Businesses, officials, coaches and athletes have traditionally turned to litigation and arbitration as the first resort when negotiations become deadlocked. However, the adversarial nature of litigation and arbitration frequently drives these protagonists further apart as they compete to win the case.
But, sadly, a case won or lost often does not change the mindset of parties who continue to be adversaries and go on fighting in appeal after appeal. Motivated by the high costs, delays, stresses and uncertainties associated with litigation and arbitration, business is increasingly turning to mediation as the first resort – and they are normally right to do so.
In sports-related disputes, national and international sporting institutions, such as the Court of Arbitration for Sport, are now actively encouraging parties to attempt mediation at the earliest opportunity. The World Intellectual Property Organisation, which offers sports-related intellectual property dispute resolution services in sponsorship, merchandising and broadcasting also promotes mediation.
Despite its public promotion, common misperceptions about mediation persist. For example, that it is a soft option that often only involves splitting the difference, or that it gives the impression that an athlete, coach or business is weak or exposed. As a result, opportunities to find the most satisfactory deal, while maintaining valuable business relationships over the longer term, may be missed.
Mediation is a process by which a neutral person – someone not connected to either party – assists athletes, team representatives, officials or business people, whose negotiations have reached a deadlock, to resume negotiation and work constructively towards a resolution of their dispute or difference.
In stark contrast to litigation and arbitration, which typically try to put the parties into the position they were in before the dispute, mediation endeavours to put as wide a spectrum of solutions as the parties are prepared to consider onto the negotiating table. The ambition is to use the process to assist all parties to better understand the other’s underlying legal, commercial and personal interests, and to contribute to future and stronger business ties.
Skillful mediator
Relationship building is particularly important in sport where the athlete, team and coach relationship is an important factor affecting performance. This also is true in business where considerable time and money is spent building relations that ensure the long term success of the business. The detrimental effect on relations is typically a disincentive to enter into, or an adverse by-product of, litigation or arbitration.
Litigation, arbitration and mediation encourage parties to confront each other. However, a skilful mediator can minimise any deterioration in relations and assist each protagonist to better communicate the legal, commercial and often personal issues at stake in the negotiation. The dynamic of discussion is primarily focused on assisting each party to generate a variety of options, which best address the interests of the other party and thus, identifies a deal satisfactory to both parties.
Moreover, disagreeing parties are considerably more likely to adhere to mediated agreements, as opposed to court or arbitral tribunal imposed outcomes, which are often subject to appeal after appeal.
Of course, mediation is not a universally appropriate process. Litigation or arbitration is sometimes a better option. The key to the successful use of mediation is knowing whether and when to use it.
Clearly, if there is complete deadlock, no genuine interest to settle, a need to establish a precedent or a need for court protection of assets, mediation may not be the solution. However, it is apparent that many common concerns about mediation are actually misconceptions.
When equipped with quality legal counsel, the focus of mediated discussions is always on commercial options, with litigation and arbitration only used if a negotiated settlement cannot be reached. Mediation has settled numerous sporting matters, including facility design and construction, player sponsorship and licensing.
Global giants
In the Middle East, there has been huge investment in bringing sports into the region over the last 25 years. A recent report by Repucom, a provider of sporting intelligence, stated: “The Middle East and Asia are emerging as global giants in sports sponsorship and ownership and this trend shows little signs of slowing”.
Repucom also concluded that the UAE is the largest single-jurisdiction source of title sponsorship funding in professional sports globally, with 37 per cent of global investments in sport coming from the UAE.
According to a PwC report, the EMEA market is currently ranked as the second largest sports market in the world, and is worth an estimated $44.8 billion, which represents nearly a third of the global market.
In such a valuable and commercial industry, the types of dispute that can arise are varied and often involve complex legal issues. Reputation and relationships are key to maintaining a place in this market.
Given this dynamic, mediation should always be an option for any dispute given its primary advantage is to encourage parties to focus on devising commercial solutions that best meet their interests and preserve relationships, with litigation or arbitration prospects informing only whether there is a better alternative to a negotiated offer.
The writer is an Associate and member of Al Tamimi’s Sports Law practice.
