UIA World forum of mediation centres Prague, 7–8 June 2013

Michel Nardin - PMG 1

UIA WORLD FORUM OF MEDIATION CENTRESPRAGUE, 7–8 JUNE 2013

Dispute PreventionInformal Assistance - Principles and case studies

Michel Nardin Dipl. Ing. ETHZ MSc MBAPMG Consulting Engineers & Economists


Overview - Dispute Prevention and Informal Assistance / Principles and case studies

1. Main methods related to dispute prevention and informal assistance

2. Mediation: principles, procedure, main steps / “PMG Model”

3. Case studies4. Conclusions


1. Main methods related to dispute prevention and informal assistance

1.1 Preventive methods Partnering Claims Appeals Committee Dispute review Board (DRB)

1.2 Resolutive methods Early Neutral evaluation Expert Determination Mini-Trial Conciliation, facilitation Mediation


1.1 Preventive methods

1. Partnering• Periodical meetings during the implementation of the

contract• Maintaining an on-going dialogue

2. Claims Appeals Committee• Committee composed of a senior executive of each

party• Distant look on the issues

3. Dispute Review Board (DRB)• A board which settles claims or differences of opinion• The DRB makes recommendations or issues opinions


1.2 Resolutive Methods

1. Early Neutral Evaluation• The expert is jointly appointed by the parties• Evaluation of crucial issues of fact or law / report not

binding

2. Expert Determination • “Schiedsgutachten” / “Expertise-Arbitrage”• The expert’s mission is to arrive at a binding

determination of a material fact

3. Mini-Trial• The parties present their dispute before a Mini-Trial Panel

(composed by executive from each party and a neutral )


1.2 Resolutive Methods

4. Conciliation, Facilitation• The aim is to bridge the gap between the parties• Handling of effective communication is a key task• The conciliator does not make known his own views

5. Mediation• The role of the mediator is a more active one• Mediation proceedings before a mediator or a mediation

panel• The procedure is conducted by the mediator• Caucus sessions / Confidentiality• Constructive proposal for an agreement



1. Preliminary phase I• Agreement between the Parties on the principle to engage in

mediation• Appointment of the mediator (s)

2. Preliminary phase II• Preliminary meeting, definition, procedure, methodology,

programme, signature of the agreement• Submission of basic documents and contract (synthesis)• Information, cause of the dispute, amounts in discussion

3. Hearing stage Separate meeting with each party

• Presentation of the case by each Party (caucus sessions)• Questions from the mediator, open discussion



4. Preparation stage• Analysis of the submitted files and documents• Setting up of a preliminary opinion (provisional report) /

constructive proposal for an agreement• Coordination between the mediators

5. Negotiation phase I Separate meeting with each party:• Critical review / analysis of technical, financial, contractual issues

and arguments by the mediator / Discussion with the party• Confidential oral proposal by the party for a transactional

agreement

Assessment: possible agreement ?or is there still a gap between the parties?



6. Negotiation phase II Separate meeting with each party:• Review with the party of the financial costs related to litigation or

arbitration• Evaluation of all resulting impacts and damages• Mediator’s request for a new agreement proposal by the party

New assessment: possible agreement?If not, then:

7. Closing stage

• Drafting of a mediation report where the mediators present their own final assessment

• This report may be used by the parties in view of negotiating a future agreement(?)


3. Case studiesa) “Ténérez” bridge / France

• Design and built contract• Dispute between the owner (public authority) and the

contractor (private company)• Cause: construction costs/ design issues and responsibilities /

delays• Amount in dispute corresponds to ca. 50% of the contract

amount!• Legal proceedings already initiated / then suspension

• Counsels and Chair of Tribunal in favour of mediation (duration and cost of the legal proceedings)

• Appointment of 2 mediators / “expertise-conciliation”• Key-success factor: the Chair of the Tribunal supports the

mediation process• Final agreement has been signed after 9 months


3. Case studies:b) Industrial plant, food industry / Europe

• Industrial contract / supply of production equipment• Dispute between two private companies• Cause: defective equipment / construction v. operation • Contract includes an arbitration clause • Unsuccessful negotiation between the parties for more than 1

year• Amount in dispute: € 3 mio

• The proposed sole-arbitrator made a recommendation for a mediation

• Appointment of 1 mediator• Key-success factor: the managers of each party accepted their

share of responsibility• Final agreement has been reached after 1 month


3. Case studiesc) Industrial plant, aluminium production/ North America

• Litigation between the owner (American) and the supplier (European)

• Cause: after 15 years of operation the transformers broke down (according to technical specifications, the life expectation is of 25 years)

• Amount in dispute > US $ 100 mio• Legal proceedings already initiated

• Counsels and parties in favour of mediation (cost and duration of arbitration)

• Mediation has been conducted in a third country (+ meetings on site)

• Key-success factors: action of the mediator to convince each party Appointment of a “chief negotiator” by each party

• Final agreement has been reached and signed within 1 week


3. Case studiesd) Building / Europe

• Built-only construction contract• Dispute between private owner and private contractor• Cause: construction costs / design issues and responsibilities /

delays• Amount in dispute: € 1.5 mio• Both parties agree on a mediation in view of preserving their

future commercial relationship

• Appointment of 1 mediator• No agreement after the negotiation phase I !!• Mediator’s proposal to draft a non-binding report including the

mediator’s recommendations and their justification• On the basis of the report and of the evaluation of the future

litigation costs, both parties decided to re-open the negotiation (phase II)

• … and finally signed an agreement


4. Conclusions

• Willingness of both parties to enter into a mediation is a key-success factor

• Personality and skills of chief-negotiators designated by each party

• Professional experience and skills of the mediator (s)• Mediator’s ability to understand and appreciate the major

challenges of both parties• Mediator’s ability to understand the technical, contractual,

financial and political issues• Parties’ and mediator’s ability to practice “active hearing”• Development of confidence and relationships between the

parties and the mediator (s)


Thank you!

Michel NardinDipl. Eng. ETHZ – MSc - MBA

PMG Consulting Engineers & Economists

Rue du Centre 72

CH-1025 Saint-Sulpice / Switzerland

[email protected]

www.pmg-ing.ch

UIA World forum of mediation centres Prague, 7–8 June 2013

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