ALTERNATIVE

DISPUTE
RESOLUTION
Mediation & Adjudication
BY AHMAD ARZLEE HASSAN
THIS WEEK
What is ADR?
Mediation & Conciliation
Adjudication
CIPA Act 2012
Ugli Orange: Recap
 Ending up in Dr Jones v Dr Roland
situation
 Dilemma: Both parties with own particular
objectives
 Negotiation can be confrontational and
highly adversarial
 One party may use whatever advantage
they have over another
 Win-win situation?...... unlikely

NEGOTIATION MIGHT NOT BE SUITABLE ALL THE TIME

Alternative Dispute
Resolution ADR
the fuss and buzz? is it necessary?
 What is ADR?
 Techniques designed to help the parties to achieve a
settlement of their disputes.
 To obtain an amicable solution using the least of time,
expense and resources.
 Generally requires an independent third party and the
outcome can be non-binding but with exceptions.
 ADR includes: mediation, conciliation, disputes review
board and expert determination, etc.
 The terminology has no precise meaning, is used loosely
and hybrids are possible, and in practice tend to
merge.
Function of the 3rd party
 The involvement of 3rd party can be in
various forms and intensity:
 Bringing the parties to the negotiation
table
 Assisting with the negotiation process
 Providing a neutral assessment of the
situation
 Making settlement proposals
 Give a binding/temporarily binding
decision (e.g. for Arbitration &
Adjudication)
General Characteristic of ADR
ADR is consensual, thus:
✓ There must be an agreement
✓ Must agree on the procedure
✓ Agreement to appoint the 3rd party
✓ The effect of decision/recommendation at
the end of ADR depends on the agreement-
whether it will be binding or not
✓ It is conducted on a “without prejudice” and
confidential basis.
ADR in Malaysia
• Currently in Malaysia, there is no obligation to use
ADR before going to Arbitration or Court.
• Unless there is pre-condition in the contract that
dispute must be through some ADR methods
before going to Arbitration or Court.
• Generally decision/recommendation at the end
of ADR procedure are not final and binding,
unless parties agree that it should be final &
binding.
PRO CON
 No general disclosure of
documents/evidence
✓ Speed & Flexibility  Early disclosure of each
✓ Control party’s case can be
damaging
✓ Cost  Outcome is non-binding
✓ Preserved business  Sometimes use as a
relationships delaying tactic.
✓ Consensual –  Can be prone to error
satisfactory and unfairness.
outcome  Uncertainty as to
✓ Settlement is privilege of disclosures in
confidential and any subsequent legal
privileged. action
 Inequality of bargaining
position & representation
To ADR or not to ADR?
ADR Will not be appropriate:
✓ When one party has no genuine interest in
settlement
✓ When a legal ruling or precedent from the
court is required
✓ When one party needs a protective court
order, e.g. –injunction or specific
performance of a contract.
Mediation & Conciliation
Assisted Negotiation
Terminology
 The term “mediation” is often used
interchangeably with “conciliation”, and
there is no national or international
consistency of usage of these terms.
 Both is voluntary and confidential assisted
negotiation held on a without prejudice
base, aided by a skilled neutral 3rd party.
 The 3rd party role is to assist the parties to
find their own agreed solution, NOT to
imposed his decision on the parties.
 Sometimes mediation is understood to be
more pro-active and evaluative than
conciliation, and sometimes the reverse.
Mediation?
Parties engage a mediator
who is an impartial third
party
The mediator assists the
parties to negotiate their
own solution to the dispute.
The parties can agree on
whether the mediator
should consult them
separately, jointly or both.
Cannot compel the parties to
reach a settlement although the
mediator may take a very
persuasive approach.
Conciliation?
Parties appoint a
neutral 3rd party call
conciliator.
The conciliator takes a more
proactive role than a
mediator.
Will issue a non-binding
recommendation in the
event where settlement is
not reached during the
conciliation process.
Mediation Agreement
 Because mediation is voluntary, it cannot
take place without agreement.
 It may be agreed from the outset as part
of the contract in one of the clauses.
 Usually as precondition before parties can
refer their dispute to arbitration.
 Example; CIDB clause 47
Mediation Process
1st Meeting- Conduct
Appoint meeting-
brief Parties present
mediator statement their cases

Termination of Mediator draft Joint/Separate

Mediation. agreement
sessions with
Settled? Or based on parties
proposals the parties
No?

If No
settlement can
proceed to
Arbitration/
Court
Mediator?
 Must be an impartial third party
 Must be effective in helping the parties discuss
their differences and to agreed on solutions.
 The mediation procedure usually closely
connected to the appointment of the mediator.
If the mediator was appointed by an institutional
body, the procedure will likely be provided by the
institute.
 The mediator may be facilitative or evaluative, or
a combination of both
 No immunity from negligence claims thus must
practice duty of care.
Under CIDB 2000

Refer to S.O.

Mediation

Arbitration
Mediation: CIDB Version
 Under CIDB clause 47, a decision by the
S.O. is a condition precedent to a dispute
coming into existence.
 So, reference to mediation can only be
made after receiving S.O.’s decision.
 Mediation is a condition precedent to
arbitration
 The purpose is to give parties the
opportunity to achieve settlement without
the need to go to arbitration.
CIDB 2000
Mediation: PAM Version
 Upon written agreement of both the Employer
and Contractor , the parties may refer any
dispute to mediation.
 Mediation process under PAM may be
commenced at any time by one party giving
written notice to the other requesting
agreement to refer disputes to mediation.
 Mediation is not a condition precedent to
arbitration.
PAM: Mediation