Business mediation is one of the professional mediation types dealing with various business disputes between two or more parties. Such disputes can occur between partners, senior company officials, or controlling shareholders. They can also occur between companies or between a customer and a company, ranging from contract interpretations, supplier payments, delays, and customers to partnership dissolution.
The aim of the process is to reach a mutually-agreed conclusion to the dispute without the involvement of court, which can be costly and time-consuming.
Section 79 (c) of the Courts Law, 1984, regulates the jurisdiction of the mediation process.
Business Mediation
Most mediation actions begin immediately after the outbreak of the dispute or while legal proceedings are pending in court. However, the sooner mediation begins in regards to the start of the dispute, the greater the chances of reaching better mediation agreements. Mediation conducted during court proceedings, whether initiated by the parties or by the court itself, saves fewer costs than mediation conducted before the proceedings begin.
One of the challenges in mediation that occurs after legal proceedings have begun is that each party examines whether continuing the court process serves its interests and whether it can achieve better outcomes there. This may affect the chances of mediation and the conduct of its final settlement.
One of the advantages of business mediation is the ability to reach solutions that do not take into account considerations made in court, such as maintaining a reputation and confidentiality, so that the dispute and its solution do not turn to outside parties and continue business relationships after creating a shield for communication and restoring trust between the parties.
Businesses exist to make money and be profitable. Conflicts, by their very nature, restrict business operations, harm profitability, and can even lead to a company’s collapse or dissolution. Mediation primarily aims to prevent this, but it can also save a lot of money just by managing the process, compared to the fees paid to lawyers and court costs in lengthy hearings.
If mediation begins after the start of legal proceedings, all legal material should be brought to the meeting, and lawyers representing the process may attend.
However, the presence in meetings varies according to necessity. In some meetings, a personal meeting with each side may be possible to create openness and understand their needs; other meetings may take place with or without lawyers, all according to the mediator’s need to conclude the dispute with agreement.
If the parties have reached agreements and the mediation agreement is drafted, it is presented to the court for a judgment. This means that the agreement has “teeth”, and is as binding as a court judgment at the end of a long and expensive legal process, but comes relatively quickly and at low cost, all if the parties have managed to compromise and maintain dialogue between them.
Corporate Mediation
This chapter addresses mediation between companies, internal organizational mediation, mediation against suppliers, and more. These conflicts require company managers to invest money and the lengthy amount of time that passes can stifle the company’s activities. In cases of internal organizational conflict, company managers may find themselves investing a lot of time in reconciling and connecting between different departments in the same business or employees who have been in conflict. Not only is this expensive, but also falls into an area where managers generally do not excel. This can lead to partial or complete organizational shutdown. In such cases, exactly a professional is needed to quickly diagnose the problem and find a solution. In the case of companies, it is necessary that the controlling owner or a senior entity is who made informed decisions.
Commercial Mediation
Commercial mediation includes preventing the dissolution of partnerships, drafting agreements between partners, distributing assets of dissolved partnerships, allocating business and commercial contracts, whether it involves an employee, supplier, or customer, and drafting various agreements between labor unions and company or organization management.
The market today is flooded with mediators. The chosen mediator must be agreed upon by both parties. How can you determine if a business mediator is the best fit for you?
- First, arrange an introductory meeting: In this meeting, you can clarify important details, ask questions, and see if there is a personal connection established between yourself and the mediator, which is necessary for the mediation to be a success. If you do not feel comfortable with the mediator, it will be challenging to reach solutions.
- Seek recommendations: You can easily search for recommendations online, and of course, there is no substitute for a word-of-mouth recommendation from someone who has already undergone mediation with that person.
- Look for an experienced mediator: Experience in mediation is important. As time passes, the mediator gains more experience and knows better how to reach a solution, how to make connections, and ultimately serves the process better. It is advisable to check if the mediator is a lawyer, what fields they specialize in, and what additional training they have.
Executing the Mediation Process
Unlike a judge or arbitrator, the mediator does not determine the verdict. Rather, they come to listen and use their experience, skills, and training to find bridges upon which agreements can be reached between the parties, thus ending the dispute without coercion. However, the agreement drafted at the end of the day – the mediation agreement – is binding, and can even be given the status of a court judgment.
The mediator is a neutral person who is not involved in the dispute.
The mediator is expected to meet with each party separately and then together, and there may also be meetings between the mediators if there is more than one, all depending on the complexity of the dispute and the number of participants. In any case, mediation and all that is said in it cannot be used as evidence in court and must be kept confidential.
Can a mediation agreement be annulled? For a mediation agreement to be binding, it must be approved by the court. If one wishes to annul it, one must approach the court that approved it and prove that it meets the annulment conditions as per the law: coercion, not made of free will or without full understanding of its content, concealment of information, lack of good faith, errors made in the agreement that cause its annulment, unreasonable deprivation, or illegal or extremely disrespectful demands.
Business disputes can even pose ramifications for the most profitable and successful businesses. Often, longstanding businesses with excellent business models close or are dissolved due to disputes among the controlling parties. It doesn’t have to be this way. Sometimes a professional mediator who is an expert in the specific field of the business can read the situation and navigate it to a mutually-agreed and binding solution. This will save a lot of money and time, done by agreement, with the parties controlling the process and the mediation agreement, and done discreetly without damaging the business’s reputation or publicizing the dispute or its resolution.
Our office specializes in mediation, where you will find mediators who are experienced lawyers, happy to meet with you, advise you, and answer any questions.
Feel free to contact us via the chat on the website or call: 055-9826594.