Author: Shahlar Ibadzade, LLM in Saarland University: Europa-Institut – European and International law, 2019-2022
Editor: Tofig Shahniyarov, MPA at ADA University, 2020-2022, Doctor of Philosophy – PhD at Middlesex University
The article describes one of the alternative dispute resolution mechanisms – mediation. The main focus is on the historical background of the Mediation Institute around the globe, such as ancient China, Greece, England and meanwhile the medieval ages of Europe. In addition, the article discusses the fast-paced development of mediation with examples is discussed.
When it comes to the second part of the article, it analyzes the legislation of mediation in Azerbaijan. As the country has recently adopted the new Law “On Mediation” and additional Resolutions to the Law, which is necessary to highlight here. Furthermore, the article explains the mediation agreement and functionality of the mediators under the aforementioned law. In addition, the legal requirements for the mediation process are counted with a brief description.
The practice of mediation started to develop into a fully operational institution in liberal democracies sometime during the second part of the twentieth century. One of the primary causes for this is the rapid expansion of free market economies, which has led to the creation of numerous disputes and the necessity to require their resolution as swiftly as possible, sometimes behind closed doors. Entrepreneurs and businessmen were well aware of the fact that legal proceedings demand a significant amount of time and money, in addition to being costly in every other regard. The methods of conflict resolution used in mediation are more likely to result in lucrative outcomes than those used in courts.
Economic disagreements are one of the most typical cases brought before mediators. In recent years, the expansion of market relations has been the root cause of numerous disagreements across all countries. According to the remarks of the executives of “Toyota” and “Motorola,” both of which are among the most well-known corporations in the world, a significant portion of the disagreements that arise within these firms are handled with the assistance of mediation. As a result of the fact that mediation is not only lucrative in the corporate world but also frequently results from an objective requirement, it involves a limited amount of money, a modest amount of labour, and a short amount of time, and at the same time, the subject of the conflict is kept hidden, allowing for the possibility of continuing peaceful relations with the partners.
The need to resolve commercial conflicts in courts and the significant amount of money that is spent on legal proceedings both contribute to the growth of mediation in these countries. In this regard, it is necessary to take a look at the historical progression of mediation on its way to becoming such a common practice.
The Historical Development of the Mediation
The Mediation Rules throughout the History
The history of conflicts among human societies goes back at least as far as the history of mediation. People have always clearly grasped the simple truth that the best method to resolve disputes is through negotiation followed by arbitration by an intelligent and fair third party.
The ancient Sumerian period is when the earliest information about mediation in history have been discovered. Prior to being brought before a judge, issues that had disagreements were initially heard by neutral parties known as “mashkim”. The role of “Mashkim” was to assist the parties in finding a solution to their disagreement on their own.
On the other hand, ancient China was the place where the first concepts about mediation appeared in written form in old historical writings. On the banks of the Yellow River in China, 4,000 years ago, during the reign of King Shue, there was a dispute between people regarding the bounds of their land. This dispute occurred at the time that King Shue was in power. The locals who made their homes around the lakes in the region were at odds with one another over who should own the homes they had constructed there. Later on, the conflicts between the natives were brought to the attention of “literati”, who acted as a neutral third party and offered his counsel to help resolve the conflicts.
When it came to settling disagreements between different nations and states through diplomatic channels, the mediation mission played a particularly important part in ancient and mediaeval times.
The most popular approach to settling legal disagreements in ancient Greece was something that was called “public arbitration”. Despite the fact that the term “arbitrator” is being used in this context, the objective of the arbitrator was to assist the parties in resolving the issue between themselves. Only in the event that the parties were unable to come to an agreement would the arbitrator be in a position to render an impartial judgement regarding the resolution of the dispute, thus fulfilling the role of an actual arbitrator. Even, couples going through a divorce could receive approximately EUR 500 in vouchers to use toward mediation instead of litigation.
The resolution and enforcement of disputes were not the responsibility of the state under ancient Athenian democracy; rather, they were the responsibility of the civil society itself. This was one of the most significant aspects of the system. Every case was handled as a civil matter; disagreements were attempted to be settled amongst the parties involved; where this was not successful, the cases were brought before a judge.
During the reign of Justinian in ancient Rome, the legal system officially acknowledged the practice of mediation. In ancient Phoenicia, a region known for its thriving commercial activity, notably shipping, merchants were more likely to engage in the practice of mediation.
Before the Kings of Normandy established judges to trial issues, mediation was a prevalent practice in England, this was even before the Norman Conquest. Although the English common law, which developed as a result of the actions of judges, was initially unreliable, it gradually became more reliable through time, and as a result, parties to legal disputes started to rely on it. Yet, because legal proceedings could take a long time and cost a lot of money, parties were increasingly turning to alternative dispute resolution methods such as arbitration and mediation. At the beginning of the mediation process, there was just one meeting; but, later on, the number of meetings was increased, and the process developed even further. In addition, mediaeval English mediators believed that mediation could be a more effective method of alternative dispute resolution when it was private rather than public and when mediators expressed their views on the dispute at the end of the process.
In the end, techniques of conflict resolution that do not involve the judicial system were frequently developed by the courts themselves. As soon as there was a preliminary foundation for the agreement of the parties, the disagreement was submitted to a settlement process that would take place outside of court. Nonetheless, it was not until the second part of the 20th century that mediation became popular everywhere in the world. After beginning to play an important role in the settlement of civil, administrative, and criminal disputes in the United States, mediation spread to Austria, Germany, and a large number of other European countries. At the same time, institutionalized mediation services were established, and Austria even adopted a federal law on mediation.
In spite of the fact that mediation developed so rapidly in Europe, it took a long time for it to be incorporated into the legal system in the Caucasus region, mainly in the Republic of Azerbaijan. It was not until 2019 that the Parliament of Azerbaijan finally approved the Law on Mediation (hereinafter “the Law”) in Azerbaijan.
The Legal Approach to Mediation in Azerbaijan
The Mediation legislation in the Republic of Azerbaijan
As discussed before, mediation is a structured and interactive process in which an impartial third party assists the disputant in resolving a dispute using specific negotiation techniques. The goal of establishing the institution of mediation in Azerbaijan is to reduce the burden of litigation and the level of conflict between the parties and to provide a solution to the dispute in a way that satisfies the parties. As a neutral party, the mediator tries to facilitate rather than control the process.
Mediation of commercial disputes is significantly different from other types of mediation, but its main feature under the Law is that the final decision on the dispute must be made by agreement of the parties. It is no doubt that the main goal of the mediator here is to direct the parties to the dispute towards a solution.
According to Article 28.1 of the Law below:
“…before applying to the court for commercial disputes, the parties must participate in the initial mediation session. The initial mediation session is conducted by a mediator mutually agreed upon by the parties. In order to start the procedure based on the request for an initial mediation session, a party must submit to the other party an offer for the application of the mediation process. In that offer, a mediator (or a mediation organization) registered in the Mediation Council Register to be involved in the resolution of the dispute is presented. If the other party agrees to the involvement of the proposed mediator, that mediator is approached, and in this regard, the selected mediator sends a letter of invitation to the preliminary mediation session to the parties, with the time and place of the session being mutually agreed upon and the preliminary mediation session is held…”
If the other party does not respond to the offer, rejects the offer or does not agree on the mediator to be involved in the case,
“…after 10 (ten) business days from the offer, the case shall be referred to the mediation organization located in the same city where the court is located or in one of the nearest cities or districts. If there is no mediation organization located in the city or district as the court, or if it is not possible to consider the case in that mediation organization, the mediation organization appoints a mediator to conduct the initial mediation session based on the application of any of the parties. The appointed mediator sends a letter of invitation to the initial mediation session to the parties, mutually agreeing on the time and place of the session….”
If the parties or one of them does not participate in the initial mediation session or refuses to participate in writing,
“…the mediator shall draw up a “Certificate of Non-participation in the Initial Mediation Session”, noting the parties who participated in the session and those who did not. Unless otherwise agreed between the parties, the invitation to the initial mediation session must be served at least 5 (five) days prior to the date of the initial mediation session…” 
If one or both of the parties do not agree to continue the mediation process, as well as if the disputes affect the rights of third parties not participating in the mediation,
“…such disputes cannot be mediated. When those cases are discovered, the mediator (mediation organization), the parties or one of them refuse the mediation process on those disputes and the mediator terminates the mediation process and submits to the parties a “Statement of Inability to continue the process after the Initial Mediation Session”…”
When the parties decide to continue the mediation process,
“…a tripartite agreement on the application of the Mediation process and the provision of mediation services is concluded between the parties and the mediation process is carried out. When the parties sign a settlement agreement at the end of the mediation process, the mediation process is terminated. As the other sample documents used in the mediation process, the sample settlement agreement is posted on the Mediation Council‘s official website to help users…”
If the parties do not conclude a settlement agreement at the end of the mediation process,
“…as well as if the mediator refuses to carry out the mediation process according to the requirements established under Article 3.3. and 26.4 of the Law, the mediator terminates the mediation process and submits the relevant Protocol to the parties. After obtaining the “Protocol on Termination of the Mediation Process”, a party may apply to the Court and the application must be accompanied by the relevant Protocol…”
In the mediation process,
“…the mediator can hold meetings with all parties together or separately and give oral and written recommendations. In this case, the mediator should not take actions that put one of the parties in a superior position or limit their rights and duties…”
The parties may withdraw
“…from mediation at any time during the mediation process. The parties can participate in the mediation process directly or through their representatives. The parties can use the help of lawyers, translators, experts, and specialists in the relevant field during the mediation process. With the agreement of the parties, other persons can also participate in the mediation process…”
In the mediation process, the parties express their positions and proposals for the settlement of the dispute in writing or orally, and they agree on the terms of dispute resolution as below:
“…At any stage of the mediation process, the mediator may make a non-binding verbal or written offer to resolve the dispute. However, in the end, the settlement offer is made with the consent of the parties…”
When it comes to the charges and costs, the amount of the fee and the other costs for the provision of mediation services during the initial mediation session were approved by Resolution No. 308 of the Cabinet of Ministers of the Republic of Azerbaijan dated July 15, 2019 (hereinafter “the Resolution”). That decision determined the fee for providing mediation services during the initial mediation session depending on the claim price. In accordance with the Resolution, the fees of the disputes are categorized on the types and the claim price of the dispute itself. As an example, there are 3 main types of disputes which are based on family, labour and commercial relations. Meanwhile, the amount of postage, clerical and other current expenses incurred by the mediator or mediation organization in connection with the organization of the initial mediation session is determined as not more than AZN 10 based on the supporting documents.
According to the Article 24.7 of the Law:
“…the total duration of the mediation process may not exceed 30 (thirty) days. Taking into account the complexity of the dispute, with the agreement of the parties, the duration of the mediation process can be extended for another 30 (thirty) days. However, the specific duration of the mediation process is determined by the “Agreement on the Application of the Mediation process” taking into account the general period…”
The parties are expected to voluntarily carry out the settlement agreement terms reached during mediation. However, the applicant may seek judicial approval of the settlement agreement for compelled execution of the settlement agreement if one of the parties refuses to voluntarily discharge its obligations under the agreement. An application for the court’s approval of the settlement agreement must be filed within 10 days of the agreement’s entry into court.
If any provision of the settlement agreement violates the law, the court may refuse to approve the entire settlement. After the court rules on whether or not to approve the settlement, it issues a binding order that must be carried out in line with the law.
In addition, the Law specifies that the impartiality and autonomy of mediators are the primary guiding principles of the mediation process. Briefly, the mediation process is carried out in accordance with the Rules of Professional Ethical Conduct of Mediators approved by Resolution No. 384 of the Cabinet of Ministers of the Republic of Azerbaijan dated September 5, 2019 (hereinafter “Ethical Conduct Rules”), and the Rules for the Implementation of the Mediation Process, approved by Resolution No. 385 (hereinafter “Implementation Rules”). As it’s mentioned below in the Ethical Conduct Rules:
“…a mediator should not allow any person, including relatives, friends and acquaintances, to interfere in mediation activities in any form, at the same time, should not be under the influence of state and local bodies, legal entities and individuals, public opinion and/or criticism should not affect the legality and validity of its activity. So, when a mediator comes across information that may affect his impartiality, he must act according to the ethics filter…”
In the end, the development of the mediation institute during history and through different legislation and society of countries have been discussed in the article. Nevertheless, the first information regarding mediation as an institute has been found in Sumerian history; the first written evidence belongs to ancient China.
On the one hand, the ancient Greek approach to mediation accepts the freedom of the mediation institute from the state’s responsibility; on the other hand, the Roman approach was definitely acknowledging the existence of mediation practice in the legal system during the Justinian period.
Furthermore, the article discusses the points regarding the Law on “Mediation” in Azerbaijan, mainly the structure of the mediation process and the goals of establishing a mediation institute. In addition to the Law on “Mediation”, the article highlights the guiding principles of mediators stipulated in the Ethical Conduct Rules. Last but not least, the amount of fees and costs to provide mediation services during the mediation process have also been indicated in accordance with the Resolution by the Cabinet of Ministers.
The discussed points bring to light the fact that mediation is a well-structured institute for the reliable and effective resolution of disputes between business entities and gives the parties the opportunity to resolve their problems in a shorter period of time, in an informal setting, and at a lower cost than by going to court in Azerbaijan.
List of references
 Hendrik Bodker and Chris Anderson “Populist Time: Mediating Immediacy and Delay in Liberal Democracy”, <https://ijoc.org/index.php/ijoc/article/viewFile/11980/2889> last accessed on June 30, 2023
 Elena Ilie, Robert Chira and Gheorghe Marinescu, “Mediation in Entrepreneurship”, <https://www.researchgate.net/publication/277964529_Mediation_in_Entrepreneurship> last accessed on June 30, 2023
 Rafaella Rendl, “Mediation als Streitschlichtungsinstrument” Johannes Kepler Universität Linz, <https://epub.jku.at/obvulihs/download/pdf/4450131?originalFilename=true> last accessed on June 30, 2023
 Mediation notes.
 Mediate, The History of Mediation and Why is it still in use today? <https://mediate.com/the-history-of-mediation-and-why-it-is-still-in-use-today/> last accessed on March 31, 2023
 Mediation in China: Traditional Mediation has its origin and compromise to settle disputes <https://weinsteininternational.org/mediation-in-china/#:~:text=Traditional%20mediation%20has%20its%20origin,and%20compromise%20to%20settle%20disputes. > last accessed on March 31, 2023
 Matthaei, Louise E. “The Place of Arbitration and Mediation in Ancient Systems of International Ethics.” The Classical Quarterly, vol. 2, no. 4, 1908, pp. 241–64. JSTOR, <http://www.jstor.org/stable/636172> last accessed on June 30, 2023.
Ancient Greek Approach to Mediation < https://www.spectator.co.uk/article/the-ancient-greek-approach-to-mediation/ > last accessed on March 31, 2023
 Peter Jones, The ancient Greek approach to mediation, <https://www.spectator.co.uk/article/the-ancient-greek-approach-to-mediation/> last accessed on June 30, 2023
 Valeria A. Sanchez, Towards a History of ADR: The Dispute Processing Continuum in Anglo-Saxon England and Today <https://kb.osu.edu/bitstream/handle/1811/79734/OSJDR_V11N1_001.pdf?sequence=1 > last accessed on March 31, 2023
 Stephen E. Sachs, Conflict Resolution at a Medieval English Fair <https://www.degruyter.com/document/doi/10.1515/9783110446722-005/html> last accessed on June 30, 2023
 Dieter Heine, Mediation in Austria <https://www.lexology.com/library/detail.aspx?g=cd3bda60-3042-4f6c-b9fc-2469d7fecb98 > last accessed on March 31, 2023
 Austrian Mediation Act < https://www.viac.eu/images/law/Austrian_Mediation_Act.pdf > last accessed on March 31, 2023
 Under Article 15.1 of the Law “On Mediation”, the Mediation Register is maintained by the Mediation Council “for the purpose of determining the list of mediation organizations, mediators and mediation training institutions”.
 Under Article 11.1 of the Law, for the purpose of development and improvement of mediation, the mediation organization is a legal entity that determines the rules for the marketing of mediation services, the payment of fees and other costs for the services of mediators with whom it has concluded an employment contract or a relevant service contract creates conditions for conducting negotiations during mediation and appoints mediators to conduct the mediation process in the cases defined by this Law or the agreement of the parties.
 Article 29.2 of the Law.
 Article 29.3 of the Law
 Article 29.5 of the Law
 Under Article 18.1, The Mediation Council is a non-commercial legal entity created on the basis of mandatory membership of mediation organizations, mediators and mediation training institutions, and performs its activities on the principle of self-management.
 Article 3.3. and 26.4 of the Law
 Article 12.1.3 of the Law
 Article 9.1.3 of the Law
 Article 33.1 of the Law
 Under Article 1.0.8 of the Law, a written agreement between the parties to resolve a dispute (current or future) through a mediation process.
 Article 355-25.1 of the Code of Civil Procedure of the Republic of Azerbaijan.
 Article 4.2.3 of the Law.
 Article 3.8.5 of the Ethical Conduct Rules.
This article is written within the Academic Essay Project (AEP) organised by LAWELS. AEP aims to increase the number of quality academic writings on legal topics, encourage young lawyers to participate in academic writing, and lay the foundation of an online database on legal science. The team of legal editors and legal writers share their knowledge through high-end essays that we are publishing on our website and social media accounts for the world to read and learn from.
The articles on the LAWELS platform are not, nor are they intended to be legal advice. You should consult a lawyer for individual advice or assessment regarding your own situation. The article only reflects the views of the author.