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Conciliation/Mediation Rules of the Kuala Lumpur Regional Centre for Arbitration (1998)

  • Rule 1

    Application of the Rules

    (1) Where the parties have agreed to conciliate under the auspices of the Kuala Lumpur Regional Centre for Arbitration (KLRCA), these rules shall apply.

    (2) The parties may agree to exclude or vary any part of the Rules at any time.

    (3) Where any of these Rules is in conflict with a provision of law from which the parties cannot derogate, that provision prevails.

    Rule 2

    Initiation and Commencement of Conciliation/Mediation

    (1) The party initiating conciliation shall submit a written request to the KLRCA which shall contain the following:

    (a) The names and addresses of the parties;

    (b) A reference to the conciliation clause or a copy of the separate conciliation agreement, if any;

    (c) A reference to the contract or other legal relationship out of or in relation to which the dispute arises;

    (d) A proposal as to the number of Conciliators (one or three), if the parties have not agreed thereon;

    (e) Nature of dispute and the amount involved and/or other remedies sought;

    (f) Registration fee in accordance with the Schedule of Fees annexed.

    (2) The KLRCA shall send a copy of the request to the other party.

    (3) Conciliation proceedings commence when the other party accepts the request to conciliate in writing.

    (4) If the other party rejects the request for conciliation or if the KLRCA does not receive a reply within 30 days from the date on which the KLRCA sends the conciliation request, the KLRCA may then elect to treat this as a rejection of the invitation to conciliate and inform theparty initiating conciliation accordingly.

    Rule 3

    Number of Conciliators

    There shall be one conciliator unless the parties agree that there shall be two or three conciliators. Where there is more than one conciliator, they ought, as a general rule, to act jointly.

    Rule 4

    Appointment of Conciliators

    (1) (a) In conciliation proceedings with one conciliator, the parties shall endeavour to reach agreement on the name of a sole conciliator;

    (b) In conciliation proceedings with two conciliators, each party appoints one conciliator;

    (c) In conciliation proceedings with three conciliators, each party appoints one conciliator. The parties shall endeavour to reach agreement on the name of the third conciliator.

    (2) The Director of KLRCA shall assist in the appointment of conciliators if the parties fail to reach agreement on the name or names of the conciliator, in particular,

    (a) a party may request the Director to recommend the names of suitable individuals to act as conciliator; or

    (b) the parties may agree that the appointment of one or more conciliators be made directly by the Director.

    In recommending or appointing individuals to act as conciliator, the Director shall have regard to such considerations as are likely to secure the appointment of an independent and impartialconciliator and, with respect to a sole or third conciliator, shall take into account the advisability of appointing a conciliator of a nationality other than the nationalities of the parties.

    Rule 5

    Submission of Statements to Conciliator

    (1) The conciliator1, upon his appointment, requests each party to submit to him a brief written statement describing the general nature of the dispute and the points at issue. Each party sends a copy of his statement to the other party.

    (2) The conciliator may request each party to submit to him a further written statement of his position and the facts and grounds in support thereof, supplemented by any documents and other evidence that such party seems appropriate. The party sends a copy of the statement to the other party.

    (3) At any stage of the conciliation proceedings, the conciliator may request a party to submit to him such additional information as he deems appropriate.

    (4) Where pursuant to this Rule, each party submits written statements and documents to the conciliator and to the other party, copies shall also be furnished to the KLRCA.

    Rule 6

    Representation and Assistance

    The parties may be represented or assisted by persons of their choice. The names and addresses of such persons are to be communicated in writing to the other party, to the conciliator and to the KLRCA. Such communication is to specify whether the appointment is made for purposes of representation or of assistance.

    Rule 7

    Role of Conciliator

    (1) The conciliator assists the parties in an independent and impartial manner in their attempt to reach an amicable settlement of their dispute.

    (2) The conciliator will be guided by principles of objectivity, fairness and justice, giving consideration to, among other things, the rights and obligations of the parties, the usages of the trade concerned and the circumstances surrounding the dispute, including any previous business practices between the parties.

    (3) The conciliator may conduct the conciliation proceedings in such a manner as he considers appropriate, taking into account the circumstances of the case, the wishes the parties may express, including any request by a party that the conciliator hear oral statements, and the need for a speedy settlement of the dispute.

    (4) At any stage of the conciliation proceedings the conciliator may at the request or with the consent of all parties make proposals for a settlement of the dispute. Such proposals need not be in writing and need not be accompanied by any reasons therefor. Such proposals shall be made in good faith to facilitate the conciliation process, and shall not be binding on the parties.

    Rule 8

    Administrative Assistance

    The Director of KLRCA may arrange for administrative assistance or facilities in order to facilitate the conduct of the conciliation proceedings at the request of the conciliator or the parties.

    Rule 9

    Communication between Conciliator and Parties

    The conciliator may invite the parties to meet with him or may communicate with them orally or in writing. He may meet or communicate with the parties together or with each of them separately.

    Rule 10

    Venue

    The conciliation shall be held at KLRCA at Kuala Lumpur or any other place chosen by the parties in consultation with the conciliator.

    Rule 11

    Disclosure of Information

    When the conciliator receives factual information concerning the dispute from a party, he discloses the substance of that information to the other party in order that the other party may have the opportunity to present any explanation which he considers appropriate. However, when a party gives any information to the conciliator subject to a specific condition that it be kept confidential, the conciliator does not disclose that information to the other party.

    Rule 12

    Co-operation of Parties with Conciliator

    The parties will in good faith co-operate with the conciliator and, in particular, will endeavour to comply with requests by the conciliator to submit written materials, provide evidence and attend meetings.

    Rule 13

    Suggestions by Parties for settlement of Dispute

    Each party may, on his own initiative or at the invitation of the conciliator, submit to the conciliator suggestions for the settlement of the dispute.

    Rule 14

    Settlement Agreement

    (1) When it appears to the conciliator that there exist elements of a settlement which would be acceptable to the parties, he formulates the terms of a possible settlement and submits them to the parties, for their observations. After receiving the observations of the parties, the conciliator may reformulate the terms of a possible settlement in the light of such observations.

    (2) If the parties reach agreement on a settlement of the dispute, they draw up and sign a written settlement agreement2. If requested by the parties, the conciliator draws up, or assists the parties in drawing up, the settlement agreement.

    (3) The parties by signing the settlement agreement put an end to the dispute and are bound by the agreement.

    Rule 15

    Confidentiality

    The conciliator and the parties must keep confidential all matters relating to the conciliation proceedings. Confidentiality extends also to the settlement agreement, except where its disclosure is necessary for purposes of implementation and enforcement.

    Rule 16

    Termination of Conciliation Proceedings

    (1) The conciliation proceedings are terminated,

    (a) by the signing of the settlement agreement by the parties, on the date of the agreement; or

    (b) by a written declaration of the conciliator, after consultation with the parties, to the effect that further efforts at conciliation are no longer justified, on the date of the declaration; or

    (c) by a written declaration of the parties addressed to the conciliator to the effect that the conciliation proceedings are terminated, on the date of the declaration;

    (d) by a written declaration of a party to the other party and the conciliator, if appointed, to the effect that the conciliation proceedings are terminated, on the date of the declaration; or

    (e) within three months from the date of commencement of conciliation proceedings unless agreed otherwise by the parties and the conciliator.

    (2) Unless agreed otherwise, the conciliator at the termination of the conciliation proceedings shall furnish to the Director of KLRCA a copy of the settlement agreement signed by the parties.

    Rule 17

    Resort to Arbitral or Judicial Proceedings

    The parties undertake not to initiate, during the conciliation proceedings, any arbitral or judicial proceedings in respect of a dispute that is the subject of the conciliation proceedings, except that a party may initiate arbitral or judicial proceedings where, in his opinion, such proceedings are necessary for preserving his rights.

    Rule 18 Costs

    (1) The Director of KLRCA shall fix the costs of the conciliation in accordance with the Schedule of Fees annexed. The term "costs" includes:


    1. the fee of the conciliator which shall be reasonable in amount;
       
    2. the travel and other expenses of the conciliator;
       
    3. the travel and other expenses of witnesses requested by the conciliator with the consent of the parties;
       
    4. the cost of any expert advice requested by the conciliator with the consent of the parties;
       
    5. the expenses incurred by KLRCA in connection with the conciliation as well as its administrative charges.
       
    (2) The costs, as defined above, are borne equally by the parties unless the settlement agreement provides for a different apportionment. All other expenses incurred by a party are borne by the party.

    Rule 19

    Deposits

    (1) The Director of the KLRCA shall at the commencement of the conciliation request each party to deposit an equal amount as an advance for the costs referred to in Rule 18(1) which are expected to be incurred.

    (2) During the course of the conciliation proceedings the Director of KLRCA may request supplementary deposits from the parties in equal amounts.

    (3) If the required deposits are not paid in full by both parties within thirty days after the receipt of the request, the Director of KLRCA shall so inform the parties in order that one or another of them may make the required payment. If such payment is not made the conciliator, after consultation with the Director of KLRCA, may order the suspension or termination of the conciliation proceedings.

    (4) The Director of KLRCA may apply deposits towards disbursements for the costs of conciliation.

    (5) Upon termination of the conciliation, the Director of KLRCA shall render an accounting to the parties of the deposits received and return any unexpended balance to the parties.

    Rule 20

    Role of Conciliator In Other Proceedings

    (1) The conciliator shall not, without the consent of the parties, act as an arbitrator or as a representative or counsel of a party or appear as a witness in any arbitral or judicial proceedings in respect of a dispute that is the subject of the conciliation proceedings.

    (2) The conciliator shall not be presented by the parties as a witness in any arbitral or judicial proceedings.

    Rule 21

    Admissibility of Evidence In Other Proceedings

    Unless the parties agree otherwise, they will not rely on or introduce as evidence in arbitral or judicial proceedings, whether or not such proceedings relate to the dispute that is the subject of the conciliation proceedings:


    1. views expressed or suggestions made by the other party in respect of a possible settlement of the dispute;
       
    2. admissions made by the other party in the course of the conciliation proceedings;
       
    3. proposals made by the conciliator;
       
    4. the fact that the other party had indicated his willingness to accept a proposal for settlement made by the conciliator.
       
    Rule 22

    Exclusion of Liability

    Neither KLRCA nor the conciliator shall be liable to any party for any act or omission related to the conduct of the conciliation proceedings.

    Rule 23

    Waiver of Defamation

    The parties and the conciliator agree that statements or comments whether written or oral made in the course of the conciliation proceedings shall not be relied upon to found or maintain any action for defamation, libel, slander or any related complaint.

    Schedule of Fees

    (a) Registration Fee

    A registration fee of US$ 50.00 is payable by the party initiating conciliation (Rule 2(1)(f))

    (b) Deposit

    A deposit of US$500.00 towards administrative costs is payable by each party on a reference to conciliation/mediation. This payment is not refundable and shall be credited to the portion of the administrative costs paid by each party for the conciliation.

    (c) Administrative Costs

    The administrative costs for a conciliation/mediation shall be fixed at one-quarter of the amount calculated in accordance with the scale of administrative costs as set out in Appendix B of the KLRCA Arbitration Rules with a minimum of US$500.00. In the event that the amount in dispute is not stated, the administrative costs shall be fixed by the Director of KLRCA.

    (d) Conciliator/Mediator's Fee

    In fixing the fee of the conciliator/mediator the Director of KLRCA may undertake consultations with the conciliator/mediator and the parties. Such fee shall be reasonable in amount, taking into consideration the amount in dispute, the complexity of the subject matter, the time spent by the conciliator/mediator and any other relevant circumstances of the case.


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    1 In this and all following articles, the term "conciliator" applies to a sole conciliator, two or three conciliators, as the case may be.

    2 The parties may wish to consider including in the settlement agreement a clause that any dispute arising out of or relating to the settlement agreement shall be submitted to arbitration.