Mediation v Arbitration: What Is the Difference? PART 1
A common trend in commercial contracts is the inclusion of a mediation and/or arbitration clause. As a general point of departure, these clauses require the parties to the contract to refer any dispute arising from the contract to mediation as a first step. Should the mediation process be unsuccessful, these clauses then require that the parties have the dispute arbitrated. These clauses are in a certain sense a double-edged sword. On the one hand, they promote contractual parties amicably resolving disputes. The positives of this are the avoidance of litigation and legal costs. On the other hand, if mediation proves to be unsuccessful arbitration can be a costly exercise and leaves dissatisfied parties with few avenues to reserve or challenge the decision. This article will explore what the differences are between mediation and arbitration generally. Mediation Over time, there has been a shift towards consensus-based dispute resolution processes and as a result, the use of mediation is more prevalent. This is especially true for commercial matters. By using mediation as a way to resolve disputes the parties thereto are able to be fully involved in and have more control over the process itself and the outcome. Currently, in South Africa, there is no legislation governing mediation as a method to resolve disputes. As such, there is also no definition of ‘mediation’ readily available in our law. Despite this, there are working definitions of mediation that have been suggested by authors and which are widely accepted. For example, the National Alternative Dispute Resolution Advisory Council in Australia defines mediation as follows: “Mediation is a process in which the parties to a dispute, with the assistance of a dispute resolution practitioner (the mediator), identify the disputed issues, develop opinions, consider alternatives, and endeavour to reach an agreement. The mediator has no advisory or determinative role in regard to the content of the disputes or the outcome of its resolution but may advise on or determine the process of mediation whereby resolution is attempted. Mediation may be undertaken voluntarily, under a court order, or subject to an existing contractual agreement.” From this working definition, some of the main features of mediation as a dispute resolution process can be identified. These include: 1. The process is a voluntary, non-binding, non-prescriptive dispute resolution process. Parties involved in mediation do so completely voluntarily. This method of resolving disputes is ineffective if one or more of the parties involved are not actively involved in seeking an agreement. This means that should one or more party decide to not be involved in the process, mediation will fail. 2. The mediator is an independent individual who facilitates the process. The mediator is generally a specialist in the procedures of mediation. Their role is not to be specialists in the content of the dispute at hand. Their expertise in how the mediation process works allows them to actively assist the parties to a dispute to reach an agreement themselves. A mediator can also be described as a facilitator since their main task is to help the parties through the process so that the parties themselves resolve the dispute. Essentially, the mediator assists the parties in their negotiations. 3. The process is confidential. This is often seen as one of the greatest advantages of mediating a dispute. Mediation is completely confidential. Confidentiality in this context is two-fold. Firstly, the mediator is bound to keep the fact that mediation is taking place confidential. This means that the fact that parties are resolving a dispute with mediation cannot be shared. Secondly, the mediator is bound to keep the happenings of the mediation confidential. What was discussed between parties, offers that were made, and all other communications regarding the dispute must remain confidential. These key features were also discussed by the High Court in the case of Kalagadi Manganese (Pty) Ltd and Others v Industrial Development Corporation of South Africa Ltd and Others. From the above, it is clear why mediation has become a popular way to resolve disputes. A discussion relating to Arbitration will follow in Part II. Reference list: T Hedeen, Coercion & Self-Determination in Court-connected Mediation: All mediations are voluntary, but some are more voluntary than others (1997). Kgalagadi Manganese v Industrial Development Corporate of South Africa (2021). J brand, F Steadman & C Todd Commercial Mediation: A User’s Guide (2016). While every reasonable effort is taken to ensure the accuracy and soundness of the contents of this publication, neither the writers of the articles nor the publisher will bear any responsibility for the consequences of any actions based on information or recommendations contained herein. Our material is for informational purposes.
Domicilium Citandi Et Executandi in South African Law
How is it possible that someone can obtain judgment against me, without my knowledge of any summons issued against me or a court date to state my side of the story? Well, in our law this could happen if you agreed to a domicilium address without notifying other parties about a change therein when you move away from said address What is domicilium citandi et executandi? Domicilium citandi et executandi (hereinafter, “domicilium address”) is a Latin term that means “house for being summoned and executed upon.” In South African law, it refers to the address that a person nominates in a contract as the address where they will receive all legal notices and processes. This address can be a physical address, such as a home or business address, or it can be an email address. Where did the concept of a domicilium address originate? The concept of a domicilium address originated in Roman law. In Roman law, a person’s domicile address was the place where they were a resident for legal purposes. This meant that all legal notices and processes had to be served at the person’s domicile. How is a domicilium address used in today’s contracts? A domicilium address is commonly used in today’s contracts. This is because it allows parties to a contract to specify the address where they want to receive all legal notices and processes. This can be helpful in ensuring that parties are aware of any legal proceedings that are being brought against them. What are the pitfalls of a domicilium address? There are a few potential pitfalls associated with a domicilium address. One pitfall is that if a person moves and does not notify the other party to the contract of their new address, they may not receive legal notices or processes that are served at their old address. This could result in a default judgment being entered against them. Another pitfall is that if a person’s domicilium address is a physical address, and that address becomes inaccessible, they may not be able to receive legal notices or processes that are served at that address. This could also result in a default judgment being entered against them. In the matter of Amcoal Colleries Ltd v Truter 1990 (1) SA 1 (A), the Supreme Court of Appeal held that a person’s domicilium citandi et executandi can be chosen in a contract, and that service of process at that address is good service, even if the person is not present at the time. How can you avoid judgment against you when the domicilium address is no longer a place you can access? Firstly, you should make sure that you notify the other party to the contract of your new address as soon as possible. Secondly, you should keep track of your mail and make sure that you open all of it, even if it is addressed to your old address. Thirdly, you should check your credit report regularly to make sure that there are no judgments against you that you are unaware of. Example: Suppose John signs a lease agreement with a landlord. The lease agreement includes a clause that states that John’s domicilium address is the address of the premises. John then moves from the premises to another place without notifying the landlord of his new address. If the landlord then sues John for breach of the lease, the landlord can serve the summons on John at the address of the premises, being the domicilium address. Even if John does not receive the summons, he will still be bound by the judgment if he does not respond to the lawsuit. Domicilium citandi et executandi is an important concept in South African law and it is important to understand the implications thereof before you sign a contract. If you are unsure about what your domicilium address is, you can consult with an attorney. While every reasonable effort is taken to ensure the accuracy and soundness of the contents of this publication, neither writers of articles nor the publisher will bear any responsibility for the consequences of any actions based on information or recommendations contained herein. Our material is for informational purposes. Powered by SucceedGroup