CHAPTER 1

ALTERNATIVE DISPUTE
RESOLUTION: CONCEPT
AND SELECTED PROCESSES

Litigation : Inefficiency & Backlog of Cases in Courts

(Source : Bar Council)
Court

Cases

Backlog (As at December

2008)

High Court

Civil / Commercial

93,523

Criminal

4,544

Civil

94,554

Criminal

8,750

Civil

156,053

Criminal

65,221

Sessions Court

Magistrates' Court

INTRODUCTION
The concept of ADR includes processes such as 'mediation,
'conciliation, 'arbitration and adjudication.
These processes are different from each other but they are
'philosophically linked' as they constitute the main processes of ADR.
ADR can be utilised to resolve disputes ranging from family to
communal, political, commercial, industrial and even interstates
disputes without resorting to court system.
It is not intended to substitute the court system but is an alternative to
it.
As an effective dispute resolution mechanism, especially mediation and
arbitration, also helps to reduce the backlog of cases which are the
result of 'litigation'.
Resolving disputes through court system is costly, time consuming
and emotionally devastating.
As Jonathan J Sweet has observed:
The court system has proven to be neither cost effective nor timely in
resolving disputes. Attorneys fees are costly, courts are congested,
criminal matters take priority over civil cases. Delays in reaching trial
are likely to consume years. Finally, when trial is had, verdicts may be
inconsistent with the parties' understanding and unpredictable in
result.

 Thus, the complex court procedures created a multi-dimensional crisis

which prompted the jurists and legal experts to search for an
alternative to litigation.
The search resulted in the discovery of alternate forms, known as
'Alternative Dispute Resolution', or its generic acronym 'ADR'.
The advocates of ADR, which know include members of the Bar and
Bench, believe that ADR processes, particularly mediation, may help
to resolve disputes and may solve the backlog of cases problem.
All sorts of civil disputes can be resolved through the process of
mediation. Thus, mediation, as one of the processes, but not the only
process of ADR gives the disputing parties greater power in
resolving their issues by themselves.
It allows the disputing parties to discuss and to develop creative
solutions to their disputes that are generally not possible in court or
during formal hearing and appeals.

 THE CONCEPT OF ADR

ADR is commonly defined as dispute resolution processes and
techniques that fall outside the court system.
It covers divergent processes ranging from facilitated settlement
negotiations in which disputants are encouraged to negotiate
directly with each other prior to some other legal process.
ADR is a broad concept; which include negotiation, mediation/
conciliation, arbitration/ adjudication.
These are useful tools that can be utilised by the disputants to settle
their disputes quickly, cheaply and consensually without resorting
to court proceedings which is time consuming, expensive, disruptive
and by its very nature tends to drive the parties further apart, often
irreparably weakening their relationships.

SELECTED PROCESSES OF ADR

Negotiation (between 2 parties only)
Negotiation is the fundamental form of ADR. It refers to a bilateral
negotiation between two disputants who are desirous of resolving
their disputes amicably.
The involvement of a third party is not required as the negotiation is
conducted between the disputants only.
As a process of resolving a dispute through discussion, effective
negotiation necessitates the fulfillment of certain preparatory procedures
before the substantial negotiation is conducted by the disputants.
In the negotiation process, identification of issues by the disputants is
important to see whether they can find a common definition of the
situation and whether they have shared interest in solving them.
The identified issues are to be assembled in a comprehensive list to be
used as the agenda of the negotiation.
The preparation for negotiation process also requires the determination
of the location, time and duration of the session as well as the parties
to be involved in the negotiation.
The negotiators may also anticipate what they want to achieve, agree on
principles that will guide the drafting of the resolution of the issues.

Negotiation should be conducted in good faith and with the sole

desire to achieve settlement of the dispute.
The disputants may compromise to achieve the resolution of the
dispute for without compromise it is unlikely to ensure the success of
the negotiation.
Thus, mutual understanding is one of the factors in achieving the
desired result, that is, the solution of the dispute.
Although the parties may bargain, exchange information and may
use some form of influence to get a better deal yet the easy way to
make negotiation fruitful is to try for a negotiated settlement.
So long negotiation result in 'win-win' situation it will achieve its
desired result.
Principled / Cooperative Negotiation v. Competitive Negotiation
The 'win-win' approach to negotiation is the 'principled
negotiations' which is the alternative to the competitive, power
based negotiation process.
The former approach is the preferred one while the latter is not
because it may either cause the collapse of the negotiation or may
result in a 'win-loss situation' where one disputant wins the other
loses.

 The win-win approach to negotiation is also termed as

'cooperative' approach which is the opposite of 'competitive'
approach. A good outcome is ensured from the cooperative
negotiation but not from the competitive negotiation.
The cooperative approach requires the commitment of both
disputants to cooperate rather than compete for if they compete
there would be no outcome but even if there is an outcome it would not
be a fair one.
The disputants may compete with each other to protect their interest
but they should do so with negotiation skills and effective
communication.
No force or the threat thereof should be used to exert influence for
this may result in anger and resentment. The exertion of influence
must be through persuasion.

 To be persuasive, negotiators must formulate a proposal, however

minor, to which the a skilled negotiator with the ability to listen,
communicate clearly and effectively, and knows how to establish
a good working relationship, understand the people and interests
involved as well as the relevant facts is better able to influence the
decisions of others.
Adoption of an extreme position of at the start of the negotiation
even if softened later may not be the most affective tactic.
Negotiation should be started with the spirit of cooperation and
must be focused on maintaining future relationships.
Conducting negotiation with such a spirit would enable the parties to
find a fair solution to their problem and at the same time maintaining
their future relationships.

Mediation ( a third party and two disputants)

Mediation is the most important form of ADR. It is a conflict
resoIution method in which a mediator helps two people negotiate
voluntary solution to their dispute.
Mediation can help to clear the backlog of cases. Its importance has
been felt in Malaysia where even some former and current members of
the judiciary proposed for its advancement in the country.
Even the Attorney-General of Malaysia, Tan Sri Abdul Ghani Patail, has
advocated for the development of mediation as the host form of ADR.
Court annexed mediation is becoming mandatory in Malaysian
Court now. (See Mediation Act 2012)
In some countries, like Singapore, the courts have encouraged
disputants to use court-based mediation at the preliminary stage of
a suits, this in turn has resulted in a successful reduction of backlog of
cases.
Mediation as a form of ADR is in advance position in so many countries.
Malaysia too is taking steps towards the advancement of this important
concept.
Malaysia needs mediation as a process of resolving disputes in the
same was as other countries. This is because the backlog of cases in
Malaysia is serious. Mediation is rooted in Islam and other religions in
Malaysia.

 As Dato Cecil Abraham has observed:

The fundamentals of mediation, that is, the encouragement of
settlement by the assistance of a third party, has been a
practice of the East for centuries and the roots can be traced
back to the teachings of Islam, Hinduism, Buddhism,
Christianity and the teachings of Confucius. Malaysia, a
country with multitude of faiths and religions has been a host
for the practice of mediation amongst its recipients. In Islam,
mediation is an indispensable condition and is represented by
the word [Wasaata] whilst in Hinduism; the mediation
process is reflective in the text of its scriptures as well as in the
concept of the panchayat. So great was the emphasis of
harmony and the resolution of dispute in an amicable manner
to Confucius that a proverb was couched to express his
dissatisfaction to the adversarial process 'in death avoid hell, in
life avoid law courts.

The best way to avoid litigation is to settle disputes out of court,

preferably through the process of 'mediation'.
To promote mediation as a means of alternative dispute resolution
and to provide a proper avenue for successful dispute resolution the
Bar Council of Malaysia, on 5 November 1999, established the
Malaysian Mediation Centre (MMC).
The MMC offers mediation services to disputants who are willing
settle their disputes. When one party is desirous of using mediation to
resolve their disputes, the MMC assists that party by writing to the
opposing party to enquire as to whether they would want to resolve the
dispute by mediation. If the reply is a no, then MMC writes back to the
party who has requested for mediation and informs them accordingly.
The MMC provides mediation training for those interested in
becoming mediators and accredits and maintains a panel of
mediators. The MMC mediators are subject to a code of conduct
which provides for a strict compliance of impartiality and
confidentiality. Not everyone can be a mediator at the MMC.
To be qualified as a mediator at the MMC a person must be a member
of the Malaysian Bar and must have completed at least 40 hours of
training conducted and organised by the Centre and must also pass
a practical assessment conducted by the trainers.

Definition of Mediation
Mediation is commonly defined as a process of settling disputes
settling in which a third party oversees the negotiation between two
parties but does not impose an agreement.
It is a process in which 'disputing parties engage the assistance of an
impartial third party, the mediator, who helps them to try to arrive at an
agreed resolution of their dispute.
The mediator has no authority to make any decisions that are
binding on them, but uses certain procedures, techniques and
skills to help them to negotiate an agreed resolution of their
dispute without adjudication.

 Types of Mediation
There are three types of mediation, viz, facilitative, evaluative and
transformative mediations.
The mediator s role is simply to facilitate the process and try to
bring parties to some kind of resolution.
Facilitative Mediation
In facilitative mediation, the function of the mediator is to structure
a process to help the disputants to reach a mutually agreeable
settlement.
In this structured process, the mediator asks questions; validates
and normalises parties' points of view; searches for interests
underneath the positions taken by parties; and assists the
parties in finding and analysing options for resolution.

 In this type of mediation, the mediator is merely in charge of the

process while the parties are in charge of the outcome.
In other words disputants enjoy self-determination, that is, they are
in control of resolving their own dispute, but they do so with the help of
a neutral facilitative mediator.
'Self-determination commits the parties to their settlement terms
because they have made decisions by themselves instead of having
a resolution imposed on them by a third party.
In a facilitative mediation, the mediator neither makes
recommendations to the disputants nor gives advice to them.
It is inappropriate for the mediator to give his opinion, for at least
two reasons.
First, such opinions might impair the appearance of impartiality and
thereby interfere with the mediator's ability to function.

 Second, the mediator might not know enough about the details of the
case or the relevant law, practices or technology to give an informed
opinion .
A facilitative mediator assumes that the parties are intelligent, able
to work with their counterparts, and capable of understanding
their situations better than the mediator and, perhaps, better than
their lawyers. Accordingly, the parties can develop better solutions .
The main task of a facilitative mediator is therefore to clarify and to
enhance communication between the parties in order to help them
decide on a mutually agreeable settlement
Evaluative Mediation
In 'evaluative' mediation, the mediator studies the strengths and
weaknesses of the disputants' positions and makes suggestions for
resolving the dispute.
The mediator controls the process, conduct individual meetings
with one disputing party at a time (called 'caucuses') and through
a 'shuttle diplomacy' helps the parties to evaluate their positions.
The evaluative mediator structures the process and directly
influences the outcome of mediation.

 The mediator provide some guidance as to the appropriate

grounds for settlement based on law, industry practice or
provide guidance by virtue of his or her training, experience,
and objectivity.
Transformative Mediation
This is the newest concept mediation in which the mediator usually
seeks to instill mutual recognition and empowerment between
the disputing parties.
Generally, 'recognition' is considered to be an important part of
transformative mediation, so that disputants can understand each
other's needs, interests, values, points of views and enables one
disputant to appreciate how the other one defines the problem.

 Transformative mediator meets with disputants and usually

leads each party to understand the outcomes that are wanted
by the other party.
In this way, both parties can approach the problem with more
informed points of points of view.
In transformative mediation, the mediator 'consciously try to
avoid shaping issues, proposals or terms of settlement, or even
pushing for the achievement at all.
Mediators encourage parties to define the problems and find
solutions for themselves and they endorse and support the
parties own efforts to do so.

 Elements of Mediation
Mediation, whether facilitative, evaluative or transformative, involves the
following elements:
(a) agreement to mediate;
(b) presence of disputants;
(b) the involvement of a neutral third party (mediator);
(c) finding 'options' which are mutually acceptable by the
disputants;
(d) holding joint and caucus (private) meetings and
(e) mediated settlement to be signed by the parties to make the
contract enforceable.
The first, and the most important, element of mediation is agreement to
mediate and the presence of disputants. The presence of the
disputants is crucial for without their involvement the need for
mediation does not arise. However, mere presence of the disputants is
not enough.

 The disputants must have identifiable and conflicting point of

dispute that requires a solution through mediation.
Reaching solution to the disputes would , however, be remote
possibility if the disputants are not willing to act in good faith . The
principle of good faith requires that the disputants to act
reasonably and work with the help of an impartial third party
facilitator or mediator, towards a resolution of their dispute.
The involvement of a neutral third party known as the mediator is
the second element of mediation. The mediator must be
acceptable by the disputing parties and consequently enjoy
their confidence.
Having been accepted by both parties, the mediator is responsible
to help the disputing parties to reach a complete understanding
of the dispute. The mediator must be committed to assisting the
parties to work their way through the process of negotiation by
facilitating and enhancing their communication with one another.
To achieve this, the mediator may perform a variety of roles:
the opener of communication channels, who initiates
communication or facilitates better communication if the parties
are already talking;
the legitimiser, who helps all parties recognise the right of
others to be involved in negotiations;

 the process facilitator, who provides a procedure and often

formally chairs the negotiation session;
the trainer, who educates novice, unskilled, or unprepared
negotiators in the bargaining process;
the resource expander, who provides procedural assistance to
the parties and links them to outside experts and resources (for
example, lawyers, technical experts, decision makers, or additional
goods for exchange) that may enable them to enlarge acceptable
settlement options;
the problem explorer, who enables people in dispute to examine
a problem from a variety of viewpoints, assists in defining basic
issues and interests, and looks for mutually satisfactory options;

 the agent of reality, who helps build a reasonable and

implementable settlement and questions and challenges
parties who have extreme and unrealistic goals;
the scapegoat, who may take some of the responsibility or
blame for an unpopular decision that the parties are
nevertheless willing to accept. This enables them to maintain
their integrity and, when appropriate, gain the support of their
constituents;
the leader, who takes the initiative to move the negotiations
forward by procedural or on occasion, substantive suggestions.
The mediator may play these roles in whatever style of
mediation he is engaged in, facilitative, evaluative or
transformative mediation.
He may also play these roles in meetings with the parties
together in joint session, and in meetings in 'caucus' with one
party separately from the other(s).
The mediator has to be 'sufficiently flexible to employ the
most appropriate orientation, strategies, and techniques as
the participants' needs present themselves.

 The mediator must aid the parties in a neutral fashion to help them
find solution to their dispute. He or she has to be neutral and
impartial.
Impartiality means freedom from favouritism, bias or prejudice.
The mediator, as a resource expander, provides procedural
assistance to the parties and helps them to enlarge acceptable
settlement options.
Finding a mutually acceptable settlement 'option' for the
disputants is the third element of mediation. To find options which are
acceptable by disputing parties, the mediator needs to understand
their points of view concerning the issues underlying circumstances,
facts, positions, appraisals, etc.
Mediation Process
In mediation process two sessions may be involved: The joint
session (or joint meeting) and 'caucus meeting'.
In the joint session both parties are present with the mediator
and each hears what the other says.
In the caucus meeting the mediator meets the parties separately.
Holding caucus meeting is the fourth element of mediation.

 A 'caucus' is a private meeting between the mediator and one

party. The mediator may hold such a meeting when the parties need
to cool off and refocus or when confidential information needs to be
discussed in a protected setting, when options for settlement need to
be explored in a secure setting.
In caucuses meetings, the mediator may explore a party's
motivations and expectations, provide education and coaching
with respect to the negotiation process, act as a sounding board,
engage in reality check and assist in identifying options that
might be brought to the bargaining table . He or she may also test
the acceptability of proposals that he or she has generated or of
proposal generated by the opposite party in caucus but presented as
the mediators own. The mediator may encourage a party to share
with him his or he confidential information .
However, the parties will be reluctant to do this without the assurance
that the mediator is both willing and able to maintain the desired
'confidentiality'. The mediator must meet the reasonable
expectations of the parties with regard to confidentiality.

 Whatever is discussed in caucus with one party must not be

disclosed to the party either in joint session or in the caucus
unless the mediator is explicitly allowed to do so by the former.
If there are statutory, judicial or ethical limitations of
confidentiality, the mediator must inform the parties about such
limitations. If there are also situations where the mediator may be
compelled to testify in court, the mediator must also inform the
parties about such circumstances.
In caucus, the mediator has an opportunity to cultivate a
relationship of trust and confidence with each party.
The mediator must not betray the trust and must maintain
impartiality. In holding joint meetings or causes with each side the
mediator just tries to learn the view points of the disputants, obtain a
candid discussion of the issues, gain certain arrow the issues and
each party's positions, and deflate extreme demands; gauge the
receptiveness for a proposal or suggestion; explore alternatives and
search for solutions; identify what is important and what is
expendable; prevent regression or raising of surprise issues; and
structure a settlement of the dispute that is acceptable to both
parties.

 The joint meetings or causes with each side should be

conducted in a site or a place where neutrality can be
maintained and confidentiality preserved.
Keeping mediation proceedings confidential is crucial in the sense
that it gives the parties some quiet and uninterrupted times to
contemplate over the issues and tries to find a common ground in
order to resolve the dispute. It may also deny media speculation and
prevent self-centred third parties who benefit from the dispute to
cause obstacles in the mediation proceeding.
The mediator should therefore carefully guard the
confidentiality of the mediation proceeding. However, if the
disputing parties wish to disclose the proceedings the mediator
cannot do anything about it. Though it would be better, for the
reasons mentioned earlier, the parties too should ensure the
protection of the confidentiality of the mediation proceeding.
The seating arrangement is also important but there is no
established rule on this. Nevertheless according to most literature, a
round table seating is the most suitable and not a square or
rectangular table.

 This seating arrangement may enable the disputants to establish

direct eye contact as their dialogue develops. The mediator sits at
the end of the table. This seating arrangement, though generally agreed
to be effective, cannot be imposed on the parties. Whichever sitting
arrangement is adopted by the parties the mediator must facilitate them
to voluntarily reach their own agreement.
In the mediation process including the joint meetings or causes with
each disputant, the mediator must demonstrate patience, insight,
and psychological fitness to convince parties to modify their
entrenched positions and to reach to a mutually acceptable
settlement agreement, preferably an enforceable written
'agreement' - an agreement that is signed by the disputants and
the mediator which can be enforced as a contract in a court of law.
If a fair and mutually acceptable settlement agreement is
concluded then the mediation process will successfully end.

 The parties must abide by the mediated agreement which they

themselves through their free consent concluded for otherwise
the aggrieved party may take steps towards the formal
enforcement of the agreement.
The application mediation can be used to settle divergent disputes
including commercial and industrial disputes, employer and
employee disputes, landlord and tenant disputes, divorce and other
family disputes, neighbour and community disputes, political
disputes, interstates disputes and other types of public and private
disputes.
Benefits of Mediation
Mediation has many benefits. Compared to law suits, mediation is
affordable. Hiring an attorney can cost thousands of Ringgits
for even a small case, with no guarantee of proper resolution.

 Mediation provides an affordable alternative to costly litigation.

Lawsuits can take years off the disputants' life in wasted time,
frustration, money, and emotional pain.
Mediation usually prompt, takes only a fraction of the time that the
legal system takes. Compared with litigation which is open to the
public, mediation is private and confidential and this means the
disputants can resolve their dispute with privacy and dignity.
Unlike litigation, mediation is empowering and non-adversarial.
Litigation focuses on assigning blame and punishment while
mediation does not assign blame or punishment. Mediation seeks to
invent solution to a mutual problem through cooperative problemsolving.
Unlike litigation which is emotionally devastating (as the parties
may be instructed not to talk to each other to voice their concern),
mediation is emotionally healthy.
The mediation process allows the parties to meet each other,
mutually understanding each other, promote emotional healing,
and preserve ongoing relationships between them.

 The success of mediation depends on the willingness of the

parties to work together in good faith and the ability of the
mediator to properly manage the mediation process. While the
parties have ultimate control over their participation in the process,
the mediators' management of the discussion makes it more
structured.
The mediator must demonstrate patience, insight, and
psychological fitness to convince parties to modify their
entrenched positions and to reach to a mutually acceptable
settlement agreement, preferably an enforceable written
'agreement' that enforce as a contract in a court of law.
Thus, mediation as a consensual process of settling disputes
through a neutral mediator is the best form of ADR that can help
disputants to settle their disputes promptly, cost effectively,
privately and confidentially.

Trends in Mediation in Malaysia

KLRCA
MMC (Bar Council)
Malaysian Chartered institute of Arbitration
Financial Mediation Bureau (FMB)
Biro Bantuan Guaman (BBG)
Industrial Court
Court -Annexed Mediation

 MEDIATION ACT 2012

MEDIATION has long been embraced in Malaysia as a form of alternative
dispute resolution (ADR). Several professional institutions such as the
Malaysian Mediation Centre and the Chartered Institute of Arbitrators
provide mediation services using their respective codes of ethics and
rules.
The Mediation Act 2012 (Act) was recently introduced by Parliament, and
came into force on Aug 1, 2012 with the aim of promoting and
encouraging mediation as a method of ADR and to facilitate the
settlement of disputes in a fair, speedy and cost-effective manner.

 The Act

"Mediation" is defined under the Act to mean a voluntary process in

which a mediator facilitates communication and negotiation between
parties to assist them in reaching an agreement.
The Act does not apply to: (1) mediation conducted by courts; (2)
mediation conducted by the Legal Aid Department; and (3) matters
expressly excluded in its schedule (such as proceedings on the Federal
Constitution, the remedy of temporary or permanent injunctions, and
any criminal matter).
The Act does not oblige parties to mediate before litigation or
arbitration.
Also, parties may choose to mediate simultaneously with any civil court
action or arbitration.
Where proceedings have already commenced, mediation does not act as
a stay or extension of proceedings.

 Steps to commence mediation

First, a person may initiate mediation by sending to the other party a
written invitation to mediate, specifying the matters in dispute.
The Act sets out how an invitation will be deemed accepted or rejected by
the other party.
Upon commencement of mediation, parties must enter into a written
mediation agreement, which: (1) contains an agreement to mediate; and
(2) deals with matters such as the appointment of a mediator and costs.

 The mediator
Only a person who: (1) possesses the relevant qualifications, knowledge
or experience in mediation through training or formal tertiary education;
or (2) satisfies the requirements of an organisation which provides
mediation services, can be appointed as a mediator under the Act.
A mediator is required to disclose, before accepting the appointment, any
known facts that a reasonable person would consider likely to affect his
impartiality as mediator in the outcome of the mediation.

A mediator must act independently and impartially, with a view to

assisting the parties to reach a satisfactory resolution of the dispute and
suggest options for the settlement of the dispute.
A mediator will not be liable for any act or omission in the discharge of
his functions as a mediator unless the act or omission is proved to have
been fraudulent or involves wilful misconduct.

 Confidentiality
A mediation is conducted privately.
In the same vein, the Act also prohibits the disclosure of any
oral or written statement made during or in relation to a
mediation, subject to some exceptions.
This essentially provides a significant boost for mediation in
addressing the issue of confidentiality; one of the primary concerns
of litigants in a mediation process.

Settlement agreement
Upon the conclusion of a mediation and the reaching of an
agreement, the parties must enter into a binding settlement
agreement.
If proceedings have been commenced in court, the settlement
agreement may be recorded before the court as a consent
judgment or judgment of the court.

 KLRCA MEDIATION RULES (Revised 2013)

Application of the Rules

Commencement of Mediation Proceedings
Appointment of the Mediator
Role of the Mediator
Role of the Parties
Authority and Representation
Confidentiality
Proceedings
Termination of the Mediation
Costs
Administrative Assistance
Exclusion of Liability
Role of Mediator in Other Proceedings
Schedule of Fees

KLRCA MEDIATION RULES (Revised 2013)

The KLRCA Mediation Rules are a set of procedural rules
covering all aspects of the Mediation process to help parties
resolve their domestic or international disputes.
With the all new Mediation Rules, KLRCA aim to promote
mediation as a viable commercial option for parties in
Malaysia and abroad as interest-based mediated negotiations
can result in settlements that are more satisfactory to all
parties than simple compromise decisions. The streamlined
new rules ensures that the mediation process addresses all
parties' interests which in turn will preserve the working
relationship of parties and ensure those who negotiate their
own settlements have more control over the outcome of their
dispute.

 Application of the Rules

These rules apply to any Mediation of any present or future
dispute where the parties have agreed that the KLRCA
Mediation Rules (the Rules) will apply.
Where any of the Rules is in conflict with the provision of law
from which the parties cannot derogate, that provision prevails.

Commencement of Mediation Proceedings

Any party/parties wishing to commence Mediation
proceedings pursuant to the Rules shall give to KLRCA a
written Request for Mediation which shall contain the
following: The names, addresses (including e-mail addresses), telephone
numbers of the parties and any legal or other representatives
involved;
A reference to any Mediation clause or a copy of the separate
Mediation agreement, if any;
A reference to the contract (if any) or other legal relationship (if
any) out of or in relation to which the dispute arises;

 Upon receipt of a written Request for Mediation under Rule 3,

KLRCA shall send a copy of the Request for Mediation to the
other party/ parties named.
The Mediation process shall be deemed to have commenced
when KLRCA receives written notice of the other
partys/parties acceptance of the Request.
If the other party/parties reject(s) the Request or if KLRCA
does not receive a reply within 30 days from the date of
KLRCAs written notice of the Request under Rule 4, KLRCA
may elect to treat this as a rejection of the Request and
inform the party/ parties initiating the Mediation accordingly.

 Appointment of the Mediator

Where all parties have agreed upon a proposed Mediator, who is willing to
serve and is not disqualified under Rule 10, the parties will jointly appoint
that person as the Mediator.
If, within 30 days of the Request for Mediation under Rule 4, all parties
have not agreed upon a proposed Mediator willing to serve and not
disqualified under Rule 10, then the Director of KLRCA shall appoint the
Mediator and the parties are deemed to have approved the appointment
made by the Director of KLRCA.
There shall be one Mediator unless the parties otherwise agree.
No person may act as a Mediator in any dispute in which that person has
any financial or personal interest or any conflict of interest likely to affect
or which might reasonably be perceived to affect the Mediators
independence or ability to act impartially at all times, save where the
parties have been notified in writing of such circumstances and have
subsequently expressly consented in writing to the appointment of a
Mediator.

 If, following appointment, a Mediator becomes aware of any

circumstances that may create a reasonable perception of
bias, partiality or lack of neutrality, the Mediator shall
immediately so inform the parties and, where the Mediator
was appointed by KLRCA, shall immediately inform KLRCA. If
any party objects to the continued service of the Mediator,
the Mediator shall be disqualified. In this event, the parties
will have a further 30 days from disqualification of the
Mediator to appoint a new Mediator. In the event that the
parties do not within such 30-day period agree upon a
substitute proposed Mediator willing to serve and not
disqualified under Rule 10, then the Director of KLRCA shall
appoint the Mediator and the parties are deemed to have
approved the appointment made by the Director of KLRCA.

 Role of the Mediator

The Mediator shall assist the parties in an independent and impartial
manner to reach an amicable settlement of the dispute.
The Mediator may conduct the Mediation in such manner as the Mediator
considers appropriate, having regard to the circumstances of the dispute,
the wishes of the parties and any practical considerations which might be
relevant for the satisfactory and prompt resolution of the dispute.
Prior to or during the Mediation, the Mediator may communicate with the
parties together, or with any party separately, with or without its
representatives, either in person, by telephone, videoconference or
electronically as the Mediator sees fit.
The parties may be required by the Mediator to participate in a
preliminary conference prior to the commencement of the formal
Mediation. The purpose of the preliminary conference is to enable the
parties, with the assistance of the Mediator, to: Discuss and agree upon issues in dispute or formulate a process by which
those issues are to be clarified and agreed;
Make provision for, in accordance with the Mediators directions, the service
and exchange of documentary material relevant to the Mediation including
position papers by all parties;
Make provision for such other planning and administrative arrangements as
are necessary and appropriate to enable the Mediation to proceed.

Role of the Parties

Each party to the Mediation has a duty to participate in good faith in the
Mediation. Each party and their representatives will use their best endeavours to
co-operate with each other and with the Mediator to settle their differences.
Authority and Representation
Each party to a Mediation may be assisted or represented by any person it chooses
(including legal advisers). The identity, contact details and roles of any such
persons must be disclosed to all parties and to the Mediator.
Each party to the Mediation must have authority to settle a dispute or be
represented by a person or persons having full authority to settle the dispute. In
the event that any such authority is limited, the limits of authority must be
disclosed to the parties and the Mediator.

 Confidentiality
All mediation proceedings shall be private and confidential. All
parties and participants in the Mediation shall execute a written
undertaking in the form of the Confidentiality Undertaking as
provided for in Schedule A to give effect to this requirement.
Any information given to the Mediator by a party in caucus or
private session shall be kept confidential as between the party
furnishing the information and the Mediator unless the party
providing the information consents to its disclosure to any other
party to the Mediation.
The Mediator, all parties and participants in the Mediation must
keep all matters relating to or arising out of the Mediation private
and confidential except: Where disclosure is compelled by law;
If necessary to give effect to a Mediation agreement or to enforce an
agreement reached to settle or resolve the whole or any part of the
dispute;
With the consent of the parties to the Mediation.

 Proceedings
Unless parties agreed otherwise, the Mediation proceedings shall
be held in the KLRCA premises.
The parties will be notified of the time and venue of the Mediation
proceedings which shall be subject to the parties agreement.
The parties shall ensure that they have all necessary additional
services where required for the Mediation.
Termination of the Mediation
The Mediator may suspend or terminate the Mediation or withdraw
as Mediator when he or she reasonably believes the circumstances
require it, including when he or she has reasonable grounds to
suspect that: The parties are involved in illegal/fraudulent conduct; or
The parties are unable to participate meaningfully and reasonably in
negotiations; or
Continuation of the Mediation process would cause significant harm
to any party or a third party.

 When the Mediator determines that it is necessary to suspend or

terminate a Mediation or to withdraw, the Mediator must do so
without violating the obligation of confidentiality and in a manner
that will cause the least possible harm to the parties.
The Mediator shall promptly inform the Director of KLRCA of the
termination.
In addition to termination occurring under Rule 25, the Mediation
shall be deemed to be terminated upon: Upon the signing by the parties of a written settlement agreement;
A written declaration of the Mediator, after consultation with the
parties, to the effect that further attempts at Mediation are no longer
justified;
A written declaration by any of the parties addressed to the Mediator
to the effect that the Mediation is hereby terminated; or
Expiry of 3 months from the date of the Request for Mediation under
Rule 4 unless agreed otherwise by the parties; or
By order of the Director of KLRCA in the event that any monies
properly payable under Rule 30 are not paid as required by these
Rules.

 Costs
Unless otherwise agreed or ordered by a court or arbitrator, each party
shall bear its own costs of the Mediation.
The costs and expenses of the Mediation shall include but are not limited
to: The professional fees of the Mediator;
The cost of the venue hire, including meeting rooms, breakout rooms, meals,
translation fees, photocopying fees, internet access, telephone and
communication expenses, administrative costs incurred under Rule 30(d), and
any other costs reasonably and properly incurred in respect of the
organisation or conduct of the Mediation;
Any fees or costs set out above in respect of expert advice or expert witnesses
who attend or provide such advice with the consent of the parties;
The proper administrative charges of KLRCA relating to the conduct of the
Mediation fixed in accordance with this Rule. Without limiting the foregoing,
the costs of KLRCA may include: The Registration Fees;
Appointment Fee and
Any Administrative Costs.

The parties are jointly and severally liable for costs and expenses set out in
Rule 30 above.

 Administrative Assistance
Subject to Rule 24 above, the Director of KLRCA may arrange for
translators, administrative assistance, and/or other facilities in order to
facilitate the Mediation at the request of the Mediator or the parties.
Exclusion of Liability
Except in the case of fraud on the part of KLRCA or the person claiming
immunity or protection from suit under this rule, neither KLRCA nor the
Mediator shall be liable to any party or to any other participant in the
Mediation for any act or omission in relation to or arising out of the
Mediation conducted under these rules or in respect of or arising out of
any settlement reached in any Mediation conducted under these rules.
All statements whether written or oral made in the course of the
Mediation shall not be relied upon to institute or maintain any action for
defamation, libel, slander or any related complaint.

 Role of Mediator in Other Proceedings

The Mediator shall not, without the consent of the parties, act
as an arbitrator or as a representative or counsel of a party or
appear as a witness in any arbitral or judicial proceedings or
give advice to any person whatsoever in respect of a dispute
that is the subject of the Mediation.
The parties and the Mediator agree that they will not present
the Mediator as a witness in any such proceedings, nor will
they subpoena or endeavour to compel the Mediator to give
evidence or to produce documents in any subsequent judicial
proceedings or arbitration.

 Schedule of Fees
Parties are free to agree with the Mediator on the Mediators Fees. Unless
otherwise agreed, the Schedule of Fees shall apply.
The Schedule of Fees provides the fee scale for international and domestic
Mediation.
An international Mediation means a Mediation where
One of the parties to the Mediation has its place of business in any
State other than Malaysia;
Any place where a substantial part of the obligations of any
commercial or other relationship is to be performed or the place
with which the subject matter of the dispute is most closely
connected is in any state other than Malaysia; or
The parties have expressly agreed that the subject matter of the
Mediation relates to more than one State.
A domestic Mediation is any Mediation which is not an
international Mediation.

 Prior to the commencement of the Mediation, each party

shall pay the Registration Fees, Appointment Fee (if any) and
deposit the Mediators Fees and Administration Costs with
the KLRCA in accordance with the Schedule of Fees annexed
hereto.
At any time during the course of the Mediation the Director of
KLRCA may require additional deposits to be paid by the
parties on account of the costs and expenses referred to in
Rule 30. Any additional such sums requested by the Director
of KLRCA on account of the costs and expenses referred to in
Rule 30 shall be payable 15 days after the receipt of the
request for additional deposits.

 If any of the monies referred to in Rules 29 and 30 are not paid in full by
both parties within 15 days after the receipt of the Request, the Director
of KLRCA shall so inform the parties in order that one or another of them
may make the required payment.
If any such payment is not made, the Mediator, after consultation with the
Director of KLRCA, may order the suspension or termination of the
Mediation.
The Director of KLRCA may apply the deposit towards the fees and
disbursements incurred by KLRCA and the Mediator for the Mediation.
Upon termination of the Mediation, the Director of KLRCA shall render an
account to the parties of the deposit received and used and return any
unexpended balance to the parties.
The End