How Mediation Rules are Changing Dispute Resolution in the Middle East?

From Adversarial to Collaborative: How Mediation Rules are Changing Dispute Resolution in the Middle East
Summary

Executive summary

There’s been a shift towards using mediation in the Middle East for resolving disputes. Various institutions are adopting and revising mediation rules. They are recognizing its effectiveness as an alternative to traditional dispute resolution.

In March 2024, Saudi Arabia hosted Riyadh International Disputes Week. This event brought together experts, practitioners, and stakeholders to discuss several issues. The rise of mediation was a notable topic.

What is Mediation?

Mediation is a type of alternative dispute resolution (ADR). It involves a neutral third party, called a mediator. The mediator helps disputing parties reach an agreement by guiding their discussions. Unlike litigation or arbitration, a judge or arbitrator imposes a decision. In mediation, the parties create their own solutions.

This process is often less formal. It is also less adversarial and cost-effective than traditional courts. It’s an attractive option for resolving a wide range of disputes in various contexts.

Middle East Context

Mediation has historically been less common in the Middle East. Reasons range from cultural and legal norms to how people see mediation as less authoritative than court rulings. However, events like the Riyadh International Disputes Week signal a shift in this perception. There is a growing recognition of its effectiveness in resolving disputes amicably. This is further supported by institutions revising and adopting new frameworks to make them more accessible and attractive.

These developments collectively demonstrate a cultural and procedural shift towards collaboration and compromise over adversarial litigation.

The Shift Towards Mediation in the Middle East

From Traditional reliance on litigation and arbitration to a More Collaborative Approach

Traditionally, parties have been uncomfortable with discussing their disputes openly and fear that any concessions made during mediation could be used against them in formal litigation.

In fact, for years, litigation and arbitration have been the primary methods for resolving conflicts in the Middle East. These approaches were often preferred because they offered a formal and structured process. A process that aligned with the region’s legal norms and cultural expectations of authority and resolution. Litigation, being a court-based process, and arbitration, offering a binding decision from a third party, both provided a sense of finality and seriousness that parties often sought in dispute resolution.

This is alongside the cultural barriers, such as a preference for preserving relationships and avoiding public exposure of personal or business matters, that have historically impeded the adoption of mediation in the Middle East.

A new light

In recent years, the growing exposure to global best practices and successful mediation implementations worldwide are changing perceptions in the Middle East. Establishing mediation-friendly legal frameworks and institutional support is key. The Singaporean Convention on Mediation, signed by countries such as Qatar, Saudi Arabia, and UAE, is a step in this direction.

The Impact of the Singapore Convention

The Singapore Convention on Mediation (aka the United Nations Convention on International Settlement Agreements Resulting from Mediation) was adopted by the United Nations General Assembly in 2018 and entered into force in 2020.

It is a treaty that aims to promote and ease the use of mediation in solving global business disputes.

This convention has been seen as a game-changer for mediation worldwide, including in the Middle East.

Its impact is threefold:

  1. it promotes certainty and enforceability of mediated settlements,
  2. encourages parties to consider mediation as an option for dispute resolution,
  3. and provides a global legal framework for recognizing and enforcing mediated settlements.

Qatar and Saudi Arabia were among the first countries in the Middle East to sign and ratify the Singapore Convention. Other countries in the region, such as Jordan, Iran, and Afghanistan have also signed the convention but are yet to ratify it through the implementation of local laws. As more and more nations in the Middle East become signatories to the Singapore Convention, we can expect to see an increase in efforts towards developing mediation frameworks in these regions.

New Mediation Laws in the Middle East

Qatar Mediation Law (2021)

Qatar enacted a Mediation Law, Qatar Law No. 20/2021. This law focuses on resolving civil and commercial disputes through mediation. It applies to mediations conducted within the country (Qatar), provided both parties agree, but excludes urgent lawsuits, Qatar energy disputes, tax assessments, and cases governed by other dispute resolution methods. The law mandates written mediation agreements, though signatures are not required, and confidentiality is strictly enforced with penalties for breaches. Mediators are protected from liability unless they act in bad faith, collude, or exhibit gross negligence.

Learn more here.

UAE Mediation Law (2021)

The recent Federal Decree-Law No. 40 of 2023 consolidates and streamlines the mediation and conciliation frameworks in the UAE. This law repeals previous federal laws related to mediation and conciliation. It came into effect on 29 December 2023.

Under this new law, the Federal Judiciary or the local judicial authority establishes mediation and conciliation centers within their respective jurisdictions, including the online platform Wasata.

These centers will operate parallel to the court-annexed system, where conciliation is mandatory for certain disputes, while mediation is voluntary with the parties’ consent. The mediator’s role in mediation is to facilitate agreement, while in conciliation, they suggest solutions.

The law also outlines the process for contractual mediation and the requirements for a valid mediation agreement. It upholds principles such as without-prejudice communications, suspension of limitation periods during mediation, and the possibility of seeking interim measures.

Read more here, and here.

Saudi Arabia’s Draft Mediation Law (2023)

In 2023, a draft of Saudi Arabia’s first mediation law was published. It aligns with the Singapore Convention and promotes mediation as a dispute resolution method. The draft law received positive feedback since it provides a framework and requirements for parties to participate in mediation. Confidentiality is emphasized as it enhances candor and efficiency in resolving disputes.

Read more here.

How Parties Can Benefit from Using These Mediation Rules?

Parties involved in a dispute can benefit greatly from using mediation rules.

  • Cost and time savings compared to litigation: Much quicker and less expensive process compared to traditional legal proceedings.
  • Control over the outcome: In mediation, parties have control over the final outcome of their dispute. They are not bound by any decisions made by a judge or arbitrator.
  • Maintaining relationships: In the Middle East, where personal and business relationships hold great importance, mediation allows for a more amicable resolution that does not strain these connections.
  • Creative solutions: Mediation encourages parties to think outside the box and come up with creative solutions that cater to their specific needs and interests, rather than relying on rigid legal remedies.

Lack of familiarity with mediation process: The role of Institutional support

Many individuals and businesses are more accustomed to the adversarial nature of litigation. Therefore, they may be unfamiliar with mediation’s collaborative approach. This unfamiliarity can lead to reluctance or skepticism about its effectiveness, in one way or another.

This is where institutional support plays a role in establishing grounding frameworks that help businesses understand and enable mediation.

  1. Virtual mediation in Abu Dhabi has made the process more accessible by allowing parties to participate from remote locations. They even Launched mediation in the Metaverse.
  2. The DIAC Mediation Rules (Dubai International Arbitration Centre) provide comprehensive guidelines that ensure the mediation process is transparent, efficient, and fair.
  3. OAC’s 2021 Mediation Rules (Oman Arbitration Centre) offer a structured approach to mediation that emphasizes confidentiality and the voluntary nature of the process.
  4. The QICDRC Mediation Service (Qatar International Court and Dispute Resolution Centre) supports mediation by offering services that cater specifically to commercial disputes.
  5. Mediation services in Saudi Arabia, particularly through the Saudi Center for Commercial Arbitration (SCCA), are gaining traction by providing businesses with a reliable alternative to resolve disputes efficiently.

Encouraging widespread awareness and education on the benefits and processes of mediation can help shift perceptions. Workshops, seminars, and training sessions on mediation practices can equip both legal professionals and laypersons with the necessary skills and understanding to effectively engage in the process.

Onshore courts’ treatment of “without prejudice” communications

“Without prejudice” communications in mediation allow parties to negotiate openly and honestly without the fear of their words being used against them. Onshore courts recognize this privilege, as it encourages settlement discussions and preserves confidentiality. Upholding this principle ensures parties can negotiate in good faith and promotes the goals of mediation: achieving confidential and secure resolutions.

The Future of Mediation in the Middle East

In conclusion, the progress of mediation in the Middle East is marked by a growing shift towards collaborative dispute resolution. We can anticipate:

  • Continued growth and institutionalization of mediation: This contributes to a more structured and reliable dispute resolution framework.
  • Potential for mandatory mediation in certain disputes: New legislation may require mediation for specific conflicts. To promote a culture of negotiation and settlement.
  • Increased collaboration between courts and mediation centers: which encourages more Businesses to incorporate mediation clauses in their contracts
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