PMN ready to mediate in commercial disputes

A newly established agency tasked with mediating commercial disputes has been welcomed by some. National Mediation Center (PMN) chairman Denaldy M. Mauna talked to The Jakarta Post's Fitri Wulandari about the center's mission.

Could you explain about the National Mediation Center (NMC)? The National Mediation Center was established because of increasing demands from the public for a system to settle a dispute effectively and efficiently. We want to develop mediation as an alternative in resolving commercial disputes. There are very few who pay attention to the needs of such mediation centers. Although there are a lot of institutions in Indonesia that have a sort of mediation unit, they never make it out in the public. What is the center's relationship to the Jakarta Initiative Task Force (JITF)? JITF is a agency under the auspices of the Cabinet's Financial Sector Policy Committee (KKSK). It was established in the wake of the economic crisis to mediate the restructuring of debt owed by private companies to creditors, mostly foreigners. JITF will finish their duty this year. But don't get it wrong. We are not JITF who changes clothes into NMC, although in reality, most of NMC mediators used to work for JITF. It is totally an independent and different organization. That's why it also consists of mediators from outside JITF. Mediators of NMC come from different backgrounds, such as legal practitioners, bankers, to engineers and accountants. Does it mean NMC will not take cases that have not been settled by JITF? No, unless the disputing parties want us to mediate their cases. Do you also work with the Supreme Court? Yes, in the sense that we offer training to judges on how to apply mediation in commercial court. The Supreme Court wants to develop court-annexed mediation because commercial dispute cases have been piling up. Why are mediation centers needed if we have a commercial court? There are many ways to settle a dispute. There are adjucatory and non-adjucatory settlements. Adjucatory settlement of commercial disputes is by litigation and arbitration. NMC is a non- adjudicatory agency because the outcome of a dispute settlement comes from the disputing parties. Whereas in arbitration, the outcome is decided by arbitrators. As for litigation, the judges decide the outcome of the dispute settlement. Mediation helps disputing parties to negotiate without feeling of loss. These are the differences. How effective is settling disputes using mediation? In the U.S., a study shows that the chances of resolving a commercial dispute throught mediation is between 54 to 84 percent. In Australia, court-annexed mediation has settlement rates of 70 percent. In Indonesia, JITF has a success rate of 70 percent in resolving disputes. Based on this, we see there should be a system or an organization to back up mediation. Particularly with the issue of legal uncertainty. But more importantly, mediation is less expensive, simple and it is not time consuming. Besides, it is more confidential and is not out in the public, so it has more chance to be successful. Does mediation only work when there is a lack of legal certainty, like in Indonesia? Not necessarily. For example, the U.S., which has a more mature and strong legal system, still thinks that a mediation center is necessary. They have it in every state. As for in Indonesia, we are aware that there are many problems with our legal system. That's why we want to improve it by adding a mediation center. What sort of commercial disputes can be settled through mediation? Any civil commercial case can be settled by mediation. JITF is limited to settling debt restructuring between creditors, debtors and sometimes shareholders. As far as NMC is concerned, it is ready to mediate disputes in construction, insurance, bank disputes, and any other disputes related to business transactions or environmental issue. Any disputes, except for crimes, can be settled in NMC. And the disputing parties could be more than one.