UIA World forum of mediation centres Prague, 7–8 June 2013

1. UIA World forum of mediation centresPrague, 7–8 June 2013 Dispute Prevention Informal Assistance - Principles and case studies Michel Nardin Dipl. Ing. ETHZ MSc MBA PMG Consulting Engineers & Economists Michel Nardin - PMG

2. Overview - Dispute Prevention andInformal Assistance / Principles and case studies • Main methods related to dispute prevention and informal assistance • Mediation: principles, procedure, main steps / “PMG Model” • Case studies • Conclusions Michel Nardin - PMG

3. Main methods related to dispute prevention and informal assistance 1.1 Preventive methods • Partnering • Claims Appeals Committee • Dispute review Board (DRB) 1.2 Resolutive methods • Early Neutral evaluation • Expert Determination • Mini-Trial • Conciliation, facilitation • Mediation Michel Nardin - PMG

4. 1.1 Preventive methods 1. Partnering • Periodical meetings during the implementation of the contract • Maintaining an on-going dialogue 2. Claims Appeals Committee • Committee composed of a senior executive of each party • Distant look on the issues 3. Dispute Review Board (DRB) • A board which settles claims or differences of opinion • The DRB makes recommendations or issues opinions Michel Nardin - PMG

5. 1.2 Resolutive Methods 1. Early Neutral Evaluation • The expert is jointly appointed by the parties • Evaluation of crucial issues of fact or law / report not binding 2. Expert Determination • “Schiedsgutachten” / “Expertise-Arbitrage” • The expert’s mission is to arrive at a binding determination of a material fact 3. Mini-Trial • The parties present their dispute before a Mini-Trial Panel (composed by executive from each party and a neutral ) Michel Nardin - PMG

6. 1.2 Resolutive Methods 4. Conciliation, Facilitation • The aim is to bridge the gap between the parties • Handling of effective communication is a key task • The conciliator does not make known his own views 5. Mediation • The role of the mediator is a more active one • Mediation proceedings before a mediator or a mediation panel • The procedure is conducted by the mediator • Caucus sessions / Confidentiality • Constructive proposal for an agreement Michel Nardin - PMG

7. 2. Mediation: principles, procedure, main steps / “PMG Model” 1. Preliminary phase I • Agreement between the Parties on the principle to engage in mediation • Appointment of the mediator (s) 2. Preliminary phase II • Preliminary meeting, definition, procedure, methodology, programme, signature of the agreement • Submission of basic documents and contract (synthesis) • Information, cause of the dispute, amounts in discussion 3. Hearing stage • Separate meeting with each party • Presentation of the case by each Party (caucus sessions) • Questions from the mediator, open discussion Michel Nardin - PMG

8. 2. Mediation: principles, procedure, main steps / “PMG Model” 4. Preparation stage • Analysis of the submitted files and documents • Setting up of a preliminary opinion (provisional report) / constructive proposal for an agreement • Coordination between the mediators 5. Negotiation phase I • Separate meeting with each party: • Critical review / analysis of technical, financial, contractual issues and arguments by the mediator / Discussion with the party • Confidential oral proposal by the party for a transactional agreement • Assessment: possible agreement ? or is there still a gap between the parties? Michel Nardin - PMG

9. 2. Mediation: principles, procedure, main steps / “PMG Model” 6. Negotiation phase II • Separate meeting with each party: • Review with the party of the financial costs related to litigation or arbitration • Evaluation of all resulting impacts and damages • Mediator’s request for a new agreement proposal by the party • New assessment: possible agreement? If not, then: 7. Closing stage • Drafting of a mediation report where the mediators present their own final assessment • This report may be used by the parties in view of negotiating a future agreement(?) Michel Nardin - PMG

10. 3. Case studiesa) “Ténérez” bridge / France • Design and built contract • Dispute between the owner (public authority) and the contractor (private company) • Cause: construction costs/ design issues and responsibilities / delays • Amount in dispute corresponds to ca. 50% of the contract amount! • Legal proceedings already initiated / then suspension • Counsels and Chair of Tribunal in favour of mediation (duration and cost of the legal proceedings) • Appointment of 2 mediators / “expertise-conciliation” • Key-success factor: the Chair of the Tribunal supports the mediation process • Final agreement has been signed after 9 months Michel Nardin - PMG

11. 3. Case studies: b) Industrial plant, food industry / Europe • Industrial contract / supply of production equipment • Dispute between two private companies • Cause: defective equipment / construction v. operation • Contract includes an arbitration clause • Unsuccessful negotiation between the parties for more than 1 year • Amount indispute: € 3 mio • The proposed sole-arbitrator made a recommendation for a mediation • Appointment of 1 mediator • Key-success factor: the managers of each party accepted their share of responsibility • Final agreement has been reached after 1 month Michel Nardin - PMG

12. 3. Case studies c) Industrial plant, aluminium production/ North America • Litigation between the owner (American) and the supplier (European) • Cause: after 15 years of operation the transformers broke down (according to technical specifications, the life expectation is of 25 years) • Amount indispute > US $ 100 mio • Legal proceedings already initiated • Counsels and parties in favour of mediation (cost and duration of arbitration) • Mediation has been conducted in a third country (+ meetings on site) • Key-success factors: • action of the mediator to convince each party • Appointment of a “chief negotiator” by each party • Final agreement has been reached and signed within 1 week Michel Nardin - PMG

13. 3. Case studies d) Building / Europe • Built-only construction contract • Dispute between private owner and private contractor • Cause: construction costs / design issues and responsibilities / delays • Amount in dispute: € 1.5 mio • Both parties agree on a mediation in view of preserving their future commercial relationship • Appointment of 1 mediator • No agreement after the negotiation phase I !! • Mediator’s proposal to draft a non-binding report including the mediator’s recommendations and their justification • On the basis of the report and of the evaluation of the future litigation costs, both parties decided to re-open the negotiation (phase II) • … and finally signed an agreement Michel Nardin - PMG

14. 4. Conclusions • Willingness of both parties to enter into a mediation is a key-success factor • Personality and skills of chief-negotiators designated by each party • Professional experience and skills of the mediator (s) • Mediator’s ability to understand and appreciate the major challenges of both parties • Mediator’s ability to understand the technical, contractual, financial and political issues • Parties’ and mediator’s ability to practice “active hearing” • Development of confidence and relationships between the parties and the mediator (s) Michel Nardin - PMG

15. Thank you! Michel Nardin Dipl. Eng. ETHZ – MSc - MBA PMG Consulting Engineers & Economists Rue du Centre 72 CH-1025 Saint-Sulpice / Switzerland mnardin@pmg-ing.ch www.pmg-ing.ch Michel Nardin - PMG