GPC Mediation

GPC MEDIATION GUIDELINES / effective July 1st 2012

Mediation and Arbitration Agreement

The object of Mediation is to provide a flexible approach to resolving disputes in which the parties have ultimate control of the decision to settle and the agreed terms of the resolution with an independent, neutral third-party, “the Mediator”, assisting the parties in working towards a negotiated agreement

The written agreement to submit present or future disputes to meditation.

When parties enter into a contract incorporating a reference to the terms and conditions of one of GAFTA’s 80 standard contract forms, they have agreed that their disputes will be heard and determined by arbitrators in accordance with the GAFTA Arbitration Rules No. 125.  The Arbitration Clause in GAFTA Standard contracts is the parties’ written arbitration agreement.

Parties may agree, either at the time of agreeing the trade or at anytime thereafter, to defer the arbitration and to mediate any dispute that may arise. Any agreement to mediation should be in writing, and should be referred to specifically in communications sent between the parties, as foreseen in GAFTA Mediation Rules No.128

Place of Mediation

Mediation takes place with face to face meetings between the parties and the Mediator.  In the interests of restricting costs, it is CICILS recommendation that the parties amend the GAFTA Mediation Rules No. 128 by agreeing that the Mediation will take place at the location of the Mediator (thus avoiding travel and accommodation costs for the Mediator which would otherwise have to be charged back to the parties and significantly increase the cost of the Mediation).  To do this, both parties must expressly agree in writing to meet at the Mediator’s location at the time the Mediator is appointed.

Mediations are designed to enable parties to resolve their disputes and to agree procedures most likely to assist the resolution of any issues in a most cost effective manner.  Experience indicates this is best achieved with face to face meetings, but parties may agree that disputes may be resolved using modern technology such as video technology if appropriate in the specific circumstances of the dispute.  The critical issue is to have the decision makers available to discuss the issues in dispute, in order to come to a resolution.

Claiming Mediation

Mediation, unlike arbitration, is a voluntary, non-binding process with which both parties must agree to proceed.  The claimant should notify the other party that they wish to proceed to mediation and gain the other party’s written consent to this procedure, thereby deferring the need to proceed with an arbitration claim.  Alternatively, to ensure the dispute does not become “time-barred” for Arbitration, the claimant should first claim Arbitration and then suggest Mediation is first tried to resolve the dispute, while the arbitration process is suspended.

Notices and Communications between the parties

GAFTA will provide the administration services for the Mediation process.  This will ensure the administration of the mediation process will be independent of trading and be seen to be completely neutral.

All notices / communications should be emailed initially to cicilsmediation@gafta.com for forwarding to the Mediator.

Appointment of Mediator

This is provided for under Rule 3 of the GAFTA Mediation Rules 128.  A number of CICILS Members have qualified and are recognized as Gafta qualified Mediators.  On application by both parties, GAFTA will appoint a sole Mediator from the CICILS Panel.

Disqualification and replacement of a Mediator

This is provided for under Rule 3:3  of the GAFTA Mediation Rules 128.  In the event that the Mediator resigns or is unable to act for any reason, GAFTA may appoint another Mediator at any time.

The Mediation

It is the duty of the Mediator to use his or her best efforts to achieve an agreed outcome to the mediation as expeditiously as the circumstances of the parties and the nature of the dispute will permit.

Role of the Mediator

The Mediator may conduct the mediation in such manner as the mediator considers appropriate, taking into account the circumstances of the case, the wishes of the parties, and the need for expedition.  Meetings are best held face to face, but exceptionally (if agreed by the parties and the Mediator), by telephone, by video conference or electronically.  The Mediator may communicate with the parties together or with either party separately. It is not the role of the Mediator to give advice to, or to represent or to favour, either party.  The parties may obtain advice concerning their situation, the mediation process and any contemplated agreement.

Role of the Parties

Throughout the mediation the parties and their representatives shall use their reasonable best efforts to co-operate with each other and the mediator to settle their difference and enable the mediation to proceed promptly.  Representative should have full decision-making authority with regards to the issues being discussed in the mediation.

Authority and Representation

Throughout the mediation, each party and their representatives must have authority to settle the dispute, or be represented by a person having authority to settle the dispute.  No settlement agreement reached during the mediation shall be legally binding unless and until it is reduced to writing and signed by the parties to that settled agreement (or by their authorised representatives).

Cost of the Mediation

The cost of a Mediation will depend on the time and costs of each individual dispute.  Based on the parties agreeing to travel to the location of the mediator and the Mediation meeting lasting for one day only, Mediations are expected to cost in the region of US$5,000 (but will be charged in GBP Pounds Sterling).  This is only an estimate. 
These costs shall be split 50:50 between both the parties, it is not recoverable and a deposit is payable to GAFTA immediately upon the appointment of the Mediator.  The Mediation will not take place until both parties have paid.  Each party will bear their own costs of travel and accommodation.  Occasionally, these costs may be dealt with in the settlement on an alternative basis.

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This guide has been prepared by the GPC Dispute Resolution Group to aid GPC members in reviewing the Gafta Mediation Rules.  It does not pretend to form a definitive handling of the subject.  Further reference should be made to GAFTA Mediation Rules No. 128, which GPC have decided to adopt and is attached (with the kind permission of the Grain and Feed Trade Association).  While every care has been taken in the preparation of these notes, which are believed to be accurate, neither GPC nor its Officers can accept any liability resulting from any error, mis-statement or omission therein.