Mediation in Malaysia: Ensuring Success
As is the case the world over, ADR is only as effective as the parties involved are willing to cooperate with it. This is especially true in Malaysia, which has its own steps to consider as part of mediation. Advocate and solicitor Nishantel Kaur gives an overview of these unique facets and offers her own thoughts on what makes a mediation truly effective.
What is the general process for mediation in Malaysia?
Parties may jointly appoint a mediator from the list of certified mediators empanelled with the Malaysian Mediation Centre (MMC), the Asian International Arbitration Centre (AIAC) or any other mediator agreed to by both parties. Firstly, it begins with an introduction by the mediator who explains the nature and process of mediation. In the first joint session, the mediator will identify the issues at hand and acknowledge the concerns, needs and interests of the respective parties.
After the first joint session, each party will have a private session with the mediator. During this session, each party can individually discuss the confidential and sensitive issues pertaining to the dispute with the mediator. The mediator will then invite both parties to attend the second joint session where alternative solutions will be discussed between parties, focusing on their needs and interests.
In the event that parties are able to resolve their dispute, parties would be advised to enter into a written settlement agreement or a consent order which would bind both parties. This is not subject to an appeal. If either party breaches any term in the settlement agreement or consent order, the aggrieved party may sue the defaulting party for its breach. However, if mediation is unsuccessful, parties have the option to resolve the dispute by way of litigation, or they may even choose arbitration.
There are various types of mediation in Malaysia. Could you please give an overview of these?
The Mediation Act 2012 was passed to promote and encourage mediation by providing for the process of mediation, thereby facilitating the parties in disputes to settle disputes in a fair, speedy and cost-effective manner. Parties are typically given an opportunity to appoint any person as their mediator, but if they are unable to come to an agreement, they may apply to the MMC or AIAC to appoint a qualified mediator.
If a matter is filed in court, under Practice Direction No. 4 of 2016, the Chief Justice of Malaya has directed that all judges of the Sessions Court – as well as magistrates and their assistant registrars – at the pre-trial case management stage may direct the parties to facilitate the settlement of their dispute before the court by way of mediation as stipulated under Order 34 Rule 2 of the Rules of Court 2012. Mediation can be suggested at any stage of the court proceeding even after trial has commenced or even at the appeal stage.
If either party breaches any term in the settlement agreement or consent order, the aggrieved party may sue the defaulting party for its breach.
Under the Practice Direction, mediation can be conducted in three modes. These are judge-led mediation, AIAC and mediation conducted by other mediators agreeable by both parties. When the parties agree on mediation, each party is to complete the mediation agreement provided in Form 1 of this Practice Direction. All communications made during mediation are ‘without prejudice’, thus confidential unless expressly waived by the parties. The parties are also required to report the progress of the mediation or the outcome of the mediation to the court. If mediation fails, the court may give any other direction at its discretion.
In your experience, what is key to mediation success?
For mediation to be successful, all decision makers must be present during mediation and should enter the mediation process with the desire and ability to engage in negotiations that may lead to settlement. Furthermore, effective mediation requires listening to what is being communicated, as this will yield understanding, and from understanding we may come to an agreement. It is important to note that listening does not mean you must agree with your opponent, but simply that you must be patient and non-judgmental in taking in what the opponent is communicating.
In your experience, what factors typically cause mediation to fail? How can these factors be avoided or otherwise mitigated?
Parties should enter the mediation process with the idea that the case can be settled. If their attitudes are negative and expectations low, mediation does not have much of a chance to succeed. Hence, we need to ensure that before mediation begins, parties should evaluate their emotions and remain calm throughout the mediation process.
Poor preparation prior to mediating or failure of the decision-makers to attend mediation will cause mediation to fail. It would be advisable for parties to ensure that prior to mediating, thorough preparation is done and that decision-makers should be compelled to attend the mediation process. If they are unable to attend, parties should reschedule the mediation.
Another factor that may cause mediation to fail is when the mediation process is abused – when parties attend but refuse to cooperate, or when parties fish for information while only intending to litigate. Prior to mediation, solicitors and mediators should communicate with the parties and advise them to act bona fide. However, if parties refuse to cooperate or have the intention to act mala fide, then mediation should not be encouraged.
There may also be instances where parties would be discouraged to mediate because their lawyers generally tend towards overconfidence in their case. Some parties prefer to tell their story to a Judge because they have a romanticised view of court, believing they will win a huge settlement. Parties should be advised on the reality of litigating their matter in court, including the pros and cons. Solicitors should ensure that the best interest of the parties are taken care of and not conduct a case for their own benefit.
What are your top tips for preparing a client for mediation?
- Clients should be open-minded, non-judgemental and ready to present their case and to listen to the opposing party’s case;
- The client should understand that they need not win at the expense of the other side, since mediation is a collaborative effort by parties in reaching a settlement;
- A mediation process is voluntary and parties are able to control the outcome, as opposed to litigation;
- Mediators are not judges but are merely there to assist parties to find a common ground to settle their case;
- Even though mediation can be a long and frustrating process, mediation would be the best way for parties to resolve their case whilst saving costs in litigating; and
- The client should be persuasive about the substance of their dispute and attempt to build a deal.
What is your advice for anyone looking to pursue a career in mediation?
Mediation has numerous areas of specialisation and there is no one right way to mediate. Learn from every theory of mediation. If you have an interest in alternative dispute resolution and a passion for negotiating conflicts, you might find working as a mediator rewarding. Skilled mediators are masters of communication. They know how to ‘read’ people, defuse tension, manage their own emotions and facilitate open discussions.
Nishantel Kaur Balvinder Singh, Senior Legal Assistant
1st Floor, No. 2 Beach Street, 10300 Penang, Malaysia
Tel: +44 60174 142635
Nishantel Kaur has been a legal assistant of Presgrave & Matthews since 3 August 2009, specialising in civil litigation. She was admitted as an advocate and solicitor of the High Court of Malaya on 31 July 2009 and possesses a Bachelor of Laws degree from the University of Northumbria in Newcastle upon Tyne. She has also completed a postgraduate course known as the Certificate of Legal Practice from the Legal Profession Qualifying Board, Malaysia.
In 2019, Nishantel completed the Professional Diploma in International Arbitration programme and was accredited as an Affiliate Member by The Malaysian Institute of Arbitrators (MIArb). In 2022, she was accredited as an Associate by the Chartered Institute of Arbitrators (CIArb).
As of August 2022, she also holds a Master of Laws (Applied Law), majoring in ASEAN+6 Legal Practice and Malaysian Legal Practice from The College of Law, Sydney, Australia.
Presgrave & Matthews was established in Malaysia in 1898 and stands today as one of the oldest legal firms in the Straits Settlements. In addition to its historic legal library, the firm boasts 25 fully qualified advocates and solicitors qualified to practice law in West Malaysia.