Dear all,
Overcome Deadlocks in Commercial Disputes Mediation
I am
Natalia Cheung, a Hong Kong International Arbitration Centre (HKIAC) Accredited
Mediator and a practising solicitor in Hong Kong.
I would like to share with you some information on overcoming deadlocks
during mediation of commercial disputes.
The following is some common causes of deadlocks in commercial disputes,
and the suggested solutions to overcome the deadlocks.
Evidential issue
Cause:
In some cases, representatives of corporate parties at mediation meeting
may not be the persons who are directly involve in the dispute. They may then
be unfamiliar with or may have little knowledge of the facts or background or
the key evidence of the dispute.
This evidential issue may put the parties in a situation where they are
not ready or are unwilling to offer or accept settlement proposals.
Solutions:
Parties may be invited to voluntarily disclose the facts and evidence
relevant to the dispute during mediation.
If such voluntary disclosure is refused, parties can be suggested to
adjourn the mediation until further facts or evidence is disclosed through the
discovery process or exchange of witness statements under the rules of court.
Legal issue
Cause:
Sometimes when the parties do not have sufficient or proper
understanding of their legal rights or positions, they may then become very
entrenched in their legal rights and positions. E.g. Parties hold an unrealistic
expectation that they would definitely recover all their costs and expenses if
they win in the court case. Corporate parties may also overlook the adverse impact
that court proceedings may bring to the operation and reputation of their
businesses.
Solutions:
Bring up issues for the parties to discuss with their legal representatives
during waiting time.
Suggest parties to seek legal advice so as to enable them to have a more
realistic assessment of their legal positions and rights before making any
decision on a settlement proposal.
Authority issue
Cause:
It is not uncommon that the parties who attend mediation on behalf of
their corporations only have limited authority or even no authority to settle
the dispute.
This is particular the case for some large and/or multinational
corporations e.g. banks, large insurance companies, listed companies in which their
decision making process involve complex and various procedures and personnel.
Solutions:
Ensure corporate parties to attend the mediation with proper and full
authority to settle the dispute in full or in part before commencement of
mediation e.g. by requesting for board resolution or authorization letter from
the corporation.
Suggest parties to seek permission/authority from their corporations to
consider and accept/reject a settlement proposal on the mediation spot through
email or telephone.
Suggest parties to agree to continue to mediate, and to record within
their limited authority to mediate or settle the dispute.
Adjourn the mediation until the corporation has granted sufficient authority
to the attendees of the mediation to mediate and settle the dispute.
Capacity issue
Cause:
Sometimes, corporate parties may have financial difficulty in complying
with the settlement proposals eg. payment terms.
Solutions:
Help parties to ascertain their financial capacity and difficulties in
fulfilling the settlement proposal.
Suggest parties to reach consensus on some essential settlement terms
first and then discuss the details of the settlement proposal like payment by
installment or payment schedule within a reasonable timeframe.
For further information on mediation, please contact Ms. Natalia Cheung
[(852)-6777 5767]
E-mail: natalia@plaw.hk
Natalia Cheung
HKIAC Accredited Mediator & Hong Kong Solicitor
Pang Kung & Co., HK Solicitors & Notaries & Civil Celebrants of Marriages
Disclaimer: The above is for your information and reference
only. The contents do not constitute legal advice or a substitute for legal
advice in individual cases.