by ACI Partners

Publications24 June 20150 comments

Mediation in Moldova: In Expectation of Demand?

Continuing the ADR theme, addressed by us, last week, in the Article “Arbitration in Moldova: per aspera ad astra” today we asked ourselves: what does local business know about mediation institution in Moldova?

I. Current picture of Moldovan justice

For more than 20 years people and business of Moldova have been taught to submit each and every their dispute to courts of justice.  Being diligent students, we learned the lesson and now our courts are overloaded with thousands of claims that are examined years.

Today we have 42 courts of the first level in which about 233 judges examine over 61,000 civil cases per year.  The monthly load per judge is 35 cases.

The burden put on Moldovan justice has inevitably influenced the quality of act of justice.  The level of public trust in judicial system is very low.  The bi-annual surveys conducted by the Public Policy Institute contain a constant question regarding the degree of public trust in state institutions, including trust in justice.  Dynamic analysis of responses of “very confident” and “I have no confidence at all” to the question “How much do you trust the justice?” obtained in the period 2005-2011, shows that the degree of confidence bounced.  However, starting with March 2009, an alarming trend can be observed.  In May 2011, it was found that only 1% of people surveyed responded that they have total confidence in justice, while 42% said they have no confidence in justice.

Taking into account this regrettable background, Moldovan state proposed a complex reform of justice.  It purports to restructure the activity of the courts of law, the prosecutor’s office, attorneys and other legal professions, making the justice much more efficient, friendly and human.

It is notable that one separate direction of the reform is the support of justice to business.  The support of justice to business is seen by the consolidation of the Alternative Dispute Resolution system, especially arbitration and mediation.

What has been done?

We already have introduced you in the world of Arbitration in Moldova.  This article purports to give you a little more background on mediation in Moldova.

II. What Is Mediation?

Mediation brings people in conflict together with a specially trained, impartial, third person who assists them in reaching a voluntary agreement.

The role of the mediator is to facilitate communication between the parties, assist them in focusing on the real issues of the dispute, and generate options that meet the interests or needs of all relevant parties in an effort to resolve the conflict.

Mediation is not a court of law.  Mediation does not rely on specific law issues, evidences and statements of facts. Mediators will not render decisions.  Parties shall discuss to solve their own issues by looking to the future instead of finding the guilty party.

In contrast, the courts of law are bound to deliver judgments based upon law, and based on the materials of the case.

The judge may not address issues that were not included in the statements of the parties, or take into account evidences that were not submitted to court as regulated by law.  Judges hardly reach the genuine issues or causes of a dispute and may not focus on individual circumstances.

Judge’s responsibility is to interpret and rule on matters of law.  The mediators’ responsibility is to assist the parties in settling their dispute being impartial to all parties.

III. What is the legal framework governing Mediation in Moldova?

Mediation is a legal institution in Moldova, regulated, mainly by the Law on Mediation, adopted in 2007. The law sets up the legal framework for the mediation in Moldova, provides for the conditions to become a mediator, rights of the parties implied in mediation, regulates the specifics of mediation procedure for different types of disputes and ensures confidentiality of the entire mediation process.

General provisions allowing the settlement of parties, including via Mediation, are incorporated as well in the core material and procedural acts of Moldova – Civil Code of Moldova, Code of Civil Procedure, Criminal Code, Code of Criminal Procedure and others.

IV. What are the advantages of Mediation

• Quicker: Mediation is usually quicker than a court or even arbitration examination.  Years may pass before parties will gain a final judge’s decision.  Months will pass before an arbitration award is delivered.  In contrast, a mediated agreement may be obtained in a couple of hours or in sessions over a few weeks.

• Less Expensive: Mediation is very much less expensive than a typical lawsuit.  Going to a court implies payment of state fees, lawyer’s fees, expenses related to disclosure of evidence.  Often costs exceed benefits.  Employing a mediator is much cheaper, and combined with the much quicker term of resolving the dispute, you’ll be paying less money.  If you can’t agree, other legal options are still possible.  Even a partial settlement can diminish later litigation fees.

• Less Formal, Greater Flexibility and Control: Mediation is less intimidating than going to court.  There are no strict rules of procedure.  There is no judge that will oblige you to act as it is prescribed.  In mediation, the parties are in control.  Parties are the decision makers, they decide the outcome of their dispute.  Mediators will only help parties to discuss, will adapt the environment of the meeting to the case and needs of the parties.  Effective mediators use their skill and experience to influence progress and yet, importantly, leave the decision about whether to settle and on what terms firmly with the parties.  Mediators will not impose a solution or render decisions.  Parties will agree on their own, unique solution.

• Voluntary: Mediations are initiated by mutual agreement between the parties in a dispute.  Once mediation has started, parties’ participation is always voluntary, meaning that any party can choose to leave mediation without any adverse consequences.  Mediation is not binding unless and until an agreement is reached, when settlement terms become an enforceable contract.  Until that happens, the parties may walk away from the mediation at any time.

• Confidential: Unlike court cases, which are a matter of public record, mediation is confidential.  This means that there is no record of the meeting, no transcript, no audience and any evidence introduced during mediation cannot be used later or revealed.  Mediation is a private process and not subject to public knowledge and possible media attention as the case with civil litigation can be.

• Looks to Future rendering Workable Solutions: Going to court can divide people and increase hostility.  Business and personal relationships will be destroyed through years of trial.  Mediation looks to the future.  It helps to end the problem now, and preserve the relationship.  Because it is a collaborative, not adversarial process, there is nobody to lose or win.  There is no admission of guilt or incrimination.  Both parties are going to win.  They are free to negotiate beyond initially stated positions; they will tailor the result to their actual needs.

• Higher satisfaction: Participants in mediation report higher satisfaction than people who go to court.  Because of their active involvement, they have a higher commitment to upholding the settlement than people who have a judge decide for them.  Mediations end in settlement 70 to 80% of the time and have high rates of compliance to agreed solutions

V. How can we get to the mediation?

Mediation is initiated by mutual agreement between the parties in a dispute.  It is essential that the parties agree to settle the dispute (including a potential one) by the mediation.  Agreement by which the parties agree to submit the dispute to mediation is called mediation agreement.  It shall be agreed in writing, and may take the form of a separate agreement between parties or can be expressed as the mediation clause inserted in the basic agreement of the parties.

Mediation may be agreed upon, before, during or after the dispute arose.  Mediation can be agreed as well when the dispute has been already submitted to court.  Mediation can be agreed at different stages of examination within the courts of the first level, within appeal, recourse or even within enforcement procedure.

VI. What is the standard clause to be included in domestic commercial contracts to refer disputes to mediation?

All claims, disputes, and controversies arising out of or in relation to the conclusion, performance, interpretation, application, execution, termination or enforcement of this agreement, including but not limited to breach thereof, shall be referred to mediation before, and as a condition precedent to, the initiation of any claim in court of law.  In this sense a party (“offering party”) makes a written offer of compromise (“Mediation Request”) to another party (“offered party”) in which proposes three Moldovan licensed mediator to mediate the case.  Within 3 business days from the receipt of the Mediation Request offered party shall answer, in written, the Mediation request by choosing one of proposed mediators.  The mediator that has been chosen by the parties shall mediate the dispute according to the conditions set in the mediation agreement to be signed with both parties.  In the event parties are unable to agree on a mediator or terms of mediation agreement parties shall submit their claims to the competent courts of law.  

VII. How can I choose a Mediator?

As of today there are more than 650 licensed mediators in Moldova.  These mediators have been licensed by the Ministry of Justice and are trained to mediate different types of disputes.

The complete list of mediators may be accessed at:

http://mediere.gov.md/sites/default/files/tabelul_mediatorilor_actualizat_la_situatia_27_05_2015.pdf

Following the implementation of the justice sector reform a part of authorized mediators have been also trained by the Center for Effective Dispute Resolution from the United Kingdom.  It is one of the leading mediation training providers that have been contracted trough an EBRD project in Moldova and developed intensive, high standard training courses in Chisinau.

One of our colleagues, Marina Zanoga has been also trained by CEDR and now is an active participant to the project of the Moldovan Ministry of Justice on increasing the awareness on mediation.  Within this project, pro bono mediation services have been rendered by Marina Zanoga to parties that have commercial disputes examined by the Chisinau Appeal Court.

VIII. Conclusion

Mediation is one of the options given to litigating parties.  It is up to the companies to decide how they will solve their disputes – whether they go to the court, arbitration or mediation.

The advantages of mediation in our view are rather obvious; being a procedure with no prejudice it is worth to be tried, isn’t it?

Should you be interested that your case is resolved by mediation or require qualified advice on mediation in Moldova, please contact ACI Partners, Marina Zanoga, attorney-at-law, CEDR licensed mediator.