George Lim SC of Wee Tay & Lim takes an in-depth look at the history and development of mediation in Asia:
"While arbitration currently appears an attractive way to resolve cross-border disputes, mediation is clearly a more timely and cost-efficient method of dispute resolution. In my view, it is only a matter of time before the international business community comes to the realisation that they should routinely attempt mediation before resorting to litigation or arbitration."
A long time ago, in a small village in the Malay Peninsula, two neighbours, Mohamad and Abdullah, had a long-standing dispute over the boundary of their respective lands. The dispute caused a huge rift between them and their families. Finally, both parties were persuaded by the community to see the village head to resolve the problem.
A thousand miles away, in a remote Chinese village in what is now known as Hong Kong, Chan and Leung were vegetable farmers who had gone into business together. When they passed away, the business was inherited by their eldest sons, who could not see eye to eye on how to run things. Rather than shut down the business, Chan and Leung’s heirs decided to see the Cantonese clan leader in their village for a solution.
This was how disputes were traditionally resolved in many parts of Asia hundreds of years ago.
Then arrived Western colonisation and influence. For Singapore, Malaysia, Hong Kong, India and a number of other countries, the British came and conquered. They brought with them the “three Cs”: cricket, the common law and the courts. We adopted the English legal system. Our judges wore wigs and our lawyers donned robes, not unlike their counterparts in England.
Litigation became the primary method of dispute resolution.
However, litigation had (and still has) its downside. Delays, choked courts and soaring legal costs forced many jurisdictions to look at more effective forms of dispute resolution.
At the landmark Pound Conference held in 1976, Harvard law professor Frank E Sander, considered one of the great pioneers of mediation in the United States, reminded us of “the central quality of mediation”, namely “its capacity to reorient the parties towards each other, not by imposing rules on them, but by helping them to achieve a new and shared perception of their relationship, a perception that will redirect their attitudes and dispositions towards one another.”
After the Pound Conference, mediation gradually grew in popularity and use in the US, UK, Europe, Australia and many other countries in the world.
In the 1990s, mediation, in the more structured form that many of us know today, was “introduced “ in many parts of Asia.
In Singapore, mediation became the primary method of dispute resolution in the subordinate courts (now known as the state courts) in the mid-1990s. In 1997, the Singapore Mediation Centre (SMC) was set up to provide mediation services and training. The SMC has since conducted mediation workshops in Malaysia, Philippines, Thailand, China, Hong Kong, Dubai, Fiji, Vietnam, Bahrain and many other Asian countries.
In Hong Kong, the implementation of the recommendations made by the Working Group on Mediation in 2010 caused a sea change in the mediation movement. Lawyers now have the duty to explain the option of mediation to their clients and costs sanctions can be imposed if parties unreasonably fail or refuse to attempt mediation.
In developing countries, mediation can also be a form of access to justice. A good example is a programme called “Justice on Wheels” in the Philippines, where buses are sent to remote, outlying areas which have little or no access to the courts. The mediator sits in the bus, and disputants line up to have their cases mediated in the bus. What a novel way of bringing justice to those who need it!
Mediation in Asia received a timely boost on 17 August 2007 when five leading mediation centres in Asia signed a Memorandum of Understanding to set up the Asian Mediation Association (AMA).
The five founding members of the AMA were the Hong Kong Mediation Centre, the Indonesian Mediation Centre, the Malaysian Mediation Centre, the Philippine Mediation Center and the SMC.
Since then, five other mediation organisations have joined the AMA: the Indian Institute of Arbitration and Mediation, the Delhi Mediation Centre, the Fiji Mediation Services, the Bahrain Chamber for Dispute Resolution and the Japan Commercial Arbitration Association.
Together, AMA members aim to: provide access to the best expertise for the management and resolution of commercial disputes in Asia; facilitate cross-border mediations; facilitate co-operation in mediation training; and increase awareness of mediation.
In 2013, a working group was established in Singapore to make recommendations on promoting international commercial mediation in Singapore.
The working group was co-chaired by Edwin Glasgow, QC and myself, and comprised an international (and interesting) mix of members: Michael Leathes; Professor Nadja Alexander; Valerie Thean; Professor Lawrence Boo; Lok Vi Ming, SC; and Josephine Hadikusomo.
Personally, this was one of the most interesting (and fun) working groups that I have been involved in.
The working group made a number of recommendations, chief of which were the following:
The SIMC will be based at Maxwell Chambers with its state-of-the-art facilities, and will work closely with the SMC and the Singapore International Arbitration Centre (SIAC) to provide mediation services to the international business community. Maxwell Chambers is the world’s first integrated dispute resolution complex housing quality meeting and hearing facilities as well as some of the top international dispute resolution institutions.
In their book, An Asian Perspective on Mediation, associate professor Joel Lee and Teh Hwee Hwee have put forward the thesis that in mediating disputes between Asian parties, cultural concepts like “mian zi“ (face) and “guan xi” (connection/relationship) play a more significant role.
While the story of mediation has evolved, the philosophy of Confucius, the importance of social harmony and the prevalence of “face” concerns continue to lie at the heart of Asian culture.
In the Asian context, face-saving also involves preserving respect, avoiding shame and maintaining overall harmony. Therefore, while modern mediation practice has been institutionalised, mediators in Asia have to develop their own style of mediation which is sensitive to the cultural values and beliefs in play.
In An Asian Perspective on Mediation, Lee and Teh consider the impact of such values and characteristics, and suggest strategies for mediating in an Asian context. Harking back to the “village head” mediator of the past, the learned authors observed that today, parties continue to look to a mediator for guidance, and respect the mediator’s personal sensibilities and wisdom. Therefore, the modern mediator in the Asian context may need to be more proactive in generating options for the mutual gain of the parties, as opposed to mere facilitation, which is all too often the model taught and practised in Europe and elsewhere.
Asia is presently experiencing strong economic growth. Foreign direct investment (FDI) hit US$400 billion in 2012, accounting for 30 per cent of global FDI flow. Asia could account for half of global GDP, trade and investment by 2050, according to the Asian Development Bank.
In particular, ASEAN economies have demonstrated significant growth, supported by strong domestic consumption and investment. The combined ASEAN economies grew by 5 per cent in 2013. In the same year, FDI into Indonesia, Philippines, Malaysia, Thailand and Singapore increased by 7 per cent to US$128.4 billion.
Furthermore, ASEAN has plans to form the ASEAN Economic Community (AEC). When this takes place, the AEC will transform ASEAN into a single regional market. There will be a better flow of goods, services, investment, skilled labour and capital within the region.
If you have not heard of the Trans-Pacific Partnership (TPP), look out for it. The TPP is a multilateral trade agreement which aims to promote trade liberalisation in goods, services, investments and government procurement. The 12 TPP countries include the US, Japan, Australia and Singapore. Together, the TPP countries represent 40 per cent of global GDP and about one-third of all world trade.
The increase in investments and transactions in Asia will likely see a corresponding increase in cross-border disputes. The business community will require access to cost-effective and timely methods of dispute resolution.
While arbitration currently appears an attractive way to resolve cross-border disputes, mediation is clearly a more timely and cost-efficient method of dispute resolution. In my view, it is only a matter of time before the international business community comes to the realisation that they should routinely attempt mediation before resorting to litigation or arbitration.
The future of mediation in Asia is bright. Mediation not only resolves disputes, it can preserve relationships and promote social harmony. Culturally, it is very Asian; I would like to think that mediation has its roots in Asia. Ironically, it took the West to reintroduce mediation to Asia.
I first used the term “MediAsian” when I was invited to speak at an event at the New York Law School on 28 May 2014, together with a panel comprising representatives from the International Mediation Institute (IMI), a global non-governmental organisation which aims to professionalise mediation worldwide.
I have since come across a blog by associate professor Ian MacDuff (director of the Dispute Resolution Initiative at the Singapore Management University) entitled MEDIASIAN, which explores the role of mediation and dispute resolution in Asia. Serendipity?
I have not discussed the concept of MediAsian with MacDuff. But, in a sense, I suspect that we share the same belief: that we in Asia have come full circle.
Like Marty McFly in Robert Zemeckis’ 1980’s classic film Back to the Future, we are “back to ‘MediAsian!’”.