediator is responsible

to help the disputing parties to reach a complete understandingof the dispute. The mediator must be committed to assisting theparties to work their way through the process of negotiation byfacilitating and enhancing their communication with one another.

To achieve this, the mediator may perform a variety of roles:

the opener of communication channels, who initiatescommunication or facilitates better communication if the partiesare already talking;

the legitimiser, who helps all parties recognise the right ofothers to be involved in negotiations;


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the process facilitator, who provides a procedure and often

formally chairs the negotiation session;

the trainer, who educates novice, unskilled, or unprepared

negotiators in the bargaining process; the resource expander, who provides procedural assistance to

the parties and links them to outside experts and resources (for

example, lawyers, technical experts, decision makers, or additional

goods for exchange) that may enable them to enlarge acceptable

settlement options; the problem explorer, who enables people in dispute to examine

a problem from a variety of viewpoints, assists in defining basic

issues and interests, and looks for mutually satisfactory options;


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The mediator must aid the parties in a neutral fashion to help them

find solution to their dispute. He or she has to be neutral and

impartial.

Impartiality means freedom from favouritism, bias or prejudice. The mediator, as a resource expander, provides procedural

assistance to the parties and helps them to enlarge acceptable

settlement options.

Finding a mutually acceptable settlement 'option' for the

disputants is the third element of mediation. To find options which areacceptable by disputing parties, the mediator needs to understand

their points of view concerning the issues underlying circumstances,

facts, positions, appraisals, etc.

Mediation Process

In mediation process two sessions may be involved: The jointsession (or joint meeting) and 'caucus meeting'.

In the joint session both parties are present with the mediator

and each hears what the other says.

In the caucus meeting the mediator meets the parties separately.

Holding caucus meeting is the fourth element of mediation.


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A 'caucus' is a private meeting between the mediator and one

party. The mediator may hold such a meeting when the parties need

to cool off and refocus or when confidential information needs to be

discussed in a protected setting, when options for settlement need to

be explored in a secure setting.

In caucuses meetings, the mediator may explore a party's

motivations and expectations, provide education and coaching

with respect to the negotiation process, act as a sounding board,

engage in reality check and assist in identifying options that

might be brought to the bargaining table . He or she may also test

the acceptability of proposals that he or she has generated or of

proposal generated by the opposite party in caucus but presented as

the mediatorsown. The mediator may encourage a party to share

with him his or he confidential information .

However, the parties will be reluctant to do this without the assurance

that the mediator is both willing and able to maintain the desired

'confidentiality'. The mediator must meet the reasonable

expectations of the parties with regard to confidentiality.


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Whatever is discussed in caucus with one party must not bedisclosed to the party either in joint session or in the caucusunless the mediator is explicitly allowed to do so by the former.

If there are statutory, judicial or ethical limitations ofconfidentiality, the mediator must inform the parties about suchlimitations. If there are also situations where the mediator may becompelled to testify in court, the mediator must also inform theparties about such circumstances.

In caucus, the mediator has an opportunity to cultivate a

relationship of trust and confidence with each party. The mediator must not betray the trust and must maintain

impartiality. In holding joint meetings or causes with each side themediator just tries to learn the view points of the disputants, obtain acandid discussion of the issues, gain certain arrow the issues andeach party's positions, and deflate extreme demands; gauge the

receptiveness for a proposal or suggestion; explore alternatives andsearch for solutions; identify what is important and what isexpendable; prevent regression or raising of surprise issues; andstructure a settlement of the dispute that is acceptable to bothparties.


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The joint meetings or causes with each side should beconducted in a site or a place where neutrality can bemaintained and confidentiality preserved.

Keeping mediation proceedings confidential is crucial in the sensethat it gives the parties some quiet and uninterrupted times tocontemplate over the issues and tries to find a common ground inorder to resolve the dispute. It may also deny media speculation andprevent self-centred third parties who benefit from the dispute tocause obstacles in the mediation proceeding.

The mediator should therefore carefully guard theconfidentiality of the mediation proceeding. However, if thedisputing parties wish to disclose the proceedings the mediatorcannot do anything about it. Though it would be better, for thereasons mentioned earlier, the parties too should ensure the

protection of the confidentiality of the mediation proceeding. The seating arrangement is also important but there is no

established rule on this. Nevertheless according to most literature, around table seating is the most suitable and not a square orrectangular table.


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This seating arrangement may enable the disputants to establish

direct eye contact as their dialogue develops.The mediator sits at

the end of the table. This seating arrangement, though generally agreed

to be effective, cannot be imposed on the parties. Whichever sittingarrangement is adopted by the parties the mediator must facilitate them

to voluntarily reach their own agreement.

In the mediation process including the joint meetings or causes with

each disputant, the mediator must demonstrate patience, insight,

and psychological fitness to convince parties to modify theirentrenched positions and to reach to a mutually acceptable

settlement agreement, preferably an enforceable written

'agreement' - an agreement that is signed by the disputants and

the mediator which can be enforced as a contract in a court of law.

If a fair and mutually acceptable settlement agreement isconcluded then the mediation process will successfully end.


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The parties must abide by the mediated agreement which they

themselves through their free consent concluded for otherwise

the aggrieved party may take steps towards the formal

enforcement of the agreement.

The application mediation can be used to settle divergent disputes

including commercial and industrial disputes, employer and

employee disputes, landlord and tenant disputes, divorce and other

family disputes, neighbour and community disputes, political

disputes, interstates disputes and other types of public and private

disputes.

Benefits of Mediation

Mediation has many benefits. Compared to law suits, mediation is

affordable. Hiring an attorney can cost thousands of Ringgits

for even a small case, with no guarantee of proper resolution.


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Mediation provides an affordable alternative to costly litigation.

Lawsuits can take years off the disputants' life in wasted time,

frustration, money, and emotional pain.

Mediation usually prompt, takes only a fraction of the time that the

legal system takes. Compared with litigation which is open to the

public, mediation is private and confidential and this means the

disputants can resolve their dispute with privacy and dignity.

Unlike litigation, mediation is empowering and non-adversarial.

Litigation focuses on assigning blame and punishment while

mediation does not assign blame or punishment. Mediation seeks to

invent solution to a mutual problem through cooperative problem-

solving.

Unlike litigation which is emotionally devastating (as the parties

may be instructed not to talk to each other to voice their concern),mediation is emotionally healthy.

The mediation process allows the parties to meet each other,

mutually understanding each other, promote emotional healing,

and preserve ongoing relationshipsbetween them.


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The success of mediation depends on the willingness of the

parties to work together in good faith and the ability of the

mediator to properly manage the mediation process. While the

parties have ultimate control over their participation in the process,the mediators' management of the discussion makes it more

structured.

The mediator must demonstrate patience, insight, and

psychological fitness to convince parties to modify their

entrenched positions and to reach to a mutually acceptablesettlement agreement, preferably an enforceable written

'agreement' that enforce as a contract in a court of law.

Thus, mediation as a consensual process of settling disputes

through a neutral mediator is the best form of ADR that can help

disputants to settle their disputes promptly, cost effectively,privately and confidentially.


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Trends in Mediation in Malaysia

KLRCA

MMC (Bar Council)

Malaysian Chartered institute of Arbitration Financial Mediation Bureau (FMB)

Biro Bantuan Guaman (BBG)

Industrial Court

Court -Annexed Mediation


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MEDIATION ACT 2012

MEDIATION has long been embraced in Malaysia as a form of alternative

dispute resolution (ADR). Several professional institutions such as theMalaysian Mediation Centre and the Chartered Institute of Arbitrators

provide mediation services using their respective codes of ethics and

rules.

The Mediation Act 2012 (Act) was recently introduced by Parliament, andcame into force on Aug 1, 2012 with the aim of promoting and

encouraging mediation as a method of ADR and to facilitate the

settlement of disputes in a fair, speedy and cost-effective manner.


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The Act

"Mediation" is defined under the Act to mean a voluntary process in

which a mediator facilitates communication and negotiation betweenparties to assist them in reaching an agreement.

The Act does not apply to: (1) mediation conducted by courts; (2)mediation conducted by the Legal Aid Department; and (3) mattersexpressly excluded in its schedule (such as proceedings on the FederalConstitution, the remedy of temporary or permanent injunctions, and

any criminal matter).

The Act does not oblige parties to mediate before litigation orarbitration.

Also, parties may choose to mediate simultaneously with any civil court

action or arbitration. Where proceedings have already commenced, mediation does not act as

a stay or extension of proceedings.


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Steps to commence mediation

First, a person may initiate mediation by sending to the other party a

written invitation to mediate, specifying the matters in dispute. The Act sets out how an invitation will be deemed accepted or rejected by

the other party.

Upon commencement of mediation, parties must enter into a written

mediation agreement, which: (1) contains an agreement to mediate; and

(2) deals with matters such as the appointment of a mediator and costs.


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The mediator

Only a person who: (1) possesses the relevant qualifications, knowledge

or experience in mediation through training or formal tertiary education;or (2) satisfies the requirements of an organisation which providesmediation services, can be appointed as a mediator under the Act.

A mediator is required to disclose, before accepting the appointment, anyknown facts that a reasonable person would consider likely to affect hisimpartiality as mediator in the outcome of the mediation.

A mediator must act independently and impartially, with a view toassisting the parties to reach a satisfactory resolution of the dispute andsuggest options for the settlement of the dispute.

A mediator will not be liable for any act or omission in the discharge ofhis functions as a mediator unless the act or omission is proved to havebeen fraudulent or involves wilful misconduct.


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Confidentiality

A mediation is conducted privately.

In the same vein, the Act also prohibits the disclosure of anyoral or written statement made during or in relation to amediation, subject to some exceptions.

This essentially provides a significant boost for mediation inaddressing the issue of confidentiality; one of the primary concerns

of litigants in a mediation process.

Settlement agreement

Upon the conclusion of a mediation and the reaching of an

agreement, the parties must enter into a binding settlementagreement.

If proceedings have been commenced in court, the settlementagreement may be recorded before the court as a consent

judgment or judgment of the court.


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KLRCA MEDIATION RULES (Revised 2013) Application of the Rules

Commencement of Mediation Proceedings

Appointment of the Mediator

Role of the Mediator

Role of the Parties

Authority and Representation

Confidentiality Proceedings

Termination of the Mediation

Costs

Administrative Assistance Exclusion of Liability

Role of Mediator in Other Proceedings

Schedule of Fees


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KLRCA MEDIATION RULES (Revised 2013)

The KLRCA Mediation Rules are a set of procedural rulescovering all aspects of the Mediation process to help parties

resolve their domestic or international disputes.

With the all new Mediation Rules, KLRCA aim to promote

mediation as a viable commercial option for parties inMalaysia and abroad as interest-based mediated negotiations

can result in settlements that are more satisfactory to all

parties than simple compromise decisions. The streamlined

new rules ensures that the mediation process addresses all

parties' interests which in turn will preserve the workingrelationship of parties and ensure those who negotiate their

own settlements have more control over the outcome of their

dispute.


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Application of the Rules These rules apply to any Mediation of any present or future

dispute where the parties have agreed that the KLRCA

Mediation Rules (theRules)will apply. Where any of the Rules is in conflict with the provision of law

from which the parties cannot derogate, that provision prevails.

Commencement of Mediation Proceedings

Any party/parties wishing to commence Mediation

proceedings pursuant to the Rules shall give to KLRCA awritten Request for Mediation which shall contain thefollowing:- The names, addresses (including e-mail addresses), telephone

numbers of the parties and any legal or other representativesinvolved;

A reference to any Mediation clause or a copy of the separateMediation agreement, if any;

A reference to the contract (if any) or other legal relationship (ifany) out of or in relation to which the dispute arises;


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Upon receipt of a written Request for Mediation under Rule 3,

KLRCA shall send a copy of the Request for Mediation to the

other party/ parties named. The Mediation process shall be deemed to have commenced

when KLRCA receives written notice of the other

partys/partiesacceptance of the Request.

If the other party/parties reject(s) the Request or if KLRCAdoes not receive a reply within 30 days from the date of

KLRCAs written notice of the Request under Rule 4, KLRCA

may elect to treat this as a rejection of the Request and

inform the party/ parties initiating the Mediation accordingly.


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Appointment of the Mediator

Where all parties have agreed upon a proposed Mediator, who is willing to

serve and is not disqualified under Rule 10, the parties will jointly appoint

that person as the Mediator.

If, within 30 days of the Request for Mediation under Rule 4, all parties

have not agreed upon a proposed Mediator willing to serve and not

disqualified under Rule 10, then the Director of KLRCA shall appoint the

Mediator and the parties are deemed to have approved the appointment

made by the Director of KLRCA.

There shall be one Mediator unless the parties otherwise agree.

No person may act as a Mediator in any dispute in which that person has

any financial or personal interest or any conflict of interest likely to affect

or which might reasonably be perceived to affect the Mediators

independence or ability to act impartially at all times, save where the

parties have been notified in writing of such circumstances and have

subsequently expressly consented in writing to the appointment of a

Mediator.


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If, following appointment, a Mediator becomes aware of any

circumstances that may create a reasonable perception of

bias, partiality or lack of neutrality, the Mediator shall

immediately so inform the parties and, where the Mediator

was appointed by KLRCA, shall immediately inform KLRCA. If

any party objects to the continued service of the Mediator,

the Mediator shall be disqualified. In this event, the parties

will have a further 30 days from disqualification of theMediator to appoint a new Mediator. In the event that the

parties do not within such 30-day period agree upon a

substitute proposed Mediator willing to serve and not

disqualified under Rule 10, then the Director of KLRCA shall

appoint the Mediator and the parties are deemed to have

approved the appointment made by the Director of KLRCA.


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Role of the Mediator

The Mediator shall assist the parties in an independent and impartialmanner to reach an amicable settlement of the dispute.

The Mediator may conduct the Mediation in such manner as the Mediatorconsiders appropriate, having regard to the circumstances of the dispute,the wishes of the parties and any practical considerations which might berelevant for the satisfactory and prompt resolution of the dispute.

Prior to or during the Mediation, the Mediator may communicate with theparties together, or with any party separately, with or without itsrepresentatives, either in person, by telephone, videoconference orelectronically as the Mediator sees fit.

The parties may be required by the Mediator to participate in apreliminary conference prior to the commencement of the formalMediation. The purpose of the preliminary conference is to enable theparties, with the assistance of the Mediator, to:- Discuss and agree upon issues in dispute or formulate a process by which

those issues are to be clarified and agreed; Make provision for, in accordance with the Mediators directions, the service

and exchange of documentary material relevant to the Mediation includingposition papers by all parties;

Make provision for such other planning and administrative arrangements asare necessary and appropriate to enable the Mediation to proceed.


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Role of the Parties

Each party to the Mediation has a duty to participate in good faith in the

Mediation. Each party and their representatives will use their best endeavours to

co-operate with each other and with the Mediator to settle their differences.

Authority and Representation

Each party to a Mediation may be assisted or represented by any person it chooses

(including legal advisers). The identity, contact details and roles of any such

persons must be disclosed to all parties and to the Mediator.

Each party to the Mediation must have authority to settle a dispute or berepresented by a person or persons having full authority to settle the dispute. In

the event that any such authority is limited, the limits of authority must be

disclosed to the parties and the Mediator.


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Confidentiality

All mediation proceedings shall be private and confidential. Allparties and participants in the Mediation shall execute a written

undertaking in the form of the Confidentiality Undertaking asprovided for in Schedule A to give effect to this requirement.

Any information given to the Mediator by a party in caucus orprivate session shall be kept confidential as between the partyfurnishing the information and the Mediator unless the partyproviding the information consents to its disclosure to any other

party to the Mediation. The Mediator, all parties and participants in the Mediation must

keep all matters relating to or arising out of the Mediation privateand confidential except:- Where disclosure is compelled by law;

If necessary to give effect to a Mediation agreement or to enforce anagreement reached to settle or resolve the whole or any part of thedispute;

With the consent of the parties to the Mediation.


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Proceedings

Unless parties agreed otherwise, the Mediation proceedings shallbe held in the KLRCA premises.

The parties will be notified of the time and venue of the Mediationproceedings which shall be subject to the partiesagreement.

The parties shall ensure that they have all necessary additionalservices where required for the Mediation.

Termination of the Mediation

The Mediator may suspend or terminate the Mediation or withdrawas Mediator when he or she reasonably believes the circumstancesrequire it, including when he or she has reasonable grounds tosuspect that:- The parties are involved in illegal/fraudulent conduct; or

The parties are unable to participate meaningfully and reasonably innegotiations; or

Continuation of the Mediation process would cause significant harmto any party or a third party.


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When the Mediator determines that it is necessary to suspend orterminate a Mediation or to withdraw, the Mediator must do sowithout violating the obligation of confidentiality and in a manner

that will cause the least possible harm to the parties. The Mediator shall promptly inform the Director of KLRCA of the

termination.

In addition to termination occurring under Rule 25, the Mediationshall be deemed to be terminated upon:- Upon the signing by the parties of a written settlement agreement;

A written declaration of the Mediator, after consultation with theparties, to the effect that further attempts at Mediation are no longerjustified;

A written declaration by any of the parties addressed to the Mediatorto the effect that the Mediation is hereby terminated; or

Expiry of 3 months from the date of the Request for Mediation underRule 4 unless agreed otherwise by the parties; or

By order of the Director of KLRCA in the event that any moniesproperly payable under Rule 30 are not paid as required by theseRules.


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Costs

Unless otherwise agreed or ordered by a court or arbitrator, each partyshall bear its own costs of the Mediation.

The costs and expenses of the Mediation shall include but are not limitedto:- The professional fees of the Mediator;

The cost of the venue hire, including meeting rooms, breakout rooms, meals,translation fees, photocopying fees, internet access, telephone andcommunication expenses, administrative costs incurred under Rule 30(d), andany other costs reasonably and properly incurred in respect of the

organisation or conduct of the Mediation; Any fees or costs set out above in respect of expert advice or expert witnesses

who attend or provide such advice with the consent of the parties;

The proper administrative charges of KLRCA relating to the conduct of theMediation fixed in accordance with this Rule. Without limiting the foregoing,the costs of KLRCA may include:-

The Registration Fees;

Appointment Fee and

Any Administrative Costs.

The parties are jointly and severally liable for costs and expenses set out inRule 30 above.


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Administrative Assistance

Subject to Rule 24 above, the Director of KLRCA may arrange for

translators, administrative assistance, and/or other facilities in order to

facilitate the Mediation at the request of the Mediator or the parties.

Exclusion of Liability

Except in the case of fraud on the part of KLRCA or the person claiming

immunity or protection from suit under this rule, neither KLRCA nor the

Mediator shall be liable to any party or to any other participant in the

Mediation for any act or omission in relation to or arising out of theMediation conducted under these rules or in respect of or arising out of

any settlement reached in any Mediation conducted under these rules.

All statements whether written or oral made in the course of the

Mediation shall not be relied upon to institute or maintain any action for

defamation, libel, slander or any related complaint.


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Role of Mediator in Other Proceedings

The Mediator shall not, without the consent of the parties, act

as an arbitrator or as a representative or counsel of a party orappear as a witness in any arbitral or judicial proceedings or

give advice to any person whatsoever in respect of a dispute

that is the subject of the Mediation.

The parties and the Mediator agree that they will not present

the Mediator as a witness in any such proceedings, nor will

they subpoena or endeavour to compel the Mediator to give

evidence or to produce documents in any subsequent judicial

proceedings or arbitration.


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Schedule of Fees

Parties are free to agree with the Mediator on the MediatorsFees. Unless

otherwise agreed, the Schedule of Fees shall apply.

The Schedule of Fees provides the fee scale for international and domesticMediation.

An internationalMediationmeans a Mediation where

One of the parties to the Mediation has its place of business in any

State other than Malaysia;

Any place where a substantial part of the obligations of any

commercial or other relationship is to be performed or the place

with which the subject matter of the dispute is most closely

connected is in any state other than Malaysia; or

The parties have expressly agreed that the subject matter of the

Mediation relates to more than one State.

A domestic Mediation is any Mediation which is not an

internationalMediation.


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Prior to the commencement of the Mediation, each party

shall pay the Registration Fees, Appointment Fee (if any) and

deposit the Mediators Fees and Administration Costs withthe KLRCA in accordance with the Schedule of Fees annexed

hereto.

At any time during the course of the Mediation the Director of

KLRCA may require additional deposits to be paid by theparties on account of the costs and expenses referred to in

Rule 30. Any additional such sums requested by the Director

of KLRCA on account of the costs and expenses referred to in

Rule 30 shall be payable 15 days after the receipt of the

request for additional deposits.


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If any of the monies referred to in Rules 29 and 30 are not paid in full by

both parties within 15 days after the receipt of the Request, the Director

of KLRCA shall so inform the parties in order that one or another of them

may make the required payment. If any such payment is not made, the Mediator, after consultation with the

Director of KLRCA, may order the suspension or termination of the

Mediation.

The Director of KLRCA may apply the deposit towards the fees and

disbursements incurred by KLRCA and the Mediator for the Mediation.

Upon termination of the Mediation, the Director of KLRCA shall render an

account to the parties of the deposit received and used and return any

unexpended balance to the parties.

The End

Concept of Adr

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