Dealing Differently with disputes

Published on February 18, 2019

By launching Mediation 4 Aviation (M4A) business aviation lawyers and accredited mediators Giulia Mauri and Frederique Jos wish to offer an Alternative Dispute Resolution (ADR) mechanism tailor-made to fit the business aviation industry.

By Sylvie Peron – Altitudes Europe

 

The business aviation industry is international and cross-border by nature and yet it is a tight knit community where stakeholders are most of the time engaged in long-term commercial relationships.

Like in any other industry it is not uncommon for disputes to arise but given the close proximity among the players and the high-value assets involved there is a strong need for a dispute resolution mechanism that could prevent the disagreement from becoming so adversarial that the parties can no longer work together. As such, the traditional routes to resolving quarrels through litigation may not necessarily be the most advantageous.

You refer to mediation as one of the ADR mechanisms. What is ADR?

Alternative dispute resolutions (ADR) are procedures for settling disputes outside the courtroom (such as arbitration, mediation, or collaborative negotiation). Today, the two main systems considered as the most relevant alternative dispute resolution (ADR) mechanisms are mediation and arbitration. They are increasingly being utilised in disputes as an alternative to court litigation.

So what is the difference between mediation and arbitration?

Arbitration and mediation are often referred to together when people talk about ADR systems since they are both alternatives to traditional court litigation and employ a neutral third party to oversee the process.

Arbitration is similar to a court process: the parties are given an opportunity to present their case to a third party called the arbitrator. Appointed by the parties, the arbitrator hears both parties’ arguments and then issues a final ‘judgment’ (the arbitral decision). During arbitration, there is usually little if any out-of-court negotiation between parties. The arbitrator has the power to render a legally binding decision, which could then be enforced in case of non-compliance by one of the parties.

In the mediation procedure, the role of this third-party, called the mediator, is to listen to the parties’ arguments and points of view and to actively facilitate (or try to reinstall) negotiations between the disputing parties in order to help them find a settlement of their own. The mediator is a facilitator and an enabler, who by using conflict resolution techniques helps the parties in finding their own solution to the conflict opposing them. The mediator does not issue orders, but helps parties to reach a settlement by assisting them in their communications and in the elaboration of possible solutions.

Where does mediation come from?

In family, community, environmental, international diplomacy and workplace contexts, mediation has a range of different and long-standing cultural origins. Commercial mediation was developed first in the USA, as part of a drive to find alternatives to the drawbacks (delay and expenses) of litigation.

Probably the most relevant turning point in establishing an alternative to positional bargaining and positional negotiation (which is how parties behave in litigation and arbitration) was the publication in 1981 of ‘Getting to Yes’ by Roger Fisher and William Ury. They introduced the concept of interests-based negotiation, which is the building block of mediation.

The application of the negotiation techniques developed by Fisher and Ury in the context of dispute resolutions has proven extremely successful and has contributed to the development and expansion of mediation.

For many years now, the legislators in different countries have recognised the advantages of mediation and have introduced legal measures to facilitate the use of mediation and its recognition.

Is mediation a recognised ADR mechanism within Europe, like in the US?

In 2008, the European Union adopted an EU Mediation Directive (Directive 2008/52/EC).

The legal framework introduced by this Directive has contributed in the professionalisation of mediation services. Various organisations in different Member States of the European Union now offer high level training aimed at teaching future mediators conflict resolution techniques as well as mediation methodology.

By doing so, the European Union has acknowledged the importance that mediation may have in disputes resolution. Each Member State is encouraged to train mediators, thus ensuring a high quality of mediation. It gives every judge the right to invite the parties to a dispute to try mediation first if she/he considers it appropriate given the circumstances of the case.

All Member States of the European Union have transposed the Directive into their national laws.

Could mediation be a suitable option to solve business aviation related disputes?

Mediation proves to be particularly successful in sectors of the industry where parties value a high degree of confidentiality. In mediation confidentiality is of the essence: this means any comments, evidence or admissions made or given during a given mediation procedure cannot be used in any subsequent litigation or arbitration. Moreover, unless the parties agree otherwise, the final settlement agreement is fully confidential.

Additionally, mediation may take from a few days or weeks to up to a maximum of six months. In certain cases, it may even last just a few hours, allowing for a more reasonable timetable for solving disputes. It is also usually far less costly than a court or arbitration proceeding. Mediation is therefore quite attractive to the business aviation industry where small and medium size companies operate. SMEs do not have the same funds and resources of large corporations to be able to launch long and costly litigation procedures.

Mediation being a non-adversarial procedure, its collaborative nature is of great importance in a niche sector such as business aviation where it can to help preserve continued relationships between business partners.

Also, given the international nature of aviation, most disputes between aviation stakeholders will involve cross-border litigation, which is particularly complex to handle as it involves different legal systems and often the use of different languages and procedural rules. Because mediation is not driven by legal considerations, but by commercial ones, parties may come to very creative solutions that fit their businesses and their business relations, which are rarely available in national laws, without having to go through complex litigation in different states.

Finally parties usually report a higher degree of satisfaction with mediation than with arbitration or other court proceedings because in a mediation they can control the final result and they are the creators of the final solution. The main consequence of this satisfaction is a greater compliance with the final settlement they reach than with a court or arbitral decisions imposed on the parties.

Why did you launch Mediation 4 Aviation?

In our practice, we have identified a strong need of aviation stakeholders to use mediation. We have also found that there is a lack of experts ( judges or arbitrators or mediators) with a thorough technical and commercial understanding of the aviation industry, who are thus truly qualified to examine issues leading to dispute in this sector.

Mediation 4 Aviation, offers mediation services for all kind of disputes related to business aviation matters such as:

  • The termination of a commercial agreement and its consequences (catering, service levels agreements, contracts with suppliers, etc.)
  • Maintenance agreements
  • Aircraft sale and purchase agreements
  • Agreements with airports
  • Airport charges
  • Leasing and wet-leasing
  • Charter agreements
  • Fuel supply
  • Brokerage agreements
  • Infringement of copyrights or branding
  • Aviation related claim
  • Investments and conflicts between business partners and/or separation of business partner
  • Code share agreements

How would mediation be processed?

First of all, the disputing parties can decide to go to mediation at any time before, during or even after litigation.

Once one or both parties file a mediation request, a mediator is selected and appointed by mutual agreement. Before the mediation can begin, a mediation agreement fixing the fees, venue and principles governing the mediation (such as confidentiality, etc.) will be concluded.

The appointed mediator will generally start the procedure by meeting the parties and asking them to explain their respective point of view in relation to the dispute opposing them. Then the mediator can prefer to lead the whole mediation via a joint meeting or may opt to meet each party separately in successive private meetings so that the parties may freely explain their views in relation to the dispute.

The mediator discusses their claims with the parties, exploring with each party possible ways to resolve it. Throughout the mediation process the mediator acts as a coach to the parties and their advisers enabling them to participate as fully and effectively as possible while preserving neutrality and confidentiality.

Throughout the mediation process the main focus remains on the differing parties as they work towards a mutually beneficial solution and they formalise the solution found by concluding a settlement agreement.

In mediation both parties are ‘pilots in command’ of their dispute: at the beginning of the mediation they take off from their point of departure (their claims) but the place of destination (where they will land the settlement agreement) will depend on the guidance they will receive during their journey from the mediator.

As there is no limit to the creativity of the parties, or the scope of the dispute, each mediation is unique. And so will be the final solution found with the expert help of the mediator.