CONCILIATION AND MEDIATION
alternative methods of a dispute settlement
I. Generally
The term „alternative methods of a dispute settlement“ is defined as an alternative to the forms of settling a dispute, for which the state provides its guarantees by a public power (i.e. towards the legal process as well as an arbitration process).
The experts of the Arbitration Court of the Czech Republic use this term to define the methods or processes, which show cumulatively the following attributes:
a) willingness of the parties to submit to this way of proceedings and to negotiate within the frame of it. The parties designate a person, who mediates their negotiation and subordinate voluntarily to it.
b) the flow of the process and its effects off the direct reach of the state legal regulation (commencement, flow or termination of processs do not have any material law or process law effects, the third parties operating in this process do not have any enforcement or decision-making competencies).
c) A successful result is not issuance of an execution title. A successful result is an agreement settling the controversial issue. However, this may become, depending on the formulation of its content an execution title depending the conditions in the specific legislation. For instance, within the reach of the Czech law, it is possible to refer to the deeds in the meaning of Section 274 c) of the Civil Court Procedure.
This method of settling disputes accentuates the negotiating not the judging basis. The factor influencing principally a success level of these solution methods is a person of a mediator, conciliator, who controls principally the course of the disputes and her or his skills influence substantially the opinions of the parties.
The settlement of disputes in this manner brings about a lot of advantages. For instance, it is possible to state:
1) Lower costs compared with the legal and arbitration process. Both the costs of the procedure itself and the costs of the legal representation are undoubtedly lower.
2) The time, i.e. both the time concerning the length of the dispute and the time falling on the transaction, to which it concerns. Within the frame of this procedure, it is not necessary to keep any formalities or the terms, which usually prolong the whole legal process.
3) A greater chance of preserving the confidence between the business partners. It is stated, that the mentality of the parties within the frame of this procedure is different than in the legal or arbitration process. As opposed to these types of procedures, where the „win-lose“ principle rules, here, a seeking-compromise atmosphere should be constituted. This is not a „process led in hostile spirit“, but the process „conducted in the cooperative spirit“.
4) Solution, which does not have to be in „harmony with the law“, but undoubtedly it is in harmony with the interests of the parties.
II. Suitable Sections for the Conciliation Clause
This type of clauses is quite regularly combined with the arbitration procedure. This is also the case of the Arbitration Court of the Czech Republic, which offers its clients a possibility of utilizing the the so-called conciliation clause, which combines in itself the elements of the conciliation law and the arbitration law, where the arbitration law is applied secondarily, where no consensus could be reached within the term set by the conciliation clause.
The advantage of a conciliation procedure is in particular the fact, that the procedure may be conducted very informally. Suitable areas for application of this method of a dispute settlement are for instance:
- deliveries of capital equipment. The legal proceses or equal procedures implemented during the development could in this case lead to an interference with the development schedules, disturbance of mutal relations and in the final result to a jeopardy of the development,
- partnership agreements. Here the legal processes could jeopardize the actual existence of the company,
- distribution agreements, franchising agreements, cooperation agreements, all types of transfers of technologies based on the license agreements,
- large financial operations.
These are cases, when long-term business relations are at issue and the interest in their future fulfillment is bilateral.
The Arbitration Court of the Czech Republic adds that UNCITRAL is preparing a specimen law dealing with this issue (solving for instance also the issues of limitation (lapse) and preclusion).