Comment

Senior Counsel from a Leading Global Energy Company

I have read through Professor's Wälde's piece on mediation and think it will be received as helpful, practical advice in the oil and gas sector.  The last I heard speak of ADR in the oil and gas context was at the Petroleum Institute in London a few of years ago, and it was pretty basic (counting arbitration as a form of ADR). 

Our company have been big promoters of ADR as a way of increasing company productivity by reducing cycle time and costs of disputes.  In fact, there is a Business School case study on how we have made it part of our Early Dispute Resolution program.  As for specific mediation experience, I have participated in maybe a dozen over the past four years, and there is nothing spectular to say except that all but one produced a settlement, the other being the one mentioned, and you have identified what I believe to be the main impediment to settlement. 

There is little story, in my view, in saying that we have tried mediation and it works.  In my view, the man-bites-dog story is that mediation is so rarely accepted when we propose it outside of the enlightened jurisdictions of North America and the UK.  I have noticed recently that this attitude is changing, with more willingness to explore mediation not as an alternative to court litigation (which is document-driven and not terribly time-consuming or costly on the continent) but to institutional arbitration: Professor Wälde's article makes this point.

Here are some quick comments to your article:

• on arbitration:  your estimate of one year for international arbitrations is in my view very optimistic, particularly when three arbitrators have been appointed.  The ICC claims that their average is 18 months, but this statistic usually gets a good laugh when shared with litigation lawyers in companies.  Maybe the ICC has the same system for tracking their arbitrations that the airlines use to come up with claims that '95 per cent' of their flights arrive on schedule (I am somehow always booked in the 5 per cent ...)
• on accountability of arbitrators for their results:  there is a point worth making that mediators aim to provide results that satisfy the people who are paying them.  Arbitrators, on the other hand, seem to be accountable only to themselves or the lawyers who appear before them -- and you see this, for example, in the endless granting of requests for extensions of time without requiring even minimal justification.
• on mediation procedure:  all of the mediations we have done have been of the facilitative type, with the exception of a technical review we have retained recently to avoid a project dispute with a supplier.  Personally, in this resource-stretched environment in which we all live, I would rather gouge my eyes out than agree to prepare a case in order to submit it to a third-party judge who will render a non-binding decision.  In my view (and experience), mediation procedure is best left as flexible as possible, to be suited to each dispute, and kept confidential if no settlement is reached.
• on mediator remuneration:  I have problems with the success-fee concept, and think it will conflict with the dynamics of the negotiation, particularly if it is based on an amount claimed by one or more parties. 
• on mediator qualifications:  here, I disagree that lawyers are always so bad.  I have had good experiences with lawyers who, as you point out, have received the proper training.  I have also had a disaster with a professor of law who had not been trained and just wanted to tell the parties who was right  (he told the other side they were wrong, and this did not help us reach settlement).  I think the most important qualification, however, is that both sides trust the person enough to confide their genuine interests.