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Saturday Dec 14, 2024
Friday, 22 August 2014 00:01 - - {{hitsCtrl.values.hits}}
The main aim of the Companies Disputes Board is to provide for a method of settlement of inter parte disputes by way of mediation as it is relatively swift and inexpensive in comparison to court trial. Mediators appointed by the Board will be ready and willing to assist parties to try to settle a matter and sessions can be easily scheduled at the mutual convenience of the parties.
The mediation procedure is relatively simple and there are no complex procedural or evidentiary rules which must be followed. The mediation will allow the parties to revise and adjust the scope of their conflict, and increased flexibility makes it easier for negotiators to act as problem-solvers instead of adversaries.
Mediation allows for flexible solutions and settlements. The relief available in court is usually based on pecuniary damages, and equitable relief is hard to come by. In mediation, however, the parties can agree to a settlement requiring, or restraining, action by one party.
Furthermore settlements reached in mediation are more agreeable to both parties than court judgments because any settlement arrived at through negotiation is necessarily agreed to voluntarily by both parties, obligations under the agreement are more likely to be fulfilled than obligations imposed by a court.
Self-evidently, the longer a dispute continues, the more costly and difficult it is likely to resolve and all disputes are better addressed at an early stage to avoid the issues escalating. Early mediation can achieve this if the parties are sufficiently motivated to seek a resolution. There is also much to be said for attempting to settle before each party becomes too entrenched in their view or has been encouraged to adhere to a particular stance through what they may see as their opponents unreasonableness.
Mediation may also enable parties to preserve the relationship between them whether by resuming the contractual arrangement they were already in or by developing other areas for the future. Most mediators have had the experience of resolving difficult and potentially contentious situation well, thereby enhancing the relationship between the parties.
Mediation undertaken early in the course of a dispute often captures accumulated goodwill before it dissipates or is eroded by the dispute itself. Finally, early resolution of a dispute limits the amount of management time spent on it as well as the financial cost, whether that can be in terms of legal fees, loss employee time or other disbursements.
As the provisions of the Companies Act No. 07 of 2007 in relation to the Companies Disputes Board on Company law were compiled with wide scope, the members decided to identify the scope of the board and take actions to formulate regulations and guidelines which do not contravene the Companies Act. The Board has taken the initiative to create procedure and Applications for mediation are available for collection at the office of the Registrar General of Companies. Applications are required to be made jointly.
The Companies Disputes Board administrative cost is based on the value of the matter referred for mediation. If the value of the subject matter referred for mediation does not exceed Rs. 5 million, an initial fee of Rs. 25,000 should be deposited prior to the proceedings for mediation. In the event the value of the subject matter referred for mediation exceeds Rs. 5 million, an initial fee of Rs. 50,000 should be deposited prior to the commencement of the mediation.
The fees payable for a mediator per sitting would be Rs. 10,000 and the said cost should be borne equally by both parties to the dispute.
The first meeting of the Companies Disputes Board was official conveyed on 29 May 2013 under the Presidency of Faisza Musthapha Markar and the Board consists of the following members: B. Manawadu, W.A. Thilanka Weerasinghe, Meerasahib Maharoof, Shiraz M. Noordeen and M.D.H.S. Mathugamage (Secretary).
