MEDIATION ON BUSINESS SETTING

Category: Legal Services
Written by Detty Amelinda Shantika Putri on 18/09/2022
The author’s views are entirely their own and may not always reflect the views of Putranto Alliance.

Mediation has been recognized as one of a few alternative dispute resolutions. It is a way to resolve a dispute before it is processed into court and negotiated with the help of a mediator. Mediation as an alternative dispute resolution also has more benefits than the court for the disputing parties, including time and cheaper cost.

WHAT IS MEDIATION?

As an initial step, disputes in a business environment can be settled using mediation. Mediation is a way of resolving disputes through negotiations to obtain the parties’ agreement with the mediator’s assistance, according to the Regulation of the Supreme Court of the Republic of Indonesia Number 1 of the year 2016 (Mediation PERMA).

 

The mediation needs the presence of a neutral third party, a Mediator. A mediator can assist the disputing parties with the mediation so it can be held efficiently and effectively and obtain a mutually satisfactory and fair settlement. In addition, a mediator has various functions ranging from holding meetings, leading negotiations, taking notes, making agendas, proposing settlements, maintaining order in negotiations, to assisting the parties in drafting agreements.

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WHY DO BUSINESSES NEED MEDIATION TO SOLVE DISPUTES?

Businesses need mediation to solve disputes because mediation is one of the dispute resolution alternatives to help the disputing parties to reach a win-win solution. Mediation also helps establish good relations between the parties who previously had a dispute without the need to solve the dispute in court. Mediation also provides an arrangement between the disputing parties to maintain good relations since mediation resolves problems efficiently and effectively with the help of a neutral mediator. The mediator who presents also has to facilitate, providing a few options for mutual advantage between the parties.

The mediator ensures that the parties can control the outcome as negotiated. In this case, the disputing parties can settle their conflicts and set their interests and needs with each party’s approval. In addition, the agreement of the disputing parties is also based on equality between the parties. If both parties use law court to settle their disputes, one of the parties will be harmed since the other party’s wish will be granted, while the other’s don’t. And so, the dispute can be a so-called win-lose situation without the parties’ control of the outcome since the judge is making the decision of the court. And so, the relationship between the parties ends.

HOW CAN MEDIATION HELP THE DISPUTING PARTIES IN A BUSINESS SETTING?

There are several reasons why mediation is an alternative dispute resolution to resolve problems between the disputing parties. It has the potential to resolve disputes more economically, both from the point of view of cost and time. Since the main purpose of business is getting as much profit as possible, resolving the dispute by taking it to court can be considered less effective for the disputing parties. Taking the dispute to solve in court takes a long time to solve the dispute and also costs expensive.

In addition, there is also a burden that affects the parties’ business activities. The business activities will be focused on the dispute, too. Hence, it makes the business activity less effective than it should be. That said, mediation is the correct answer for the disputing parties. The disputing parties must negotiate within the time limit in the mediation session. So it brings effectiveness in the business activity to obtain satisfying results and a settlement between the disputing parties.

DIFFERENCE BETWEEN MEDIATION AND NEGOTIATION

Negotiation is a two-way communication to reach an agreement. As time passes, negotiation is used as an alternative for resolving disputes outside the court without involving third parties, and only the conflicting parties should participate in the negotiation. Negotiation can be seen as similar to mediation, but the difference between mediation and negotiation is that in negotiation, the negotiators themselves are the conflicting parties. It also focuses on the interests of the conflicting parties. In negotiations, the parties are not interested in maintaining their will to defeat the other party since negotiation is for internal purposes only. The conflicting parties look at various answer possibilities and alternative solutions since negotiation is the art of solving problems between the conflicting parties (joint problem solving). While on the other side, mediation is a negotiation followed up when the negotiation stage fails. It is also assisted by a neutral third party who does not have the authority to decide and aims to resolve the dispute between the parties based on a win-win solution.

There are 4 (four) stages of negotiation that the conflicting parties need to go through. The four stages are:

  1. Stage Orientation and Positioning
    Each conflicting party opens the contract while the negotiators begin to lay out their problems in general terms and develop opening positions.

  2. Argumentation Stage
    Each conflicting party provides a clear picture of the main problem and its strengths and weaknesses.

  3. Emergency and Critical Situation
    Negotiators begin to provide new alternatives to anticipate the possibility of a deadlock.

  4. Dealing Stage
    Both parties make a formal agreement and sign it when an agreement has been reached.

MEDIATION STEPS

The mediation steps consist of the Pre-mediation Stage and the Mediation Stage. Based on the Mediation PERMA (Peraturan Mahkamah Agung / Supreme Court Rules), the Pre-mediation stages are:

  1. At the first trial that the disputing parties attend, the judge requires the disputing parties to do mediation first.
  2. The judge, through his attorney or directly to the parties, should encourage the parties to be direct and active during the mediation process.
  3. The disputing parties' attorneys should encourage the disputing parties to be direct and active during the mediation process.
  4. The judge should explain the mediation procedure following Mediation PERMA for the disputing parties.

Following the Mediation PERMA, the stages of the Mediation Process are:

  1. Within 5 (five) working days after the disputing parties have appointed the mediator, each disputing party should submit a resume of the case to each other and the mediator.
  2. Within 5 (five) working days after the parties failed the mediation, each disputing party may submit a case resume to the appointed mediator.
  3. The mediation process lasts 40 (forty) working days since the mediator is chosen by the parties or appointed. The mediation period can be extended for 14 (fourteen) working days, but the mediation process does not include the period of examination of the dispute case.
  4. With the agreement of the disputing parties, mediation can be held remotely using online communication tools.

MEDIATION PRINCIPLES

There are 5 (five) principles of mediation. These 5 principles of mediation are also known as the five basic philosophies. The five principles are confidentiality, volunteering, empowerment, neutrality, and the unique solution. The explanation of each principle are:

  1. Confidentiality
    Confidentiality means that only the disputing parties and the mediator attend the mediation session process. This confidentiality can be seen as an advantage to the disputing parties since the result of the dispute settlement will not be published to the public.

  2. Volunteering
    Each conflicting party provides a clear picture of the main problem and its strengths and weaknesses.

  3. Empowerment
    This principle is based on the assumption that the disputing parties can negotiate their problems and reach an agreement and a settlement as they agreed.

  4. Neutrality
    The mediator is only authorized to control the mediation process, not decide whether the party is right or wrong, and should not impose their opinion. The disputing parties decide the agreement to settle the dispute in mediation without the mediator's interference.

  5. Unique Solution
    The mediation results follow the wishes of both parties, which is closely related to the concept of empowerment of each disputing party. Hence, a unique solution is decided between the disputing parties.

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HOW CAN WE HELP

Here in Putranto Alliance, with a certified mediator, we can help you to deal with any dispute, especially in mediation. We can represent you in a negotiation or act as a neutral party to help you find an amicable solution to the dispute. Our skilled and certified team is ready to assist you in mediation and efficiently obtain a win-win solution between the parties.

REFERENCES

Regulation of the Supreme Court of the Republic of Indonesia Number 1 of the year 2016, regarding mediation

Law Number 30 of 1999, regarding Alternative Dispute Resolution

“Mediasi Sebagai Salah Satu Penyelesaian Sengketa Bisnis (Di Desa Gelogor,Kecamatan Kediri, Kabupaten Lombok Barat)”, I gusti Agung Wisudawan et al

“Mediasi Sebagai Alternatif Penyelesaian Sengketa Di Luar Pengadilan”, Sri Mamudji

FAQs

The advantage of using mediation is that the process of the mediation process is faster than solving the dispute in court. It cuts the cost and also time.

The disputing parties may choose a mediator with a mediator certificate within 1 (one) day. The judge chooses the mediator when the party fails to choose a mediator.

When a mediation session fails to reach an agreement between the disputing parties, the mediator conveys a written notification to the judge. Hence, the trial continues in court.

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