Commercial mediation is a dispute resolution mechanism used to resolve commercial disputes between two or more parties. The process is facilitated by a mediator, who assists the parties in finding a mutually agreeable resolution of their dispute.
In a mediation, the control over the outcome of the dispute lies – and always remains – with the parties. The mediator has no decision-making power. A mediator facilitates constructive communication between the parties, helping them to clear up misunderstandings, to build trust, and to generate options for resolving their dispute.
Commercial mediation cases can include:
Switzerland is respected internationally for its diplomacy and recourse to peaceful means of dispute resolution. Within Switzerland, there is a strong tradition of resolving disputes by consensus – not always an easy task in a federal system with four official languages. The Swiss Chamber of Commercial Mediation (SCCM), established in 1997, has built on those traditions, promoting development of mediation as an effective method for resolving business disputes.
In 2007, the seven Swiss chambers of commerce adopted the first Swiss Rules of Commercial Mediation. Now revised and updated as the Rules of Mediation of the Swiss Arbitration Centre, these provide a formal framework and institutional assistance to parties and mediators in commencing and conducting fair and effective commercial mediations.
The Swiss Chamber of Commercial Mediation continues to work – also in parallel with the Swiss Arbitration Centre – in promoting mediation in Switzerland and in helping parties find mediators for their commercial disputes. Mediators accredited by the Swiss Chamber of Commercial Mediation reflect the multilingual and multicultural environment of Switzerland as well as its position as a leading home of international commerce.
Mutually beneficial solutions
Parties are able to develop creative and binding solutions that serve all parties’ interests. Ideally, the parties are able to create a win-win outcome, whereas in arbitration or court litigation the winner often takes it all. Solutions developed in mediations focus on the future and not the past.
The parties are in control
The authority to resolve the conflict is not outsourced to an external tribunal. Mediation empowers the parties to find a solution on their own.
It is confidential
A mediation takes place in private, so the communications that take place in the mediation remain private and confidential. The parties and the mediator agree prior to starting the mediation that information disclosed in the mediation will not be used against the parties in an arbitration or litigation in the event the mediation does not result in a complete resolution of the dispute.
Reduced costs and fast process
Mediation is less costly, faster and more efficient than arbitration or court proceedings. Generally, a couple of mediation sessions will suffice for the parties to settle the dispute or to find out that the dispute cannot be resolved by mediation. Thus, mediation does not cause an overall delay in a dispute resolution process.
Settlement rates for mediations are widely reported to be close to 70%. The entire process, from proposing mediation to finding a mediator to conducting and ending the mediation, can usually be completed within a period of several weeks to months.
Preservation of business relationships
In cases in which disputes arise in an ongoing business relationship or with respect to a long-term contract, mediation offers a dispute resolution process in which parties can openly communicate regarding any dissatisfactions or changed circumstances and discuss underlying interests. This helps to find solutions that restore, preserve or even expand the working relationship.
A significant benefit of mediation is its flexibility, so the parties and mediator are free to decide how to conduct the mediation. However, a typical commercial mediation will usually progress through these stages:
The Swiss Chamber of Commercial Mediation actively promotes mediation as an effective mechanism to resolve commercial disputes. We accredit commercial mediators who meet our standards for mediation training as well as continuing education and experience. We offer a search function on our webpage where you can find and view the profiles of SCCM-mediators with varying backgrounds and experiences. An SCCM mediator can assist you and your company in resolving your disputes quickly and cost efficiently.Find a Mediator
Mediation is a means of dispute resolution that is less formal than arbitration or court proceedings. Nevertheless, it can be helpful for the parties to include in their mediation agreement an agreement that a specific set of rules will apply to the mediation. Such rules help in managing the mediation effectively by setting out basic procedures for starting, conducting, and ending the mediation, as well as related obligations such as the confidentiality of the mediation.
If rules administered by an institution are chosen, the institution will assist in appointing a mediator if the parties cannot agree and will facilitate communication with the mediator as well as logistics such as payment of deposits and of the mediator’s fee. While we recommend the Swiss Rules of Mediation administered by the Swiss Arbitration Centre, there are other well-established rules that can be used, including the International Chamber of Commerce (ICC) Mediation Rules and the World Intellectual Property Organization (WIPO) Mediation Rules and many others.
If the parties prefer a set of rules not administered by an institution, they may wish to agree to use the UNCITRAL Mediation Rules.
Parties are encouraged to include a mediation clause in their contract. This ensures that the parties have a chance to evaluate the option of mediating their dispute before launching expensive and lengthy arbitration or court proceedings.
It is recommended that the parties use model clauses suggested by the institutions that administer the rules chosen by the parties (e.g., Swiss Arbitration Centre, ICC, WIPO) or set out in annexes to the rules (UNCITRAL). These model clauses are well drafted and guide the parties in filling in information that will avoid disputes about how a future mediation is to be conducted.
Mediation can be used at any stage of a dispute: during an internal escalation process, before arbitration or court proceedings are commenced, during arbitration/litigation in the sense of a “mediation window”, or in parallel to ongoing arbitration/litigation. Sometimes a dispute that is not resolved in mediation before arbitration/litigation starts can be settled in a second mediation, after the parties have submitted their pleadings and evidence and have a better understanding of the strength of their positions as well as the time and expense that will be required to complete the arbitration/litigation.
It is up to the parties to decide where they would like the mediation to take place. However, as the meeting environment is important, we recommend that the parties decide on a neutral venue, so that neither party feels uncomfortable. Ideally there should be at least three rooms available at the agreed venue, to facilitate private sessions and breaks.
Yes! Online mediation has become commonplace due to the Covid pandemic and the availability of online platforms that allow for private breakout “rooms”. It is important, however, that parties plan to focus on the mediation during the scheduled session(s) rather than being available for, and distracted by, other tasks.
If the parties wish, yes, they can be assisted by two or more mediators in a ‘co-mediation’. Co-mediations are usually recommended if, for instance, the case is complex, if the parties wish to have a mediator with specific technical expertise, or if it is a multi-party mediation.
It is not necessary to have a lawyer at the mediation, and generally it is better if business representatives take the lead in speaking for the parties. But it is important to remember that the mediator – even if he/she is a lawyer – will not act in the capacity of a legal advisor in the mediation. Therefore, it can be helpful for a party to be assisted by a lawyer during the mediation proceedings, especially if the dispute includes legal issues that need to be resolved. A lawyer familiar with the company’s business and industry may also be a helpful resource in identifying creative solutions to the dispute.
The parties can decide the time frame of the mediation because of its flexible nature. Mediations are distinguished as a speedy and efficient means of resolving disputes and a commercial mediation typically takes one or two full-day sessions. However, this is largely dependent on the complexity of the case and the unique interests of the parties. In some cases, a break is needed between mediation days for the parties to gather more information or investigate the feasibility of potential solutions to the dispute.
The cost of a mediation will include the mediator’s fees, which are typically charged on an hourly or daily basis (including for the time spent discussing the organization of the mediation with the parties and reviewing background materials provided by the parties), reimbursement of any expenses incurred by the mediator (such as for travel to the mediation venue), and the administrative fee if the mediation is administered by an institution. The parties may also incur costs for assistance by their legal counsel in preparing for the mediation (such as for analyzing the chances of success in arbitration or court if the dispute is not settled and assistance with drafting the background materials provided to the mediator). The general rule is that the parties bear their own costs (e.g., lawyer’s fees) and split the cost of the mediation (mediator’s fees and institutional fees). The terms of compensation will be agreed upon by the parties and the mediator at the commencement of the mediation.
A hallmark of mediation is that it is voluntary. Therefore, if at any point in the mediation any of the parties no longer wish to continue the process, yes, they are able to terminate the mediation.
If a settlement agreement is reached in the mediation, it should be documented in writing and signed by the parties’ authorized representatives. This agreement will be a binding contract which is enforceable in the same manner as any contract.
In Switzerland, if the settlement is reached in mediation after court proceedings have started, the parties can request that the settlement is placed in on record, making it enforceable as a binding court decision. If there are no pending court proceedings, a settlement can be recorded in a notarial deed (provided applicable legal requirements are met), which allows enforcement in the same manner as a court judgment. If arbitration proceedings have already started before the mediation, the parties can request that the arbitral tribunal incorporate the settlement into a consent award, which is enforceable in the same manner as any arbitral award.
If the mediation does not end with a settlement agreement, the parties are free to decide how to proceed. If this means litigation or arbitration starts or continues, the time and cost spent on the mediation will not be wasted because it will have helped the parties to prepare better for the litigation/arbitration, as they will have a better understanding of their own legal position including potential weaknesses in their case.
Mediations do not have to be conducted with the help of an institution. In this case, the parties agree on a mediator. The mediator organizes the mediation and conducts it in consultation with the parties.
Mediations which are administered by an institution are especially helpful where the parties cannot agree on how to select a specific person to serve as mediator. Each institution has its own set of rules, but they all contain a mechanism that sets out how a mediator will be appointed if the parties cannot agree. In addition, the Swiss Arbitration Centre provides (for a fee) certification that a mediation has taken place and certification of authenticity of a settlement agreement reached in a mediation administered by the Centre. These can be helpful if a party needs to prove that it has participated in a mediation prior to filing a lawsuit or request for arbitration or in enforcement of the settlement agreement.