Arb-med process
Arb-med combines the benefits of arbitration and mediation to resolve disputes. The aim of arb-med is to promote informed, good-faith negotiations to settle disputes. This is done by using the arbitral tribunal’s efficient information-gathering and fact-finding powers during the initial arbitration phase to aid the subsequent mediation.
Key benefits include fast resolution, flexible procedures, a confidential process, parties select the decision-maker, easy access to the decision-maker, continuous process – if mediation fails, arbitration promptly resumes, and a final and binding outcome that is enforceable in court.
Process Overview
Starting the process
The parties need to agree to engage in arb-med. They can do this before or after the dispute has arisen.
Appointment of an arbitral tribunal
An arbitral tribunal will typically be appointed within 3 Working Days, or sooner for urgent cases.
Directions conference for mediation
The directions conference is intended to promote the efficient conduct of the process.
Submission of case
Each party will submit a written statement outlining the facts, evidence, and legal arguments.
Mediation
In mediation, the mediator will work with the parties to identify the issues, understand the conflict, and facilitate discussions towards a mutually acceptable resolution.
Award on agreed terms (if settled)
If the parties manage to settle their dispute amicably during the arbitration, the arbitrator may record the settlement in the form of an arbitral award.
Directions conference for arbitration (if not settled)
This further directions conference is intended to promote the efficient conduct of the further arbitration process if the dispute is not resolved in mediation.
Hearing
There may be a formal hearing, although it is also common for arbitrations to be conducted on the papers.
Award
After the arbitral tribunal has received all the information it needs, the tribunal will make its award which will be binding on the parties.
Cost of arb-med
Our focus is on delivering cost-proportionate process solutions. Find out more about the cost of arb-med.
Step 1. Starting the process
To begin, both parties must agree to use arb-med. They can do this by including the New Zealand Dispute Resolution Centre (NZDRC) model arb-med clause in their contract. This allows any future disagreements or disputes to be settled using arb-med.
Even if they didn’t include the clause in their contract, they can still use arbitration by signing an arb-med agreement after a dispute arises.
If the parties agreed to arb-med before the dispute occurred, the person wanting to initiate the process (called the claimant) needs to send a Notice of Arb-Med to inform the other side (the respondent) that they want the dispute resolved by arb-med.
Step 2. Appointment of an abritral tribunal
The New Zealand Dispute Resolution Centre (NZDRC) is responsible for appointing an arbitral tribunal unless the parties involved have agreed on who they wish to appoint. The arbitral tribunal will usually consist of one arbitrator. However, in some cases, a three-person arbitral tribunal will be appointed. Any appointment is made once NZDRC receives a completed application and payment. If the parties have someone in mind, that person must meet certain criteria, and NZDRC has to agree that they are suitable, independent, and impartial.
When selecting an arbitrator, NZDRC considers various factors, such as any agreements between the parties, the nature and value of the dispute, and the availability of the person to effectively determine the case. The appointed expert must be neutral and can’t act as an advocate for any party. Any appointment made by NZDRC is final and confirmed by a Notice of Appointment issued by the Registrar.
NB: The terms arbitrator and arbitral tribunal are used interchangeably.
Step 3. Directions conference for mediation
Step 4. Submission of case
In advance of the mediation, each party will prepare and send their case submission to the arbitral tribunal and all other parties. The form of this submission can be varied, but it should include all relevant supporting documents and evidential material.
The case submission should clearly outline the nature and basis of the dispute, the factual and legal issues involved, the party’s stance on these issues, and the relief or remedy sought. If a contract is involved, a copy or relevant sections of it should be included. Lastly, the submission should include any statements, reports, documents, or other evidential material that the party relies on to support its contentions.
Typically, the process for exchange will consist of:
- The claimant(s) serving their claim;
- The respondent(s) serving their defence; and
- The claimant(s) serving any reply.
Step 5. Mediation
The mediation will be conducted by the arbitrator (or presiding arbitrator where there is a three-person arbitral tribunal) taking on the role of a mediator, transitioning from an adjudicative role to a facilitative one.
This dual role enables the mediator to have a good understanding of the dispute, the positions of the parties, and the key issues, since they have been privy to the arbitration process.
During the mediation process, the mediator facilitates communication between the parties, helping them articulate their needs, understand each other’s positions, and explore potential solutions. The mediator does not impose a decision but instead encourages the parties to find a mutually acceptable resolution to their dispute. In this process, the mediator uses the information gathered during the arbitration phase to guide the discussions, ensuring that they are based on facts and that all relevant issues are addressed.
An arbitrator acting as mediator in an arb-med process may not communicate with the parties separately (also known as caucusing). This is to ensure complete transparency in the case where a dispute does not settle in the mediation phase and needs to move back into arbitration.
Step 6. Award on agreed terms (if settled)
If the mediation is successful, the parties will reach a settlement agreement. This agreement may be recorded as an Award on Agreed Terms by the arbitrator. This award is binding and enforceable, similar to a standard arbitral award. However, if the parties are unable to reach a settlement during the mediation, the process returns to arbitration, and the arbitrator makes a binding decision based on the information gathered during the arbitration phase.
Step 7. Directions conference for arbitration (if not settled)
The arbitral tribunal will convene a further directions conference following the mediation where the dispute has not been resolved.
The purpose of this conference is to discuss timetabling and procedural matters for arbitration. This proactive case management step is designed to ensure everyone knows what is going to happen and when, and to promote the efficient conduct of the process.
Step 8. Hearing
Once the parties have exchanged all relevant documents, and unless the parties have agreed to proceed on the documents (ie the arbitral tribunal makes its decision based on the information submitted without any hearing), a formal hearing will be scheduled.
In most cases, the parties may make a short opening statement before any witnesses are cross-examined. In almost every case, witness evidence is taken as read which means there is no need for the witness to orally present their evidence-in-chief. Rather, the hearing will be used to cross-examine the witness on the evidence as set out in their witness statement. The arbitral tribunal may also ask questions of any of the witnesses.
Closing submissions may be given at the conclusion of the hearing, typically in writing subsequent to the hearing date itself.
Step 9. Award
The arbitral tribunal is tasked with providing an award determining each of the disputed matters that have been referred to it. This follows a thorough review of submissions, documents, or evidentiary material provided by the parties, any information disclosed during the course of a hearing, and any additional information requested by the tribunal. This award is delivered in writing and includes an explanation of the reasons it is based upon, unless the parties agree otherwise.
An award is legally binding and enforceable for both parties.
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