In a webinar co-organized by the Singapore International Mediation Centre (SIMC) and Korean Commercial Arbitration Board (KCAB INTERNATIONAL) on June 3rd, distinguished panelists discussed the impact of Covid-19 on international disputes, as well as how it would redefine cross-border mediation in the future.
During the livestream which attracted over 130 participants, chairman of KCAB INTERNATIONAL Professor Hi-Taek Shin, partner at Kim and Chang’s Mr. Byung-Woo Im, SIMC Chairman Mr. George Lim, S.C. and SIMC CEO Mr. Chuan Wee Meng, highlighted the potential of a ‘tsunami of disputes’ due to Covid-19. To mitigate the impact on businesses, panelists suggested that mediation would be ideal for settling some of these disputes.
We thank all panelists and participants for the fruitful discussion. A special shout-out too, to Mr. Kap-You (Kevin) Kim, SIMC board member and senior partner at Peter & Kim, for moderating the session.
You can catch up on the recording below or through this link here.
The case for mediation
Professor. Shin beginned the session observing that in disputes caused by the Covid-19 pandemic, no party can be blamed for intentional non-performance, delay or negligence. As such, a mutually agreed settlement through mediation is a more appropriate method of dispute resolution compared to traditional litigation or arbitration where the winners and losers are starkly contrasted.
Mr. Im shared that large-scale businesses including the infrastructure and energy sectors could especially face more conflicts. In these instances, existing contractual clauses might not be sufficient to solve complex matters arising from the pandemic. Furthermore, accurately quantifying the damages due to this period can be challenging and costly.
He said, “Since most businesses are negatively affected, making reasonable compromises through mediation to preserve business relationships is all the more crucial.”
Mr. Lim explained that international mediation has already been growing rapidly all over the world including Asia. Post Covid-19, as businesses are financially stressed and look to better their positions, he predicts there will be an increase in demand for mediation: “The growth and increasing use of mediation is unstoppable… those who can offer a wide suite of services including mediation will have an edge.”
Mr Chuan shared SIMC’s new Covid-19 Protocol, an expedited, economical, and efficient means to help businesses resolve disputes during this period. Mediations can be conducted partially or fully online according to the preference of the parties involved, with full support by SIMC. As the Protocol was conceived as a service to the business community, the rates were kept affordable.
“Companies that settle cases promptly through mediation will be at an advantage as they resolve their legal disputes quickly coming out of the Covid-19 pandemic. Comparatively those who don’t may not be in the same position to recover quickly as they are caught in legal battles,” he said.
The sessions’s moderator Mr. Kim, concluded that we can expect mediation to be adopted in solving bigger disputes around the world. From his personal experience, he observed that several parties are increasingly incorporating mediation to settle their disputes. In the few cases where mediation is not successful, the method is still useful in helping parties have a clearer understanding of their objectives during arbitration.
The discussions attracted a flurry of questions from the audience. We reproduce some of the exchanges below:
“Why is enforcement important to mediation if it is a voluntary process?”
Mr. Lim: “When we try to persuade parties to mediate, often businesses question if the terms are enforceable. They often ask: if the other party does not comply, can I enforce it? If we say they can’t, they might say, then what is the point? Enforceability encourages parties to mediate and come to the table, as they know it can be enforced. Ensuring all parties comply and that their agreement is enforceable, gives the agreement teeth and provides parties with more trust in the mediation process.”
“In mediation is it possible for the mediator to just decide to hold the sessions online if one party is not willing to do so?”
Mr Chuan: “In mediation it is about party autonomy, so both parties must agree to mediate online. If they can’t agree to an online mediation, we need to know what their concerns are. Usually, these may be a fear of technology or doubts about security. This is where SIMC and KCAB INTERNATIONAL could come in to explain to them the measures put in place to ensure that the online process is just as effective and secure.”
“Will investors and states be more inclined to use mediation going forward especially since we can expect a big flood of investor claims?”
Mr Lim: “Yes. I think there is recognition now that if there is a chance to mediate early —which from my experience I can confirm—it can do a lot of good in salvaging the relationship between the state and investor. The problem we face now is that parties entangled in a dispute come to mediate late.”
“In 10 years’ time, where do we see mediation?”
Mr Kim: “Parties will choose to mediate, especially while tackling bigger disputes around the world. India, China, Korea, Japan will be ‘factories’ for steering mediation with the help of Singapore and the Singapore Convention on Mediation.”