Mediation in commercial disputes

Mediation in commercial disputes is a confidential and voluntary procedure in which a third, neutral person – the mediator – assists the parties to the dispute in reaching a settlement -agreement. The mediator does not decide on behalf of the parties and does not offer a solution. Instead, the mediator helps the parties to the dispute to find a joint solution to their dispute – a solution that will satisfy both parties. Mediation in commercial disputes gives the parties autonomy in resolving the dispute, enables a comprehensive solution to their problems, and provides the possibility of transforming the business relationship. It also gives them the opportunity to restore communication and trust, identify their interests and needs, continue cooperation, preserve business reputation, and replace confrontation with cooperation.

Mediation is an alternative to litigation and lengthy proceedings

Mediation is not a compromise, but a strategic tool for the swift resolution of conflict. The mediator conducts the procedure with the aim of supporting the parties in finding solutions and, in this way, helps transform opposing parties into partners who cooperate in seeking a solution to a common problem.

When and how can mediation in commercial disputes be initiated?

Mediation may be initiated either by submitting a proposal prior to the commencement of court proceedings in small-value disputes, or under a court decision referring the parties to an initial meeting with a mediator.

The court shall refer the parties to a first meeting with a mediator in all commercial disputes, except in disputes involving an international element, disputes in which company law applies, and disputes where one of the parties is subject to bankruptcy proceedings.

Mediation may also be initiated on the basis of a contractual clause.

The parties may agree by contract that they will attempt to resolve a specific dispute or all disputes arising from a particular legal relationship, pursuant to a mediation clause – through mediation before initiating proceedings before a court. If the dispute is not resolved through mediation, a party may initiate proceedings before the competent court by filing a lawsuit.

Who participates in mediation?

In mediation proceedings in commercial disputes, the parties to the dispute participate, as well as the owners or directors of companies and authorized representatives, while their attorneys or legal representatives may also participate. If necessary due to the nature of the dispute, experts may also be engaged in the mediation procedure at the request and with the consent of the parties.

Mandatory first meeting with the mediator

The proposing party that initiates the mediation procedure before court proceedings are initiated, and the other party that accepts mediation, are obliged to attend the first meeting with the mediator. The parties who have been referred by a court decision to the first meeting with the mediator are also obliged to attend that meeting.

At the first meeting with the mediator, the mediator informs the parties about the advantages of resolving the dispute through mediation and issues them a certificate of attendance in the first meeting with the mediator. At the first meeting with the mediator, the parties may conclude a mediation agreement for the purpose of attempting to resolve the dispute amicably.

Are there costs in commercial mediation?

Unless the parties have agreed otherwise, each party bears its own costs, while the joint costs relating to the mediator’s fee are borne in equal shares.

Settlement concluded in mediation

A settlement is an out-of-court agreement in which the parties to the dispute have agreed on the content of the agreement. Its text is prepared by the parties to the dispute themselves, their attorneys or legal representatives, or the mediator, in written form. Regardless of the type of dispute, it must contain information on the time and place of conclusion of the settlement, the names of the parties to the dispute, their residence or registered address, the names of their attorneys or legal representatives if they have any, the text of the agreement itself, and the signatures of the parties and the mediator.

A settlement concluded in mediation acquires the status of an enforceable document by confirmation before the competent court, or by being drawn up as a notarial deed. Through the court’s review of the concluded settlement in a simple procedure without the participation of the parties, appropriate legal certainty and protection of public order are ensured.

A settlement concluded before a mediator is binding on the parties who concluded it. The parties are obliged to perform their obligations under the settlement within the time limit specified in the settlement – Article 23 of the Law on Alternative Dispute Resolution (“Official Gazette of Montenegro”, No. 77/20).

Why is mediation the most suitable method for resolving commercial disputes?

• The outcome of the procedure is controlled by the parties.
  • The parties have the opportunity to say everything that is important to them.
  • A solution in mediation is primarily reached on the basis of business principles, rather than legal principles.
  • Due to the efficiency of mediation, the parties save their resources and time.
  • Business reputation is preserved and the continuation of business cooperation is made possible.

Where is mediation in commercial disputes conducted?

Mediation in commercial disputes is conducted in Podgorica, on the premises of the Centre for Alternative Dispute Resolution. However, in agreement with the parties, it may also be conducted in other cities, depending on the registered offices of the companies involved.