Fundamental principles of combined med-arb in Tanzania.

 INTRODUCTION

In most jurisdictions, judiciary is a powerful organ with powers to dispense justice to civilians. But due to tightened court schedule and nature of complaints or suits, there are several bodies or tribunals empowered to adjudicate some complaints of a particular nature prior being taken to court of law . The adjudication of complaints out of court by arbitrator or mediator is called alternative disputes resolution (A.D.R). Alternative Disputes Resolution as the name suggests for itself, it is an alternative process of resolving disputes without attending court trial. This process involves arbitration, mediation and reconciliation, negotiations and neutral case evaluation. Alternative Disputes Resolution is the modern scheme of procedure for disputes resolution, which has been developed, introduced and implemented at the middle levels of the court system in Tanzania in response to a problem facing the administration of justice in the country that is, congestion and excessive delays in the disposal of cases in the courts. The process of dispute settlement involves the professionals or trained persons or conciliator. 

Two most common forms of ADR are arbitration and mediation, negotiation is always applied to attempted to settle disputes prior mediation and arbitration. It is the preeminent mode of dispute resolution. Negotiation allows the parties to meet in order to settle a dispute. The main advantage of this form of dispute settlement is that it allows the parties themselves to control the process and the solution. In negotiations, one party in a dispute follows another party to settle matter amicably without involving a third party.

Mediation is also an informal alternative to litigation. Mediators are third parties trained in negotiations, who bring opposing parties together and attempt to work out a settlement or agreement which fit needs of both parties. Mediation is not binding. Mediation has become a significant method for resolving disputes between investors and their stock brokers. In Tanzania, mediation plays an important role in settling labor disputes, business disputes and other social claims. 

Arbitration is more formal than Mediation. Arbitration works with simplified version of a trial involving limited discovery and simplified rules of collecting and adducing evidence before tribunal. Prior to the occurring of dispute, parties usually enter into a binding arbitration agreement or any other form of agreement with an arbitration clause, that allows them to arrange how arbitration will be conducted when happens disputes. The arbitration clause must state number of arbitrators, arbitration forum, arbitration rules, fees etc. 

The arbitration can be conducted or decided by an arbitral panel or a single personnel/arbitrator, depending on the arrangement of the parties. Arbitrators can be appointed by parties from any profession or fields that they consider more suitable for the resolution of the dispute. For-instance, parties can appoint an arbitrator with an engineering profession to arbitrate a construction dispute. To comprise a panel, either both sides appoints one arbitrator, or each side selects one arbitrator and the two arbitrators elect the third. 

Arbitration proceedings usually last between a few days to a week, and the panel only meets for a few hours per day. The panel or a single arbitrator then determines the matter and issues a written binding decision or arbitral award. Arbitration has long been used in labor, construction, and securities regulation, but is now gaining popularity in other business disputes. 

Both mediation and arbitration are alternative dispute resolution forms but there is narrow different between them. The procedures for hearing, adducing evidence and calling of witnesses by parties is almost the same, the one major difference between mediation and arbitration is the binding nature of its decisions. A mediator has no power to make binding decision, in mediation, a mediator only assist parties to reach decisions which satisfy both parties while in arbitration, an arbitrator can make binding decision which do not satisfy both parties.

Some changes in legal system has introduced a hybrid system where mediation and arbitration are combined together. This system is mostly used in United States and English counties . In this system, both mediation and arbitration run together. Hearing goes with mediation then arbitration (“med-arb”) or arbitration then mediation (“arb-med”).  Med-arb is when the neutral person assist parties to reach mutual decision and the failure of it amounts to  arbitral award basing on the same hearing conducted during mediation. Arb-med is when an arbitrator conducts hearing and prepares an arbitral award enclosed in an envelope. At the same time an arbitrator will try to assist parties to settle the matter, if parties fails to reach mutual decision then an envelope with an arbitral award will be opened for the final decision of arbitration.

An arbitral award is subject to review or appeal if; 1)award was  procured by  corruption, fraud, or  undue  means; 2)  Where  there  was  evident  partiality  or  corruption  in  the  arbitrators,  or either or  them; 3)  Where  the  arbitrators  were  guilty  of  misconduct  in  refusing  to  postpone the  hearing,  upon  sufficient  cause  shown,  or  in  refusing  to  hear  evidence pertinent  and  material  to  the  controversy;  or  of  any  other  misbehavior  by which the rights of any  party  have  been prejudiced;  or 4)  Where  the  arbitrators  exceeded  their  powers,  or  so  imperfectly  executed them  that  a  mutual,  final,  and  definite  award  upon  the  subject  matter submitted was not  made. 

Combined Mediation and arbitration has gained a momentum in commercial and labor disputes which needs quick determination. Combined mediation and arbitration plays a satisfying role in reducing complaints which are not necessarily to be Instituted before court of laws. Combined mediation and arbitration reduces bulk of cases before normal courts which lack enough personnel familiar with actual subject matters of complaints. In Tanzania, labour complaints begins in commission for mediation and arbitration (C.M.A) prior being instituted to High Court if parties fails to reach a satisfying decision. Med-arb or vice versa is subject to several principles or rules as follows;

FUNDAMENTAL PRINCIPLES OF COMBINED MED-ARB

Evidence rule, mediation and arbitration are two different ADR methods which works connected in med-arb. In med-arb process, mediation begins and its failure amount to arbitral award. The evidence rule is applicable during arbitration after failure of mediation to settle the matter. This principle prohibits parties from making reference to statements made during mediation, only material things can be adduced to arbitration as exhibits and not statements by parties and their witnesses. This rule intends to start a matter afresh without confusing arbitration to mediation for the purpose to obtain a new fresh decision. 

Confidentiality rule, there has been huge discussion between lawyers on whether a principle of confidentiality is absolutely applied during med-arb process. Most of commentators believes that there is no confidentiality rule in med-arb process especially when a same person acte as mediator and later as arbitrator in arbitration. When a same person acts in both Mediation and arbitration, automatically there is a chance to decide a matter basing on information gained during mediation. The legal practitioners suggests that, there must be separate neutral personnel who acts in mediation and arbitration to maintain a principle of confidentiality. 

On the one side, confidentiality must be implemented in any med-arb agreement to protect the mediator, and the parties, from the mediator having to testify in court. Should either party use what was said during mediation, the mediator acting as a neutral third party must ensure both parties that s/he cannot testify against one of the parties in order to help the other party. The mediator must remain impartial, both in perception and in fact.  This protects the parties involved in the conflict, so that neither can be penalized over what was discussed in what was supposed to be a confidential mediation. 

In addition to the purely pragmatic legal benefit of a confidentiality agreement, there is a psycho-emotional advantage of the general acknowledgment and acceptance by all parties involved that any discussions will remain “in the room.” For parties to truly feel free to express themselves, to effectively communicate, and to collaboratively brainstorm solutions and problem-solve, they must know that what is said in the mediation setting will not be used against them later. This is the only way to facilitate an open dialog and develop a safe environment for authentic expression. 

Neutral personnel (impartiality), in both mediation and arbitration or med-arb, a neutral third party is necessary to act as judge in a matter. That third person must be free from conflict of interests so as to rule a matter without favor. A mediator or an arbitrator can be appointed  by parties from any cadre as far as an appointed person is suitable to settle the dispute. Parties are allowed to appoint different persons who will together decide a matter as a panel of mediators or arbitrators. 

Parties autonomy, parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest. In med-arb, parties have enough freedom to choose mediators or arbitrators and to arrange the entire proceedings. This freedom is not available in adversarial court system where there is standby procedures of the laws to be followed. 

In med-arb, parties are entitled full powers to organize the entire event. The composition of panelists, fees arrangements, and all proceedings is on hands of parties except for things which cannot be interfered especially those arrangements which goes against the domestic laws. There are general statutes governing arbitration and mediation but the entire freedom is left to parties to decide.

The court should not interfere (independent procedure), mediation and arbitration procedures and outcome cannot be interfered by court of law unless, there is enough evidence that there was elements of fraud, mis-conduct in course of hearing by arbitrators, corruption and all forms of Procedural impropriety. The court of law is tied hands from interfering process and decision of med-arb unless there is acceptable reasons to do so.

PRONS OF MED-ARB

Finality, the major advantage of med-arb is certainty of final decision. The final decision is compulsory when parties apply med-arb to settle their dispute, this is the outcome of the med-arb process which applies two ADR at the same time to settle the matter. In the same process, a mediator will try to settle a dispute and is empowered to make final binding decision in the same med-arb process if parties fails to reach mutual decision. Med-arb is important in labour disputes because it simply the entire process of justice to allow parties to benefit from judgment as quick as possible. 

Combined mediation and arbitration is efficient, Mediation-arbitration saves time and money. Med-arb can save time and money over separate sequential phases/stages of mediation and arbitration in two important respects. First, if the mediation phase does not reach mutual settlement, the parties and their lawyers do not have to hire another neutral unfamiliar with the case and then prepare for a full-blown arbitration. Second, the issues in dispute are frequently narrowed during the mediation phase and this forward progress can carry over directly into the arbitration.  The med-arb process is acceptable under the eyes of the law either, this increases its efficiency.

In Aums Tanzania Limited v. Peter Ambrose Kayombo  an applicant filed a revision before High Court Labour Division on grounds that the CMA for labour disputes made improper award through combined mediation and arbitration. The court held that, “ a procedure of a combined mediation and arbitration in resolving labour dispute is not strange, it is provided under Rule 18 of the GN.64 of 2007 of the Labour Institutions Mediation and Arbitration Rules 2007 provides that, subject to section 19(7) of the Labour Institution Act, No. 7 of 2004 and section 88(3) of the Employment and Labour Relations Act No.6 of 2004, the commission may set a combined mediation arbitration process on the same date which may be conducted by the same person.”

Flexibility is another advantage of applying med-arb in labour disputes in Tanzania since it is easy to arrange things by parties to fit the dispute. The mode of resolution can be fashioned in whatever mode by parties so as to be able to reach final decision quickly. Blankenship argues that while med-arb may not be suitable for every dispute, it is a leading example of “adaptive ADR” where “[the different ADR] forms become adaptable, combinable, reversible, and even discardable for the sake of the parties and their dispute” . 

CONS OF MED-ARB

Too procedural and risky, a mediator in med-arb needs to be careful when applying med-arb process in settling disputes. Med-arb is recognized under our laws and regulations hence there is several guidelines which regulate conducting of combined mediation and arbitration. A mediator in med-arb is required to issue notice to parties to inform them that he/she will act both as mediator and arbitrator, failure to do that may results to improper award.

In the case of Geita Gold Mine v. William swai , the applicant in his application, one of the ground for revision was procedural impropriety. The applicant was not informed on several mediation procedures includes combined med-arb and the entire hearing procedures, there was also no combined mediation and arbitration agreement between parties etc. The court of law ordered re-trial on a ground of procedural impropriety, med-arb is full of procedures and one must carefully apply med-arb.

Also see the case of Katavi And Kapufi Limited & Another Vs Emmanuel Dotto Ibrahim And 8 others  where court of law upheld decision of CMA on grounds of Procedural impropriety. 

Coercion, this is a principle in mediation that, the parties must settle the matter without being forced or coerced by a mediator or any other person. In mediation parties tries to settle their dispute on their own under assistance of a mediator. This principle lack powers in combined mediation and arbitration since an arbiter is empowered to coerce parties by making final binding decision. In med-arb, parties can be treated in any way as long as the intention is dispense justice.

Coercion is totally prohibited in mediation and if mediator coerce parties to reach decision, the out come of that mediation is null and cannot not be enforced under the laws of Tanzania. Coercion in med-arb during labour disputes has a dis-advantage of forcing parties to accept orders they do not consent.

Confidentiality, there is no confidentiality in med-arb. The entire med-arb process involves a same person who acts both as mediator and later as arbitrator. A same person comes with entire information collected during mediation which he/she use later to make arbitral award. A principle of confidentiality has no meaning when comes to med-arb process. 

Confidentiality is the keeping of another person or entity’s details private. Certain professionals are required by law to keep information shared by a client or patient private, without disclosing the information, even to law enforcement, except under certain specific circumstances. The principle of confidentiality is most commonly expected in the medical field, and the legal field. 

Other businesses have a right to expect employees or other business associates to maintain confidentiality. This type of discretion is not automatically assumed, but requires an express agreement between the parties that such information will be kept secret, usually in the form of a signed confidentiality agreement. 

The main purpose of confidentiality principle in mediation and arbitration as separate ADRs is to make sure that there is no flow of information from mediation to arbitration so as to make arbitrators neutral, without any information or detail concerning a complaint as determined in mediation as to give him/her a chance to make a new decision with no any influence from previous information from mediation.

CONCLUSION

The use of combined mediation and arbitration is more efficient than using separate mediation and arbitration process to settle disputes. The med-arb has low cost compare to separate mediation and arbitration process where parties are required to choose separate chairs of mediation and arbitration, fees to cover arbitral process etc. Most lawyers suggests the application of combined mediation and arbitration to solve disputes rather than applying separate process of mediation and arbitration. Med-arb is still a new process in Tanzania, this system has used in some complaints but there is a need to improve the process so as to avoid breach of general principles governing ADRs.

REFERENCE

BOOKS

Ellen E.D, combinations of Mediation and Arbitration with the Same Neutral: A Framework for Judicial Review, 2013

Renate Dendorfer†  and Jeremy Lack, The Interaction Between Arbitration and Mediation: Vision v Reality, vol no 1 2004

Mark Batson Baril and Donald Dickey, MED-ARB: The Best of  Both Worlds   or Just A Limited ADR Option, 2010

IFC, Alternative Dispute Resolution Manual : Implementing Commercial Mediation, Small and Medium Enterprise Department, The World Bank Group, November 2006

CASE LAWS

Aums Tanzania Limited v. Peter Ambrose Kayombo (Labour Revision No 79 of 2018)[2020] TZHC 1696 (06 July 2020)

Geita Gold Mine v. William swai (Labour Revision Case No.80 of 2018) [2019] TZHC 2072; (31 January 2019)

Katavi And Kapufi Limited & Another Vs Emmanuel Dotto Ibrahim And 8 others (Labour Revision No. 4 of 2020) [2020] TZHCLD 3; (24 August 2020)

OTHER SOURCES

https://legaldictionary.net/confidentiality/ (Accessed May 22, 2021)

https://www.mediate.com/articles/grant.cfm ( Accessed May 22, 2021)