Civil Engineer, DB Adjudicator, Mediator, Arbitrator


Assisting the Parties in Achieving Amicable Settlement

In its Preamble, ICC ADR Rules stipulate as follows:

“Amicable settlement is a desirable solution for business dispute and differences. It can occur before or during the litigation or arbitration of a dispute and can often be facilitated though the aid of a third party (the “Neutral”) acting in accordance with simple rules. The parties can agree to submit to such rules in their underlying contract or at any other time.”

FIDIC Red Book 1999 provides for an amicable settlement period of 56 days after giving a notice of dissatisfaction with the DB’s Decision and before commencement of arbitration. This is a good opportunity for the parties to try Mediation to achieve an amicable settlement.

Dr. Toshihiko Omoto proposes to the parties the following format for the Mediation:

  1. No lawyer is allowed to attend the Mediation process except in-house councils.
  2. Each party should have someone who has authority to decide or such person should be easily contacted by the negotiating team.
  3. After exchange of all necessary documents, hearing (facilitation) and negotiation will be conducted in a hotel for, say, a week where the mediator and all members of the parties stay.
  4. First thing for the parties have to do is to prepare a Scott Schedule1 in a cooperative manner. This process will help the parties to make the difference clear and eliminate some issues.
  5. Facilitation, negotiation and homework (internal discussion within a party) take turns and the gaps between the parties are narrowed until an amicable settlement is achieved or the parties conclude mediation failed and decide to commence arbitration or litigation.

The above format is very effective for the parties to reach an amicable settlement.

Here, Parties should understand that arbitration and litigation are like a gambling where no one predicts the result correctly. A dispute should be avoided in the first place by use of a Dispute Board and if the parties failed in avoiding disputes and failed in achieving settlement upon DB decision, parties should try Mediation before commencing arbitration or litigation.

1. This is a good explanation made by the High Court of Justice in Northern Ireland. back

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