NEWS

Home » News »

Mediation as a method for contract negotiation during the pandemic

Mediation as a method for contract negotiation during the pandemic

7/31/2020

 

COVID-19 is already recognized as a complicating element for the regular fulfillment of contracts. As the effects of the pandemic are different in each legal relationship (or economic sector), the alternatives for resolving deadlocks in the current context must be analyzed on a case-by-case basis. One of the situations that deserves to be highlighted is the need to renegotiate signed contracts, with the objective of maintaining the mandatory bond and mitigating losses between the parties.

In this context, mediation becomes a potentially successful way to enable the renegotiation of contracts. Unlike other litigious procedures, in mediation the parties seek to align expectations to build a friendly solution to the conflict.

With a non-litigious dialogue and the help of a mediator, it is possible to create a more favorable environment for the renegotiation of contracts, reestablishing what the parties intended at the time of its conclusion and reconciling their interests in the new economic context in which they are located.

To achieve these objectives, the use of online conflict resolution platforms has been satisfactory. Upon agreement by the parties, these tools are already authorized by Article 46 of the Mediation Law (Law n. 13.140/15).

Mediation has also been encouraged by the Judiciary. The São Paulo State Court of Justice (TJSP), for example, launched a pilot project for pre-procedural conciliation and mediation for business disputes arising from the effects of COVID-19. This project is aimed at entrepreneurs and business companies, as well as other economic agents involved in the production and circulation of goods and services.

According to the text, mediation requests must be sent to a specific e-mail, containing the request and cause for the request related to the pandemic. Then, a conciliation meeting will be scheduled and, if this is unsuccessful, a mediation procedure will be initiated (the mediator may be chosen by the parties or appointed by the magistrate).

In this program, all meetings will be held online and the agreement reached by the parties will be approved by the judge, constituting a judicial enforcement order. This project will work up to 120 after the closure of the “Remote Work System” of the TJSP. Currently, the TJSP is in the phase of gradually returning to face-to-face work.

In addition, some chambers and mediation centers have developed resolutions and guidelines on the virtual conduct of mediation procedures, including regulating the holding of virtual meetings, such as the International Court of Arbitration of the International Chamber of Commerce (CCI), the Center of Arbitration and Mediation of the Brazil-Canada Chamber of Commerce (CAM-CCBC), the CIESP-FIESP Conciliation, Mediation and Arbitration Chamber (CCMA-CIESP-FIESP), the AMCHAM Brazil Arbitration and Mediation Center (CAM-AMCHAM) and also the Business Mediation and Arbitration Chamber (CAMARB).

As an example, the guidelines created by CAM-CCBC includes some information about: (i) people who should have access to virtual mediation rooms, (ii) tests on virtual platforms, (iii) information and documents available for holding the meetings and during the meetings, (iv) locating and dressing the people who will join the meetings, (v) inability for the participants to record the meetings, (vi) format for holding individual meetings, and (vii) equipment needed to use the platforms.

In addition to this valuable institutional support, there is also the alternative of ad hoc mediations, that is, without the assistance of mediation chambers, whose main attraction is cost reduction. In this case, it will be up to the parties and the mediator to take the necessary measures to ensure that the procedure takes place effectively and safely.

In an atypical moment like this, in which the maintenance of commercial relations and the reduction of costs are sought, mediation is launched as an important contractual renegotiation tool, whose legal framework provides the necessary legal security for the parties to use it as a means to preserve your business.

Our firm is aligned with these trends and, since the beginning of the COVID-19 pandemic, it has been acting in totally virtual mediations, accumulating experiences and assisting clients in the best solution for their interests.

 

Coauthors: Thabata Silva Rodrigues, Eduardo Padilha Inácio and Ingrid Porphirio de Santi

Related Posts