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In the deadlock: the refusal to talk

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Martin Hauser
Co-Chair, IBA Mediation Committee
Martin Hauser Mediation, Munich

martin.hauser@martinhausermediation.com

I call the mediation experience in which I was involved as a mediator and which I want to share with you, 'In the deadlock: the refusal to talk'*.

A couple of years ago, a Northern European parent company agreed to mediate a conflict on behalf of its Southern European subsidiary and a Southern European distributor.

It was a very classical conflict about the termination of a distribution contract under Southern European law. According to the Southern European distributor, the termination was abusive and he therefore claimed damages from the Northern Europeans.

As usual, I got into contact with the Northern European and the Southern European attorneys to organise the mediation proceedings, since in Europe many lawyers and companies are not yet familiar with mediation as such.

It was then difficult to find a date for an in-person mediation meeting in Paris, but finally the parties found one which suited everybody.

At this stage they could not agree on the language – the Northern Europeans asked for English and the Southern Europeans asked for French. I proposed to start in both languages and was confident that we would sort it out in the actual meeting.

Surprisingly, a week before the mediation the Northern European side sent out an email requesting the postponement of the mediation meeting to a later date, since ’new elements have occurred which would need further investigation‘. Such new elements would be shared with the Southern European side’s attorney.

As mediator, I asked the parties whether we could not uphold the commonly agreed mediation date and share such information within the mediation meeting.

The Northern European side answered that this information could not be shared, but that the Southern European attorney would be informed confidentially.

At some point, I heard confidentially that the Northern Europeans would try to build up a case of sexual harassment against the Southern European distributor concerning people in the Southern European subsidiary of the Northern European company. Therefore, the Northern Europeans would consider filing a criminal complaint in Southern Europe against the Southern European distributor.

This information remained totally confidential since it was never shared by either side within the mediation. I was not allowed to mention it throughout the whole proceeding.

The parties finally agreed to postpone the mediation meeting which only took place two months later.

The night before, again surprisingly, the Northern European attorney informed me by email, with a copy to his Southern European colleague, of the provisional seizure – that very day – by the Southern European side of the Northern European subsidiary’s bank account in Southern Europe.

The Southern European side did not react.

Since it was the night before the mediation meeting, I sent an email to both attorneys acknowledging receipt of the information provided and made them understand that I was aware that we would have quite a lot to speak about on the next day.

The following day, the parties’ representatives and attorneys arrived on time at the mediation venue.

Because of the strong emotions on both sides, I first met each party and their attorneys separately in a caucus before starting the plenary session.

Here came the third surprise: I had not even started my opening statement, when the Northern European attorney made it clear that he and his client, even though they had travelled from Northern Europe to Paris, would refuse to even ’open their mouths‘ and would not say a word, unless the Southern European side instantly called its bailiff and immediately released the Northern European subsidiary’s bank account from the provisional seizure. 

Needless to say, the Southern European side refused to accept such a spontaneous release as a prerequisite to getting the actual mediation started, but pointed out that it was ready to consider such a release within the negotiation.

Consequently, we were totally blocked… No conversation, no exchange was possible.

Even though we were all in the same room, the Southern European side would start speaking to me in French in order to ensure that the Northern Europeans would not understand anything. In return, the Northern Europeans would use the German language (even though these were not the parties’ respective languages) to avoid the Southern Europeans understanding… A total deadlock.

I then said to the parties in English, that by acting in this manner they would not leave me with much of a choice: either they would consider entering into negotiations and see where it would lead to, or they would oblige me to declare the mediation as unsuccessfully terminated, which would be a pity because one party had travelled a long way. Nobody made any moves.

Finally, in this trap, I had the following idea: being aware that lawyers usually like to talk, even more so in the absence of their clients, I asked the parties and their counsel whether they would agree that I meet both sides’ attorneys together in a cross caucus. The parties agreed and we left the mediation room and met alone in a break-out room.

Here, all the emotions among the attorneys burst out, each side blaming the other, and so on.

Finally, without even noticing it, their language became more constructive and they moved onto real negotiations among attorneys.

At some point in time, I left the room because I became aware that there was some fear of the attorneys losing face.

In the end, a settlement agreement was reached resolving the conflict on all levels, including the question of alleged sexual harassment and of the seizure of the bank account.

However, the parties themselves have never again spoken to each other, and I remained frustrated to not have been able as a mediator to help them reconnect on a personal level, even though we settled the case.

Notes

*This story was orally shared at the 15th ICC International Commercial Mediation Competition in Paris on 11 February 2020, ‘Stories Mediators Tell’, upon the initiative and under the direction of Lela Porter Love, Professor of Law, New York.