Process of Mediation in Malaysia

The mediation process in Malaysia is governed by the Mediation Act 2012. The usual
mediation process will involve the parties in disputed, and the Mediator where the meetings
will be held together, at scheduled sessions as determined by the parties.1

In short, most mediations are generally carried out in the following five-tier formats. First,
mediators and parties will agree to some guidelines that they will follow in mediation. This
usually allows one person to speak at a time, to treat everyone respectfully, and in secret
(Malaysian Mediation Center, 2018). Second, parties usually make their initial statements
about their disagreements or any disputes and specify what they hope to resolve in mediation.

Third, each party discusses their interests and possible solutions to resolve their disputes with
the help of mediators. Fourth, intermediaries can hold private and confidential sessions with
each party to help determine further interests or discuss possible solutions. Finally, finalize
the resolution by which the mediator-assisted parties come up with a solution that is mutually
agreeable (Center for Mediation Malaysia, 2018). Upon successful mediation the settlement
agreement will attract and bind the parties.

The goal for mediation is resolution rather than the best position for experimentation.
Disclosure is important if both parties fully understand each other and once the parties have
the opportunity to discuss the issues, the resolution becomes a reality and the dispute can be
resolved peacefully. 2Although mediation does not resolve the dispute completely, the parties
often find clarity, better communication or partial settlement.

However, there are some disadvantages of mediation such as non-binding decision and thus it
is considered a weak decision. Another disadvantage is that when the mediation process fails
many valuable time will be wasted and cases will remain fixed for trial. Although there are
some , disadvantages of mediation but mediation is still seen as the most successful and
popular form of alternative dispute resolution solution adopted to achieve quick and unilateral
dispute resolution.

1
Study Circle Discussion Guide on Alternative Dispute Resolution (ADR). Study Circle, August, 2003.
2
Mahbub, SK. Golam. Alternative Dispute Resolution (ADR) in Commercial Dispute: The UK and
Bangladesh Perspectives. 1st edition. Dhaka, 2005, p. 29.
Advantages of Mediation

Low Cost and Affordable

Mediation is usually cheaper especially when compared to litigation expenses. By opting to

enter into a settlement, the dissenting party can avoid the huge cost and expense of bringing
the matter to court. It can also save valuable time and effort on the part of the parties by
avoiding lengthy trial and post-trial proceedings.

Although mediation may require less investment by the parties, however, if a resolution can
be reached, it can cut costs and expenses as a result of arbitration or litigation. Compared to
arbitration or litigation, the costs are expensive and often take a long time to resolve in a
dispute. In addition, arbitration and litigation occur in the short or incomplete segment of the
segment and there is no end to the session, where there is a continuous start and end of
proceedings that could result in unexpected expenses such as preparing to initiate arbitration
or litigation again, providing and transporting witnesses, get witnesses to testify and try to fit
them into a changing schedule. In addition, lawyers need to spend more time and clients need
to spend more money on attorneys' fees.3

In addition, the mediation costs are relatively low as they require a limited timeframe in
which intermediaries will focus on the issues, facts and legal arguments involved.
Furthermore, the presence of lawyers and all parties involved in mediation sessions will last
no more than a day or two. Compared to legal action, it takes more time and expense to
prepare the cause and effect papers, attend case management before trial, get witnesses in
court, and clients have to spend more money on legal fees. It clearly shows that mediation
can be very cost effective.

Mutually Satisfactory Outcomes

Mediation does not produce dissatisfaction with the conflicting parties in which one party
wins and the other loses, but produces satisfactory results for both parties. The outcome of
the dispute was agreed upon by both parties. Through mediation, the parties are generally
3
10Akhtaruzzaman, Md. Alternative Dispute Resolution Concept and Law and Legal Aid Law. 2nd
edition. Dhaka: Razia Khatun, 2008, p 25.
more satisfied with the agreement agreed upon, than the settlement made by the third party
decision maker. Both sides depend on each other because the outcome cannot be achieved
without mutual interest.

In mediation, during mediation sessions the parties themselves make decisions, set deadlines,
share information, obtain expert opinions when necessary and hold negotiations. It is the
parties themselves who have reached their own agreement in mediation and are more likely to
follow and abide by the terms. The mediator simply facilitates the parties to a satisfactory
resolution of the dispute and proposes an option for the resolution of the dispute.

Unlike litigation where the decision is made by a judge who is not a party to the dispute and
the judge himself has little knowledge and understanding of the franchise business.
Therefore, decisions made by judges can sometimes result in dissatisfaction with the parties.
However through mediation the parties will make a resolution when they are mutually agreed
upon where they have direct impact and knowledge of their business.

Furthermore, the agreement is better than the result of a simple compromise. In order to
achieve satisfactory results, both parties must agree on a common interest and will generally
benefit from it. Interest-based integration negotiations can result in better placement for both
parties than simple compromise decisions.4

Preservation of An Ongoing Relationship

The mediator's duty is to assist the parties in the dispute to understand each other's
complaints, facilitate discussion and compromise of an agreement but not direct the parties to
the outcome .Unlike the decision made by the court in which one party wins and the other
loses, the mediation outcome differs from that in the mediation, both parties will have
sufficient results at the end of the mediation. Many disagreements or disputes in the context
of relationships will extend the future. However, mediation often emerges as one of the
alternative dispute resolution solutions to maintain working relationships where mediation
solutions can address the interests of all parties in a way that is not possible in court decision
making.

Moreover, through mediation it helps both parties to maintain a valued business relationship
with minimal risk. Parties can discuss their disputes or disagreements in the franchise
4
Marsh, Stephen, R. Models of Mediation. http:/adrr.com/adr4/mediation.htm.
business without fear that their discussions or statements will result in a judge's negative
decision. 5The mediation process gives the parties the opportunity to express their frustration
to the other party about their franchise agreement and also to give the right to be heard to the
opposing party, to express their business concerns and formulate a proposal for satisfactory
results.

In addition, intermediaries play a key role in utilizing their ability to separate emotions when
parties are in conflict with business issues. If the mediator's success in facilitating the parties
to a fair and win-win situation, it can actually preserve the relationships of the parties in the
franchise business. This means that both parties agree to settle it without anyone being forced
by a court decision. In addition, the bond between the franchisor and the franchisee can be
strengthened and thus safeguard their relationship in the future.

Flexibility

Mediation is flexible unlike attending a court with many procedures to follow. Mediation is
held in a meeting room with people sitting around a table. Usually the parties will set their
time and place for mediation meetings with the help of mediators unlike litigation where the
hearing date has been set by the court. 6 Because they are personally involved in resolving
disputes, parties are in control of the outcome and not by third-party decision makers. This is
because the parties have a direct impact on the franchise business. In addition, it enables
solutions to be more flexible, creative and business-driven.

The parties can also attend mediation if they wish. There is no requirement that each party
must have a legal representative to attend the meeting. However, it depends on the issues at
issue, for example if the dispute is about rights where the parties have no knowledge of the
area so it is useful to have an attorney involve. However, engaging a lawyer can result in
additional costs to the parties. In essence, through mediation the parties negotiating their own
settlement have a greater degree of control over the outcome of their dispute. Profit and loss
are more predictable in a simplified solution than would be the case in the case of arbitration
or judgment where it depends on the court's decision based on the evidence presented.

5
Model Standards of Conduct for Mediators American Arbitration Association Adopted September 8,
2005.
6
Crrie, Menkel-Meadow (Ed). Mediation. London: Aldershot, 2001, P.183.
In addition, through mediation the parties can negotiate their terms of the agreement. The
parties often feel stronger than those who use their supporters to represent them. Mediation
negotiations can provide a forum for learning and exercising personal power or influence
unlike those who advocate for their advocates, whose results are sometimes influenced by the
views or opinions of advocates.

Disadvantages of Mediation

Cost and Delay

One of the disadvantage of mediation is the waste of time and cost if the mediation process
fails. Very valuable time will be wasted and cases will need to be discussed. This is because
mediation does not guarantee the resolution of the dispute. There may be no resolution at all.
A mediator should look at each case in the context of the type of case, their advocates and
their lawyers.7 More time is spent, especially in cases where it can be intermediary-
unfriendly, and thus time-consuming.

Although the costs and delays in mediation are relatively small compared to the overall costs
and time spent by litigation or arbitration, mediation does not involve preparation, mediation
education, and attendance at mediation sessions. All this costs the parties and takes time if
mediation fails.

Mediation Does Not Create Precedents

Mediation does not make any advance, and does not assist in similar repeated disputes. Each
dispute needs to be resolved again. It recognizes that mediation is not helpful in the
development of our common law. The mediator will also face some difficulties in facilitating
disputes as there is no precedent to follow.

Lack of Experience and Knowledge of The Mediator

7
Culbert, B. Mary, What's a Lawyer to Do– in Mediation.
In mediation, the parties are free to pick a mediator of their own choice. Sometimes the
mediator appointed by the parties is not legally trained to handle franchise dispute. 8 Lack of
experience and knowledge pertaining to the issue in dispute may contribute to the failure of
mediation. Even though there are some disadvantages in mediation, however, by adopting
mediation is still far better than litigation in arriving at a solution to a franchise dispute.

References

 BC, Mediate., (2015). “Mediation: An Effective Tool for Business Dispute

Resolution”, Small Business BC. Retrieved from
https://smallbusinessbc.ca/article/mediation-effective-tool-business-dispute-
resolution/.
 Kwai, Mah Weng. (2012). “Mediation Practices: The Malaysian Experience.” 5 MLJ
clxvi.
 Malaysian Mediation Centre, (2018). Retrieved from
http://www.malaysianmediationcentre.org/mediation-process.
 Mohamed Ishak Abdul Hamid and Nik Azahani Nik Mohammad. (2016) “Cross
Culture Jurisprudential Influence on Mediation in Malaysia.” 4 MLJ xli.

8
According to Oxford Dictionary the word self-determination means the right of a country or region
and its people to be independent and choose their own government and political system. Oxford
Advanced Learner’s Dictionary. 8th edition. Oxford University Press, 2010, p .1387.