On 15 December 2021 the Law of Ukraine “On Mediation” No. 1875-IX (“Law”) entered into force. The Law introduced mediation as a voluntary alternative dispute resolution method for the first time at the legislative level.
Certain features of mediation
- Mediation is conducted upon parties’ consent and according to the principles of voluntariness and confidentiality, as well as independence, neutrality, and impartiality of the mediator.
- Mediation may be invoked in any kind of disputes except those that affect or may affect the rights and legitimate interests of third parties who do not participate in the mediation.
- Mediation is available at any stage of a dispute (from preparation for initiation of court/arbitration proceedings up to enforcement proceedings).
- A mediator is not allowed to give any advice or recommendations to the parties in mediation regarding the merits of the dispute, disclose confidential information, or represent any of the parties in the same dispute.
- Following mediation, the parties shall enter into an agreement that sets out the obligations agreed upon by the parties, the manner and timing of their fulfilment, and the consequences of their non-performance or inadequate performance.
Impact on litigation
- Mediation does not affect the limitation period.
- The court may adjourn the preparatory hearing if the parties have agreed to mediation.
- The court is obliged to suspend the proceedings for a maximum of 90 days if the parties have agreed to enter mediation and submitted a respective motion to the court.
- The claimant may reimburse from the state budget 60% of the court fees paid for the submission of the claim, appeal or cassation appeal, provided that the parties reached a settlement, the claimant withdrew its claim or the claim was admitted by the defendant and such result was achieved following a successful mediation.
We welcome the adoption of the Law. We believe that in some cases mediation may be a quick and efficient alternative to classiс dispute resolution methods.