Dispute “WISE” Resolution of Civil & Commercial Disputes through Mediation

Civil & Commercial Mediation is the application of Mediation as a dispute resolution process for  civil & commercial disputes. Many civil and commercial disputes benefit from an early out of court resolution through mediation.

Types of civil and commercial cases that are well suited for mediation include:

 breach of contract
 loan / debt recovery or non payment of dues 
 all types of consumer disputes 
 Employment & Workplace
 landlord, tenant, construction and related 
 real estate disputes 
 joint venture 
 Shareholder disputes
 founder disputes 
 Admiralty/maritime
 Insurance
 Intellectual Property
 Sports & media

Case Study 1 - Vendor Dispute

The Dispute:

  • X supplies raw materials to retail company Y.
  • X and Y enter into a 5-year contract for the supply and delivery of raw materials.
  • Y defaults in payments upon delivery by X after 2 years of the contractual relationship.
  • X files Civil Suit in Court for specific performance of the contract, after making numerous requests for payment.
  • Case pending in court for over 2 years. 

The Process:

  • X and Y agree to Mediation with CAMP.
  • Y shares confidentially with Mediator that there has been a cash crunch because of diversification and expansion. X has been a reliable and quality supplier to Y. Y was keen to continue business with X.
  • The Mediator helped X understand the potential for increased business from Y and recognize the timely payments that had been made for the first 2 years.
  • Y understood the need for some payment to be made to X to cover minimum costs.
  • Mediator changes focus to helping X and Y understand each other’s financial needs as well as potential growth opportunities that could ensue from a continued relationship.

The Outcome:

  • X and Y renegotiated the contract keeping in mind expansion and diversification plans of X.
  • A new payment plan agreeable to both was created.
  • The case settled in 2 months.

The use of ODR:

  • Civil suit was filed in 2017.
  • There was very little movement in the court even before COVID. With the lockdown and courts shut, parties were concerned about further delays and were open to the alternative of mediation.
  • The availability of a virtual option of joining the mediation through video conferencing made the process accessible for both the parties.
  • The mediator was able to facilitate crucial conversations between the parties after 3 years of no communication. 
  • The Mediation was conducted with one of the parties in the north east and the other in the southern part of India. Mediator was based in Bangalore.
  • The convenience helped resolve this dispute in 2 months. 

Case Study 2 – IPR Dispute

The Dispute:

A scientist named X is Founder & Lead Scientist of company C. 
  • Senior employees Y and Z who had been part of the R&D Team for 5 years leave company C and start their own venture, Company D. 
  • X believes company D uses competing design and technology and files criminal and civil cases against Y, Z and company D for infringement. 
  • After 5 years of unproductive litigation, the parties agreed to try mediation.

The Process:

  • The Mediator was successful in moving the focus from whether or not there was infringement to understanding what the Parties really wanted in this situation. 
  • Mediation uncovered both Y and Z, are young, brilliant scientists with very promising careers. 
  • Since the filing of this lawsuit, they had to shut down Company D and have not been able to work. Their real interest was to be able to reclaim their lives and move on personally and professionally.
  • X had no clarity on what was ‘his’ IP and ‘their’ IP. He needed to identify his core IP and ensure that there is no future infringement.

The Outcome:

  • This dispute was settled within 1 month (Approx.).
  • An expert was brought in to understand the concept, design, and technology that belonged to X and to all three. 
  • With the expert and mediator, the parties identified technology that belonged to X and technology that belonged to all three. 
  • Y and Z agreed to pay X for the technology that was identified as his that they had used. 
  • Y and Z were allowed to use the IP that was identified as belonging to all three. 
  • They took time to draft a watertight settlement agreement & continue to maintain good relations to date.
  • The parties saw value in moving forward and not dwelling on whether or not there was infringement.

Case Law and Court Judgements promoting Civil and Commercial Mediation

Afcons Infrastructure Ltd. & Anr v. Cherian Varkey Constructions Co. (P) Ltd. & Anr, 

(2010) 8 SCC 24 Supreme Court 

As per the Supreme Court’s Judgment in Afcons the following type of cases are appropriate for Mediation –

All cases relating to trade, commerce and contracts, including disputes arising out of contracts (including all money claims), disputes relating to specific performance, disputes between suppliers and customers, disputes between bankers and customers, disputes between developers/builders and customers, disputes between landlords and tenants/licensor and licensees, disputes between insurer and insured.

All cases arising from strained or soured relationships, including disputes relating to matrimonial causes, maintenance, custody of children, disputes relating to partition/division among family members/coparceners/co-owners, disputes relating to partnership among partners.

All cases where there is a need for continuation of the pre-existing relationship, including disputes between neighbours (relating to easement rights, encroachments, nuisance, etc.), disputes between employers and employees, disputes among members of societies/associations/ apartment owners’ association.

All cases relating to tortious liability, including claims for compensation in motor accidents/other accidents. All consumer disputes, including disputes where a trader / supplier/manufacturer/service provider is keen to maintain his business/professional reputation and credibility or product popularity.

The Court cautioned that this categorization was illustrative, and not exhaustive or rigid.

B.S. Krishna Murthy & Anr v. B.S. Nagaraj & Ors, AIR 2011 SC 794 Supreme Court

Lawyers should advise clients to try for mediation for resolving disputes, especially ones where family relationships or business relationships are involved.”