International Commercial Mediation

International Commercial Mediation

In today’s global economy, companies operating internationally may find themselves in a dispute that will be litigated in a foreign country. The dispute could involve anything from breach of contract claims, product liability (including manufacturing and design defects) to claims of fraud (with possible awards of punitive damages).

Initiating a lawsuit against a foreign company in your home country would require obtaining jurisdiction over the company and compelling them to litigate there. However, depending on the claims being made in the lawsuit, jurisdiction could be compelled to take place in the foreign country where different judicial rules may be applied. Needless to say, the cost of litigating an international dispute could be an enormous expense with no guarantee of a positive outcome.

Mediation of an international dispute would provide the most advantageous alternative to litigation. Mediation not only saves time and money, but it also provides flexibility and enables the parties to structure the mediation in a manner that benefits both sides. Mediation helps to preserve and improve relationships between parties and shows respect and value for the parties involved in a conflict. Mediation also allows the parties to look beyond the legal issues and determine their underlying interests in the dispute. From this perspective, they may devise solutions that advance each of their respective interests. The possibility that mediation can result in a “win-win” solution for both parties is one of its most attractive aspects.

Any party may initiate mediation by making a request to the other party to mediate a dispute. The parties would enter into an agreement to mediate the dispute and set forth the required qualifications for a mediator, the language to be used, the location of the mediation, and how the mediation will take place (via telephone conference, use of Zoom or other electronic or technical means, or in-person). The parties may agree to exchange documents pertinent to the dispute, exchange memoranda on the issues, and structure other procedural matters. The mediator may conduct separate meetings (caucus) with the parties and/or their representatives as well as joint meetings. The mediator will attempt to help the parties reach a satisfactory resolution of their dispute. A mediator may make oral or written recommendations for settlement to a party privately, or if the parties agree, to all parties jointly.

Subject to applicable laws or the agreement of the parties, what is said in mediation will not be used in later proceedings should the mediation prove unsuccessful. This allows parties to more freely engage in the process of settlement without concern that what is revealed in mediation may later be used against them.

If the parties settle their dispute, a settlement agreement is prepared and signed by all parties and their representatives. The settlement agreement can contain a clause that if the settlement agreement is breached the parties agree to submit the matter to binding arbitration. The arbitration provider, choice of language, and locale can also be set forth. This would be far superior to having to go through the time and expense of obtaining a judicial judgment and then have to proceed in recording and enforcing that judgment, which could, eventually, lead the parties back into another long, expensive judicial proceeding.