What is the FAI?
The Arbitration Institute of the Finland Chamber of Commerce (FAI) administers domestic and international mediations conducted under the Mediation Rules of the Finland Chamber of Commerce.
The FAI is an autonomous arbitration body of the Finland Chamber of Commerce administering arbitrations and mediations. Although part of the organisation of the Finland Chamber of Commerce, the FAI carries out its functions in complete independence from the Finland Chamber of Commerce and its organs. The FAI does not itself resolve disputes, but administers proceedings in accordance with its arbitration and mediation rules.
What is mediation?
Mediation is a voluntary and confidential process, in which a neutral third party, a mediator, assists the parties (two or several) in settling their disputes amicably. Mediation also helps to maintain business and personal relationships.
Mediation is often characterised as a cost-effective, fast, flexible, straightforward, and user-friendly way of settling or avoiding disputes.
The mediator’s role is to assist the parties in finding an amicable solution by facilitating discussions, exchange of information, and negotiations between the parties.
In facilitative mediation, the mediator does not make decisions or rulings as to the merits of the case.
What are the benefits of FAI mediation in resolving disputes?
The Mediation Rules of the Finland Chamber of Commerce have been prepared to provide a flexible, straightforward and user-friendly framework for facilitative mediation. In facilitative mediation, the mediator assists the parties in finding an amicable solution and a negotiated agreement that is acceptable to all parties.
The characteristics of FAI mediation include the following:
Flexibility. The mediation process is regulated only lightly in order to provide the parties and the mediator with the flexibility to tailor the process to the needs of each particular situation.
Voluntary process. FAI mediation is a voluntary process. The parties can agree to use FAI mediation before or after the dispute has arisen.
Confidentiality. All parties, the mediator, the FAI and any other person participating in the proceedings shall keep the existence and outcome of an FAI mediation confidential.
Speed. In practice, mediation proceedings are often completed in one or two mediation sessions with some preparatory work before the mediation. Typically, a mediation session lasts one day.
Reasonable costs. Since mediation is typically a speedy process, the costs of mediation are limited. The parties pay the costs of FAI mediation in equal shares, unless otherwise agreed.
Broad scope of application. All businesses and industries may benefit from mediation. Mediation is suitable for the resolution and avoidance of both domestic and international conflicts and disputes regardless of their size and complexity. The mediation process also allows parties to consider the conflict from a broader perspective than merely focusing on the legal aspects of the dispute.
Connection to FAI arbitration. The parties may agree to use the arbitration services provided by the FAI if they fail to reach a full settlement in the FAI mediation, or if they want to confirm their settlement in an arbitral award.
How can parties submit their disputes to mediation?
Parties may agree to submit their disputes to mediation by inserting a mediation clause in their main contract. It is also possible to submit a dispute to mediation with a separate agreement and once the dispute has already arisen. The FAI recommends its Model Mediation Clause.
What are the costs of FAI mediation and is it possible to estimate the costs beforehand?
The costs of an FAI mediation are comprised of:
- the Administrative Fee of the FAI, which includes the Filing Fee paid in the mediation;
- the fee of the mediator; and
- expenses, if any.
The mediator’s fee shall be determined by the FAI. Separate fee arrangements between the parties and the mediator are contrary to the FAI’s mediation rules.
The mediator’s fee shall be based on an hourly or daily rate (excluding VAT, if any) fixed by the FAI when appointing or confirming the mediator and after having solicited views of the mediator and the parties. The hourly or daily rate shall be reasonable in amount and shall be determined in light of the nature of the matter and other relevant circumstances. The FAI determines the Administrative Fee based on the amount in dispute.
The Filing Fee in an FAI mediation is EUR 1 500. The Filing Fee is non-refundable even if the Request for Mediation is withdrawn or the mediation is terminated on other grounds. The Filing Fee is refundable only, if one of the parties objects to FAI mediation or does not submit a response within the time limit set by the FAI, and the FAI declares that the mediation has terminated in accordance with Article 4.3 of the mediation rules.
The Filing Fee paid in the mediation constitutes a part of the FAI’s Administrative Fee and shall be credited to the respective party’s share of the advance on costs fixed by the FAI.
The FAI will fix an advance on costs in all mediations conducted under its rules. The advance on costs is intended to cover the costs of the mediation. Parties will be required to pay an advance on costs or their share thereof at the initial stages of the mediation. Unless otherwise agreed by the parties, each party shall pay an equal share of the advance on costs, within the time limit set by the FAI.
