Mediation as a Dispute Resolution Tool

Conciliation procedures

Chapter 15 of the Arbitration Procedure Code of the Russian Federation regulates conciliation procedures that can be carried out in the resolution of disputes within the framework of arbitration proceedings.

As specified in Part 1 of Article 138, the Arbitration Court takes measures to reconcile the parties and assists them in settling the dispute, guided by the interests of the parties and the objectives of judicial proceedings in arbitration courts.

Reconciliation of the parties is possible at any stage of the arbitration process and during the execution of a judicial act unless otherwise provided by the named Code and other federal laws (Part 4 of the same article).

According to Part 1 of Article 138.1, a conciliation procedure can be conducted at the request of the parties (party) or at the proposal of the arbitration court.

Article 138.2 establishes the types of conciliation procedures, which include:

• Negotiations,
• Mediation,
• Judicial conciliation,
• Other conciliation procedures not contradicting federal law.

As specified in Article 138.4, the parties have the right to settle the dispute using the mediation procedure as established by the named Code and federal law.

The procedure for conducting mediation

The procedure for conducting mediation is indicated in Article 11 of the Federal Law dated July 27, 2010, No. 193-FZ (as amended on July 26, 2019) "On the Alternative Dispute Resolution Procedure with the Participation of an Intermediary (Mediation Procedure)", with the most important provisions specified in Parts 1, 6, and 7 of the mentioned article:

• The procedure for conducting mediation is established by an agreement on the mediation procedure.
• Throughout the mediation procedure, the mediator can meet and communicate with all parties together or with each of them separately.
• During the mediation procedure, the mediator must not place any party in a preferential position or diminish the rights and legitimate interests of any party.

Thus, the parties conclude an agreement on the mediation procedure, which specifies the period during which they agree not to return to court to resolve the dispute. The duration of the mediation procedure should not exceed 180 days, except for the duration of the mediation procedure after the dispute is referred to a court or arbitration court, which should not exceed 60 days.

If the dispute is referred to a court or arbitration court, the parties can apply the mediation procedure at any time before the court or arbitration court renders a decision on the dispute (Part 2 of Article 4 of FZ No. 193).

Privacy policy

Article 5 of FZ No. 193 establishes rules for maintaining the confidentiality of information related to the mediation procedure.

According to Part 2 of the mentioned article, the mediator must not disclose information related to the mediation procedure and which became known to them during its conduct without the consent of the parties.

In addition, part 3 of this article states that the parties, organizations carrying out activities to ensure the conduct of the mediation procedure, the mediator, as well as other persons present during the mediation procedure, regardless of whether the trial or arbitration proceedings are related to the dispute, which was the subject of the mediation procedure, does not have the right to refer, unless the parties agree otherwise, during court proceedings or arbitration proceedings to information about:

1. a proposal from one of the parties to apply the mediation procedure, as well as the readiness of one of the parties to participate in this procedure;
2. opinions or proposals expressed by one of the parties regarding the possibility of resolving the dispute;
3. confessions made by one of the parties during the mediation procedure;
4. the readiness of one of the parties to accept the proposal of the mediator or the other party to resolve the dispute.

Demands from the mediator and from the organization carrying out activities to ensure the conduct of the mediation procedure for information related to the mediation procedure are not allowed, except in cases provided for by federal laws, and unless the parties agree otherwise (Part 4 of the same article).

If the mediator has received information from one of the parties related to the mediation procedure, he may disclose such information to the other party only with the consent of the party providing the information (Article 6 of the same law).

The mediator's figure

The procedure itself is carried out by professional mediators.

As stated in paragraph 3 of Article 2 of Federal Law No. 193, a mediator, mediators are an independent individual, independent individuals engaged by the parties as intermediaries in resolving a dispute to assist the parties in developing a solution on the merits of the dispute.

According to Part 1 of Article 9 of Federal Law No. 193, to conduct the mediation procedure, the parties, by mutual agreement, select one or more mediators.

A mediator selected or appointed in accordance with this article, in the event of the presence or occurrence of circumstances during the mediation procedure that may affect his independence and impartiality, is immediately obliged to notify the parties about this or in the case of a mediation procedure carried out by an organization engaged in ensuring conducting the mediation procedure, also to the specified organization. (Part 3 of the same article).

As for the cost of mediator services, such activities can be carried out both on a free or paid basis, and the activities of the relevant organizations can be carried out on a paid basis.

If the activity is paid, it is paid by the parties in equal shares, unless they agree otherwise.

Mediation agreement

Based on the results of the mediation procedure, the parties enter into a mediation agreement.

A mediation agreement reached by the parties as a result of a mediation procedure carried out after submitting a dispute to a court or arbitration tribunal may be approved by the court or arbitration tribunal as a settlement agreement in accordance with procedural legislation or legislation on arbitration courts, legislation on international commercial arbitration.

A mediation agreement on a dispute arising from civil legal relations, reached by the parties as a result of a mediation procedure carried out without referring the dispute to a court or arbitration tribunal, is a civil law transaction aimed at establishing, changing or terminating the rights and obligations of the parties. Such a transaction may be subject to the rules of civil law on compensation, novation, forgiveness of debt, set-off of a counterclaim of the same kind, and compensation for damage. Protection of rights violated as a result of non-fulfillment or improper execution of such a mediation agreement is carried out by methods provided for by civil law.

In addition, a mediation agreement reached by the parties as a result of a mediation procedure carried out without submitting the dispute to a court or arbitration tribunal, if notarized, has the force of an executive document.

As stated in Article 14 of Federal Law No. 193, the mediation procedure is terminated due to the following circumstances:

1. conclusion of a mediation agreement by the parties - from the date of signing such an agreement;
2. conclusion of an agreement between the parties to terminate the mediation procedure without reaching agreement on existing disagreements - from the date of signing such an agreement;
3. a written statement by the mediator, sent to the parties after consultations with them regarding the termination of the mediation procedure due to the inexpediency of its further conduct, - on the day of sending this statement;
4. a written statement from one, several or all parties, sent to the mediator, to refuse to continue the mediation procedure - from the date the mediator receives this statement;
5. expiration of the period for conducting the mediation procedure - from the date of its expiration, taking into account the provisions of Article 13 of the specified Federal Law.

Based on the above, we can note the main theses characteristic of the mediation procedure:

• It is possible (and most often carried out) before the start of the proceedings in court;
• When conducting mediation, the parties enter into an agreement on the conduct of the mediation procedure, in which they indicate the subject of the dispute; mediator; procedure for mediation; distribution of costs associated with the mediation procedure; timing of mediation;
• Information related to the mediation procedure is confidential. The mediator may not disclose such information, and the parties may not rely on it in court proceedings. As a general rule, such information cannot be requested from the mediator. The mediator cannot disclose to the party information he received from the other party;
• Payment for the mediator’s services, if they were paid, is carried out by the parties in equal shares;
• Based on the results of the mediation procedure, the parties enter into a mediation agreement. If it is concluded during the consideration of a dispute in court, it may be approved by the court as a settlement agreement. If it is concluded as part of the pre-trial settlement of a dispute, such a mediation agreement is a civil law transaction aimed at establishing, changing or terminating the rights and obligations of the parties - if such an agreement is notarized, it has the force of an executive document.