Commercial mediation: an alternative to litigation
A voluntary means of resolution
Unlike family mediation, commercial mediation between businesses is not the subject of a dedicated legal framework in the CCP: it mainly relies on the parties' agreement to use a mediator, often provided for by a contractual mediation clause, or decided jointly once the dispute has arisen.
The benefits for businesses
Commercial mediation offers a confidentiality that court proceedings, in principle public, do not always guarantee, control by the parties over the outcome of the dispute rather than a decision imposed by a third party, and generally greater speed than civil litigation, which often makes it possible to preserve a business relationship the parties wish to continue.
How it interacts with arbitration
Many commercial contracts, particularly international ones, provide for clauses combining mediation and arbitration, with mediation acting as a preliminary attempt at amicable settlement before resorting, if it fails, to binding arbitration proceedings before an arbitral tribunal.
The binding force of the agreement reached
An agreement reached through commercial mediation in principle takes the form of a settlement contract between the parties, whose binding nature rests on the general rules of contract law, and not on systematic court approval as is sometimes the case in family matters.
Frequently asked questions
Can a business be forced to use mediation?
In principle no, unless a contractual mediation clause, freely accepted when the contract was signed, provides for this preliminary step in the event of a dispute.
Does a commercial mediation agreement have the same force as a judgment?
It in principle takes the form of a settlement contract between the parties, binding under the general rules of contract law, but does not automatically benefit from the enforceability of a judgment unless an additional step provided by law is taken.
Why combine mediation and arbitration in a commercial contract?
To first attempt a quick, confidential amicable settlement through mediation, while retaining, if it fails, binding arbitration proceedings that make it possible to finally resolve the dispute without going through the state courts.