Mediation booklet

Insight in ICC Mediation Turning Conflict into Opportunity

Purpose of the Mediation Brochure This brochure introduces businesses to ICC Mediation as an effective and efficient alternative to traditional dispute resolution methods, such as litigation. It offers a clear explanation of how mediation works under the ICC Mediation Rules and highlights the potential benefits of using this approach to resolve disputes. By reading this brochure, companies will gain the insights needed to make informed decisions, with the ICC serving as a trusted, global institution for impartial and professional dispute resolution.

This brochure was developed in collaboration with:

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Table of Contents

What is Mediation?

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Mediation in the International Business Context

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Why ICC Mediation?

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How do you agree to Mediation?

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How does ICC Mediation work?

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The costs and duration of Mediation

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What is Mediation?

Mediation is a form of dispute resolution in which the parties, through confidential negotiations led by a professional independent and neutral mediator, together seek an optimal solution for each of them.

Most common types of styles of Mediation:

Facilitative: The mediator focuses on empowering the parties and helping them recognize each other’s perspectives in order to find a mutual solution.

The mediator does not offer solutions or take sides , but instead facilitates communication, ensuring that each party has a chance to express their views and concerns.

Evaluative: The mediator assesses the dispute and offers opinions or recommendations on how the issues may be resolved. This could involve suggesting possible solutions or even advising the parties based on the mediator’s expertise or understanding of the case.

Transformative: This style prioritises improving communication and interaction between parties over directly solving the issue at hand. The idea is that by fostering better understanding, empowerment, and mutual recognition, the parties will be empowered to address and resolve the underlying problem themselves.

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Mediation in the International Business Context The international business community benefits from the fast and efficient resolution of business disputes. Increasingly, the most diverse disputes are resolved with the help of professional business mediators.

Breach of contract, problems in cooperation, and other, sometimes complex, issues often have a major financial interest. Mediation enables parties to achieve an outcome that would be impossible through arbitration or legal proceedings, such as renegotiating a contract.

In legal proceedings, the legal context is leading, while mediation helps parties to also take commercial and other interests into account in their considerations. The mediation process can help those involved to gain a better understanding of each other’s interests and needs. Business mediation can be a better option than going to a (government) judge or an arbitrator.

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Potential benefits of mediation include: Short procedure:

Appointment by parties:

Mediation usually involves one or more sessions of half a day or a whole day. The total duration can vary depending on multiple factors. Despite these variables, mediation is typically much faster than litigation.

Parties can jointly appoint a mediator, with or without special expertise or language skills, who enjoys their mutual trust and/or has an influence on the appointment.

High chance of success:

The parties involved can, in consultation with the mediator and, based on the characteristics of the dispute, design the mediation process themselves. In this way, they determine together where, how, when, and in which language the mediation will take place.

The mediator mediates between the parties and does not decide for them. Under the mediator’s guidance, the parties themselves negotiate the outcome of their dispute. That outcome is binding.

The mediator is, by definition, independent and neutral and should treat the parties fairly and impartially.

Binding outcome: 80 to 85 percent of business disputes in which mediation is used lead to a resolution. Low costs: Due to the short duration and the design of the process, the costs of mediation are considerably lower than those of a judicial or arbitration procedure.

Flexibility:

Confidentiality: Because mediation is strictly confidential, the parties involved can talk openly with each other.

Nothing that is discussed or brought up during mediation may be shared with others.

Focused on the future: Resolving the dispute, restoring trust, and continuing the business relationship are usually the leading principles in mediation.

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Built on a Century of Experience: ICC’s Integrated Approach to Dispute Resolution When selecting a mediation institute, parties typically consider two key factors: The experience, quality, and reputation of the institution; and The design and reliability of its mediation rules.

The ICC International Centre for Alternative Dispute Resolution scores highly on both counts. It is widely recognised for its professionalism and is often chosen in tandem with arbitration through the well-established ICC International Court of Arbitration.

Established in 2001, the ICC Centre for ADR has built a strong track record in managing international mediations. Its transparent and predictable fee structure, based on fixed rates, ensures clarity and confidence from the outset.

ICC Mediation is governed by the ICC Mediation Rules, which provide a clear and neutral framework. This spares parties from having to negotiate procedural details after a dispute has arisen. Backed by the authority of the International Chamber of Commerce, a global business organisation active in over 90 countries, ICC Mediation is broadly accepted by companies and stakeholders worldwide.

It is important to note that the success of mediation depends heavily on the commitment of the parties involved.

To increase the chances of a successful outcome, it is essential that: The right individuals with decision-making authority are present at the table; Company representatives are actively engaged in the process; and Parties allocate sufficient time and resources to reach a resolution.

If no agreement is reached, parties still retain the option to move forward with arbitration or litigation before a national court.

Mediation Guidance Notes Mediations can be conducted in different ways, depending on the background of the parties involved, the mediator, and the nature of the dispute. The Mediation Guidance Notes offer guidelines to help the parties make informed decisions about organising the mediation process. These guidelines are based on current best practices in mediation and align with the flexiblility of the ICC Mediation Rules. The purpose of the Mediation Guidance Notes is to guide aspects that require attention when choosing and organising mediation.

The Mediation Guidance Notes are available online at: https://iccwbo.org/news-publications/arbitration-adr-rulesand-tools/icc-2014- mediation-guidance-notes/

How do you agree to Mediation?

By including a provision in their contract, parties agree to resolve their future disputes through mediation. If an ICC Mediation clause is included, the case will be handled according to the ICC Mediation Rules by a mediator affiliated with the ICC International Centre for Alternative Dispute Resolution (ADR). In that case, the institute assists the parties in selecting and appointing the mediator, organising and supervising the mediation.

ICC has various model provisions that can be included in contracts. One of them stipulates that if the parties do not reach a solution through mediation, the dispute will be settled by arbitration.

The parties have not agreed on mediation in their contract. Is it still possible to start mediation? Yes, if the contract does not contain a mediation clause, the parties can opt for mediation, after a dispute has arisen. They can then also go to the ICC International Centre for ADR.

Model clauses Parties can include an ICC Mediation clause in their contract in advance.

It is also possible to combine more than one option: first ICC mediation and if that does not lead to a solution, an ICC arbitration.

ICC has four possible model mediation clauses available for parties who wish to turn to ICC mediation or one of the other ICC dispute resolution methods. Parties are advised to include an appropriate clause in their agreements. The clauses can be adapted on the basis of national legislation and the specific wishes of the parties. It is also recommended to specify the language and place of the mediation.

Please note that a clause must be formulated clearly and unambiguously, as confirmed by the Dutch Supreme Court in a 2024 ruling. The clauses can be used for mediation, either in parallel with or prior to arbitration or other methods.

However, while mediation clauses are useful tools to promote constructive dispute resolution, full legal enforceability is not always guaranteed. A party can request the court or arbitration panel to be exempted from the obligation to mediate. The court or arbitration panel has discretion in deciding whether mediation must be enforced in that case.

These model clauses and their explanation are available online under www.iccwbo.org/dispute-resolution/dispute-resolutionservices/adr/mediation/mediations-clauses/

ICC recommends the use of the following clauses:

A | Option to use the ICC Mediation Rules The parties may at any time, without prejudice to any other proceedings, seek to settle any dispute arising out of or in connection with the present contract in accordance with the ICC Mediation Rules.

B | Obligation to consider the ICC Mediation Rules In the event of any dispute arising out of or in connection with the present contract, the parties agree in the first instance to discuss and consider referring the dispute to the ICC Mediation Rules.

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Obligation to refer dispute to the ICC Mediation Rules while permitting parallel Arbitration proceedings if required

In the event of any dispute arising out of or in connection with the present contract, the parties shall first refer the dispute to proceedings under the ICC Mediation Rules. The commencement of proceedings under the ICC Mediation Rules shall not prevent any party from commencing arbitration in accordance with sub-clause y below. (y) All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules.

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Obligation to refer dispute to the ICC Mediation Rules, followed by Arbitration if required

In the event of any dispute arising out of or in connection with the present contract, the parties shall first refer the dispute to proceedings under the ICC Mediation Rules. If the dispute has not been settled pursuant to the said Rules within [45] days following the filing of a Request for Mediation or within such other period as the parties may agree in writing, such dispute shall thereafter be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules of Arbitration.

How does ICC Mediation work?

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1 Submission of a request 4 ICC mediation begins with submitting a written request to the ICC International Centre for ADR (Article 2 ICC Mediation Rules, if there is no prior agreement between the two parties that ICC mediation will be used 5 3 of the ICC in conflict, the criteria for a request are listed in article mediation rules). The Form is available in English and French and can be obtained by sending an e-mail to mediation@iccwbo.org.

The Centre approaches the other party(ies) involved 6 and maps out their wishes regarding the mediator to be appointed. Based on the characteristics of the dispute and after an inventory of the wishes of the parties involved, the Centre suggests one or more suitable mediators. The Centre verifies whether the mediator is available and impartial. The latter means that the mediator is neutral and has (had) no ties with the parties involved, the persons involved in the dispute, or their family members.

2 Appointment of the mediator(s) The ICC International Centre for ADR has a global network of experienced business mediators with the most diverse specialisms, language skills, and (cultural) backgrounds, usually with expertise in the legal profession, business, or the judiciary. ICC mediators are trained as mediators and have extensive experience in resolving disputes between business parties, both domestically and internationally.

The criteria to consider in choosing the mediator: Competence (certificates, training);

Language;

Expertise (subject matter);

Nationality; Experience;

Style (facilitative, evaluative, etc.)

After the Centre has suggested one or more suitable mediators, it is up to the parties to choose or agree to the suggested mediator. If they cannot agree on a mediator or do not want to appoint a mediator together, the Centre will appoint the mediator. The wishes of the parties will be taken into account.

Initial steps in mediation After his or her appointment, the mediator will contact each of the parties and/ or their lawyers and have a private and confidential meeting with them either in person or in a video call to discuss the course of events during the mediation. Some mediators may let the parties give their side of the story. That will depend on the mediator involved. The mediator will then send a written proposal on how the mediation will proceed, partly based on the wishes expressed by the parties involved. The mediator will consult them about whether and, if so, which documents they will send him/her in advance and which persons will participate in the mediation.

Mediation can be either in person or online (video), depending on the parties` preferences. In ICC mediations, the parties are usually accompanied by lawyers and/or other advisors, but that is not strictly necessary.

The mediation will take place on a mutually agreed date and location. If the mediation is in person, most mediators will set aside a whole day for this unless the parties prefer more and shorter sessions. Online mediation is usually spread out over multiple sessions. Depending on his or her style, the mediator may start with a joint session, where those involved tell their stories and the issues are identified.

Communication disorders and misunderstandings are clarified. The mediator works on de-escalation if necessary. The underlying interests are inventoried. Other mediators may prefer mostly speaking to the parties separately or even mainly with the lawyers. In the confidential session, options for solutions are identified, and best and worst-case scenarios are discussed, should the mediation not lead to a resolution of the dispute.

When those involved confide in the mediator in a separate consultation, he or she sometimes sees possibilities for solutions that those involved had not previously envisioned.

Business disputes sometimes also have a personal component. For example, relationships are disrupted, making constructive consultation seem impossible. A professional mediator knows how to deal with this and usually manages to get those involved back on speaking terms. If necessary, the mediator will speak with those involved, individually, until a solution is reached.

3 The mediation agreement

At the start of the mediation, all attendees sign the mediation agreement, if they have not done it yet. This agreement contains the names of the parties and the mediator, a description of the dispute, provisions regarding costs, confidentiality, and secrecy, those involved to commit themselves to achieve a solution seriously, and finally, agreements on recording the result to be achieved.

4 The common stages of mediation The mediation process follows several steps, depending on the mediator’s style, each designed to help the parties communicate effectively, explore their options, and reach a resolution that works for everyone involved.

Introductory interview

Step 1: Introductory interview The parties decide to mediate and prepare for the process.

Step 2: Opening Opening

Gathering of information

The mediator shares ground rules for mediation and/or shares their experience.

Step 3: Gathering of information The parties share their needs and the mediator tries to uncover their underlying interests.

Step 4: Negotiation Negotiation

The Parties find solutions to identified problem(s) with the help of the mediator.

Step 5: Closing Closing

The parties decide whether or not to reach an agreement.

When can a co-mediator or expert be used?

In some cases, it is desirable to appoint two or more mediators who work together on the same issue. This is also called co-mediation. Co-mediation can be used if multiple parties are involved in the case or if the parties would like to use mediators from different cultural backgrounds, expertise, or experience. Where relevant, the mediator can be assisted by an independent expert to advise the mediator on technical matters and thus assist in resolving the dispute.

5 Completion of the mediation: the settlement agreement When the agreement is reached, the mediator and/or the parties’ lawyers will lay down the resolution of the dispute in a settlement agreement.

If the parties do not reach a resolution, nothing discussed during the mediation may be brought forward in proceedings before the judge or arbitrator(s).

6 Enforcement

Based on the European Union (EU) Directive of 21 May 2008, which sets out measures to encourage the use of mediation across the EU Member States by establishing common standards for mediation processes, any settlement reached through mediation can be enforced by the courts of the EU Member States.

Read full explained procedure here

The costs and duration Depending on everyone’s schedule and other factors, the average mediation takes between six weeks and three months from the moment the mediator is appointed.

In urgent cases, mediation can even take place within a few days.

The ICC Centre for ADR monitors the progress of the mediation procedure and can contribute to a speedy process. The parties involved usually share the costs of mediation in equal parts. The costs consist of administrative costs and mediator costs.

The Centre calculates costs for guidance and administrative support based on the size of the dispute and applies maximum amounts. The Centre applies fixed hourly rates for the mediator. The Centre may stay or terminate the proceedings under the ICC Mediation Rules if any requested deposit is not paid.

Other forms of alternative dispute resolution Dispute boards In addition to mediation, the ICC facilitates other forms of alternative dispute resolution. For example, the ICC International Centre for ADR administers the procedures concerning so-called Dispute Boards.

Dispute Boards are set up during the term of a project to resolve disagreements between parties during the term of the agreement so that the parties can move on. The ICC Dispute Board Rules can also be declared applicable by the parties in advance in their contract

Arbitration Arbitration is a form of dispute resolution, that results in a judgment. This judgment binds the parties to the arbitration and can be enforced. An arbitration procedure offers possible advantages over ordinary (government) court proceedings.

These advantages come into play, for example, when two (international) companies (for example, a Dutch and an Indian) do not want to litigate in each other’s home country, a foreign law applies to their agreement (for example, English law) and/or the resolution of the dispute requires specific legal or technical expertise.

ICC International Court of Arbitration The Court was founded in 1923 by the ICC, the world business organisation, and has an excellent and modern arbitration code (last revised in January 2021). The ICC Court is the only arbitration institute in the world that provides for (mandatory and thorough) review of every arbitral award by the members of the ICC Court. This review is referred to as ‘scrutiny’ and is a guarantee for the quality of the arbitral jurisdiction of the ICC Court. This is important, among other things, because arbitration (unlike government jurisdiction) generally does not allow for appeal.

Dispute Resolution Methods: A quick comparison Aspect

Litigation

Arbitration

Mediation

Nature

Binding court process

Binding private process

Non-binding facilitated negotiation

Decision-maker

Judge

Arbitrator(s) chosen by parties

Parties, supported by neutral mediator (no decision)

Confidential?

Usually public

Generally confidential

Confidential

Flexibility

Fixed by legal rules

Limited, procedural rules apply

High — process shaped by parties

Time & Cost

Often lengthy & costly

Generally faster than court

Typically fastest & most cost-effective

Enforceability

Enforced by courts (depending on jurisdictions)

Enforceable under New York Convention

Only if agreement is reached

Yes

Limited grounds

No formal decision to appeal

Low — judge controls process

Moderate

Full control over process & outcome

Often adversarial

Less adversarial than court

Cooperative – aims to preserve relationships

Appeal possible?

Party control

Relationship focus

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info@ICC.nl

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This brochure was developed in collaboration with: