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2ADDRESSING THE ABUSE OF RIGHTS AND UNFAIR PRACTICES IN
MEDIATION PROCEDURES
Begmatova Sevara Mustafayevna
Doctoral student of the Higher School of Judges at The Supreme Judicial Council of the Republic of Uzbekistan liebevoll [email protected]
Annotation: This article analyzes the concepts of rights abuse and unfairness, along with various scholars' perspectives on these issues. Additionally, it addresses the problems that may arise from rights abuse and unfair practices by the parties involved and the mediator during the implementation of mediation procedures, as well as solutions to mitigate these issues. Recommendations for enhancing our national legislation in this area are also presented.
Keywords: rights abuse, unfairness, principles of mediation procedures, statute of limitations, mediator's liability, mediated agreement, form and content of the mediated agreement.
In recent years, our country has made significant efforts to promote the widespread use of mediation procedures. It is no exaggeration to say that a sufficient normative and legal framework has been established in this area. This institution offers numerous unique advantages, including the ability to enhance the business environment among participants in economic relations and to resolve emerging disputes by reaching mutually acceptable solutions.
However, the misuse of this procedure for unintended purposes represents a distinct form of abuse of procedural rights. Investigating the causes of such improper use and developing specific and reliable recommendations to address these issues are pressing tasks at present.
The concept of "abuse of rights" is applied both in general legal theory and in specific areas of public and private law2. According to E.V. Vaskovsky, abuse of procedural rights is manifested in the actions of unscrupulous individuals who intentionally file unfounded lawsuits, complain about fair judicial decisions, and engage in other similar behaviors3.
V.O. Abolinin emphasizes that the concept of "abuse of rights" emerged in the first half of the 19th century within French civil law. The term "abuse de droit" was
2 Поротикова, О. А. Проблема злоупотребления субъективным гражданским правом / О. А. Поротикова. -Москва : Волтерс Клувер, 2007. - 117 с.
3 Васьковский, Е. В. Учебник гражданского процесса [Текст] / Е. В. Васьковский ; под ред. В. А. Томсинова. -Москва : Зерцало, 2003. - С. 183.
first used by Belgian jurist F. Laurent to describe typical, recurring situations in which a rights holder acts with malicious intent4.
Although this term emerged in the 19th century, its roots trace back to Roman law. E.V. Vaskovsky emphasizes that the concept of abuse of procedural rights in Rome was expressed by the term "clausula"5.
Abuse of rights is understood as the use of rights in a manner that is inconsistent with their intended purpose. According to A.V. Yudin, abuse of civil procedural rights refers to the intentional actions of unscrupulous participants in the civil process. Although these actions may appear to be an exercise of those rights, they should be interpreted as deceit regarding known facts of the case, as well as restrictions or violations of the rights of other participants. Additionally, such actions are aimed at obstructing the court's ability to conduct a proper and timely review and resolution of the case6.
In summary, it can be concluded that abuse of rights represents an initially unlawful behavior by an individual, manifested in the unreasonable exercise of their rights.
One of the key aspects of "bad faith" that manifests during the mediation process is the malicious behavior of a party who has concluded a mediation agreement but failed to fulfill it. The non-execution of the mediation agreement effectively undermines the efforts of the mediator and the parties to the agreement, leading to a loss of its value.
When analyzing our national legislation, it becomes apparent that there are no provisions addressing the prohibition of abuse of rights or bad faith use of rights. Although this issue is not explicitly stated, the fifth part of Article 9 of the Civil Code of the Republic of Uzbekistan7 prohibits causing harm to others, abusing rights, and exercising rights contrary to their intended purpose. Additionally, according to the third part of Article 40 of the Civil Procedure Code8 (CPC) and Article 42 of the Economic Procedure Code9 (EPC), participants in the process are required to use all granted procedural rights in good faith and fulfill their obligations. However, these norms do not guarantee that the exercise of rights and obligations will remain within the bounds of good faith.
In the protection of violated or disputed rights, particularly through the mediation process, which is considered one of the alternative methods for dispute
4 Аболонин В. О. Злоупотребление правом на иск в гражданском процессе Германии. М.: Волтерс Клу- вер, 2009. С. 55.
5Васьковский Е. В. Курс гражданского процесса: субъекты и объекты процесса, процессуальные отно- шения и действия. М.: Статут, 2016. С. 605.
6 Юдин А. В. Злоупотребление процессуальными правами в гражданском судопроизводстве: автореф. дис. ... д-раюрид.наук. СПб., 2009. С. 10.
7 Узбекистан Республикаси Фукаролик кодекси, 10-модда/ https://lex.uz/docs/111189/
8 Узбекистон Республикаси Фукаролик процессуал кодекси,40-модда // https://lex.uz/docs/3517337
9 Узбекистон Республикаси Иктисодий процессуал кодекси, 42-модда//https://lex.uz/docs/3523891
resolution, the principle of good faith is regarded as one of the fundamental principles (Article 3 of the Law of the Republic of Belarus "On Mediation"10, Article 3 of the Law of Georgia "On Mediation"11). However, when resolving disputes through the mediation process, there may often be threats to its implementation in good faith. In such cases, it is crucial to protect the core principles of good faith and honesty within the mediation process (the principle of good faith is not reflected in the Law of the Republic of Uzbekistan "On Mediation"). Otherwise, the mutual trust between the parties in the dispute may weaken, leading to a loss of confidence in the mediation process.
To further enhance the effectiveness of the application of the mediation institution, it is advisable to reinforce the principles reflected in the regulatory legal documents of various foreign states concerning the mediation institution, particularly those governing mediation in the Republic of Belarus and the State of Georgia. Specifically, it would be appropriate to strengthen the legal regulation of mediation with the principle of good faith on the part of both parties and the mediator during the mediation process.
The main goal of mediation is to ensure that the final result of the mediation process, namely the mediated settlement, is reached and executed in good faith. Only under these conditions can the intended objectives of mediation be achieved and guaranteed.
Parties' bad faith behavior in the field of mediation can manifest in various forms depending on the stage of the mediation process, the composition of participants, and the nature of the dispute. These issues can be categorized into the following groups:
• Objective challenges arising from the specific features of legal regulation;
• Bad faith conduct by a party during the mediation process;
• Lack of good faith by the mediator during the mediation procedure;
• Bad faith behavior by the parties during the enforcement of a mediated settlement.
One of the key aspects of "bad faith" displayed during the mediation process is the malicious conduct of a party who enters into a mediated settlement but subsequently fails to fulfill its obligations. Failure to execute the mediated settlement effectively nullifies the efforts of the mediator and the parties involved, undermining the value and credibility of the mediation process.
In practice, when considering the application of mediation during court proceedings, it can be observed that the law grants parties the right to resolve the
10 Белорус Республикасининг "Медиация тугрисида"ги Крнуни, 3-модда// https://zakony-by.com/zakon_rb_o_mediatsii/3. htm
11 "Медиация тугрисида"ги Грузия Конуни, 3-модда// https://matsne.gov.ge/ru/document/download/4646868/0/ru/pdf
dispute by reaching a mediated settlement and having the court issue a ruling to dismiss the claim without hearing it (as stipulated in Article 107, Paragraph 53 of the Civil Procedure Code). In such cases, the defendant's primary goal may not be to genuinely resolve the dispute through the alternative method of mediation but rather to exploit the process to delay the time period specified in the mediated settlement. This would allow the statute of limitations to expire. If the claimant later files another lawsuit due to the failure to comply with the terms of the mediated settlement, the defendant may request the court to apply the statute of limitations, thereby evading their obligations. This constitutes an abuse of the right to resolve the dispute through a mediated settlement, using it in bad faith for personal advantage.
It is known that mediated settlements between parties often include a provision for their implementation over a certain period (e.g., 3 months, 6 months, etc.). However, since these periods are not included in the list of circumstances that pause the running of the statute of limitations, defendants may file motions to apply the statute of limitations in response to repeated claims based on the failure to fulfill the mediated settlement. In such cases, courts often grant these motions, which can result in the claimant's rights being restricted to some extent, as the statute of limitations is applied despite the mediated settlement.
To address the issue mentioned above, we recommend amending the first part of Article 156 of the Civil Code of the Republic of Uzbekistan by adding a new clause 7 with the following content:
Article 156. Suspension of the statute of limitations The running of the statute of limitations shall be suspended in the following cases:
7) When a mediated settlement has been reached between the parties regarding the dispute, resulting in the dismissal of the claim without consideration, and the claimant subsequently files a repeated claim with the court on the same dispute between the same parties, concerning the same subject matter, and based on the same grounds, due to the failure of the mediated settlement to be executed in accordance with the agreed terms and within the specified period.
To further enhance the effectiveness of the mediation institution, we believe it is appropriate to strengthen it by incorporating the principles reflected in the regulatory legal frameworks of various foreign states, particularly those governing mediation in Switzerland, the USA, Kazakhstan, and Ukraine. Specifically, we recommend including principles regarding the mediator's liability for damages resulting from their conduct during the mediation process.
This is important because mediation is carried out based on the principle of confidentiality, which requires the parties involved not to disclose any information they become aware of during the mediation process. The disclosure of such
information could lead to legal consequences, which cannot be overlooked. Therefore, any breach of confidentiality should result in liability.
Incorporating the principle of mediator liability into national legislation would contribute to the effective and high-quality resolution of disputes and serve as a guarantee of the efficiency of the judicial process.
To further strengthen the aforementioned principle in legislation and enhance the effectiveness of its legal mechanism, we propose adding a new Article 132 to the Law of the Republic of Uzbekistan on Mediation, which addresses the liability of mediators.
Article 132. Liability of the Mediator
The mediator shall be liable as follows:
1. In the event of a breach of obligations under the mediated settlement, the mediator shall be held liable in accordance with the applicable laws and regulations.
2. The mediator shall be responsible for any damages incurred as a result of conducting the mediation process, as established by legislation.
3. If the mediator fails to adhere to professional ethics and standards, they shall be subject to the liabilities outlined in the statutes or regulations of the mediator association to which they belong.
This addition aims to clarify the responsibilities of mediators and ensure accountability within the mediation process.
Additionally, it is advisable to include the principle of the mediator's liability for damages resulting from their activities in conducting mediation in the list of principles outlined in the law. This is important because the mediator is held liable for any harm caused to the parties as a result of the mediation process, in accordance with the applicable laws.
However, the mechanism for holding mediators accountable in relation to the formation of mediated settlements has not been sufficiently developed in either the law or subordinate legislation. Furthermore, the law explicitly states that the mediator's activities do not have a commercial nature (as specified in Article 12, Part 5, Clause 5 of the Law on Mediation). Therefore, the mediator is only liable if they are found to be at fault for failing to fulfill their obligations adequately (as per Article 401, Part 1 of the Civil Code). Consequently, the mediator is only liable with their own property if they cause harm to the parties in the process of resolving disputes.
The inability of the mediator to fully assume civil liability can lead to inequality among the subjects involved in the relationship. Consequently, this situation undermines the principle of fairness. We believe that the law should include a requirement for mediators to insure the risks of civil liability before the participants of the mediation process, as well as mechanisms to guarantee such insurance.
It is evident that a mechanism for professional liability insurance would help ensure the equality of rights among participants in the mediation process. Implementing this principle would further embody the notion of justice within the regulatory framework governing these relationships.
According to Article 14 of the law, the mediator is liable for any damages caused as a result of conducting the mediation process, in accordance with applicable legislation. However, including this obligation in the list of mediation principles indicates that liability for damages arising from the mediator's actions is inevitable, thus placing responsibility on both the participants and the mediator within the mediation process.
Therefore, it is recommended to amend Article 5 of the Law of the Republic of Uzbekistan on Mediation as follows:
Article 5. Basic Principles of Mediation
Mediation is conducted based on the principles of confidentiality, voluntariness, cooperation, and equality of the parties, as well as the independence and impartiality of the mediator. It also includes the principle of informality and the mediator's liability for damages resulting from their conduct during the mediation process.
Certain gaps and unregulated situations observed in the Law of the Republic of Uzbekistan on Mediation are contributing to the emergence of corruption in the court proceedings and a significant decrease in the amounts of state fees collected.
According to S. Nikolyukin, mediation is primarily conducted in a confidential manner, which allows the parties involved to discuss issues openly and propose solutions without the risk of disclosing sensitive information related to their business activities or other confidential matters. Additionally, the independent selection of the mediator is a key aspect of successful mediation. The mediator must be impartial and possess relevant knowledge and experience in the economic field. They should effectively manage the communication process during mediation and assist the parties in finding common ground12. In this regard, we fully agree with the author's perspective. The primary goal of the mediation process is to maintain amicable relations between the parties involved and to further strengthen future business collaborations.
According to research, from 2020 to 2023, a total of 11,134 economic cases with a claim amount exceeding 50 trillion soums were dismissed by economic courts due to the conclusion of mediation agreements. As a result, the parties were exempted from approximately 1 trillion soums in state fees that would have otherwise been payable.
12 Николюкин С., 2022. Правовые технологии посредничества (медиации) в Российской Федерации: научно-практическое пособие. Litres.
Of the economic cases dismissed based on mediation agreements, 3,545 cases (30%) are related to banks, while 538 cases (5%) pertain to leasing organizations.
According to the data, in many cases, representatives of banks and leasing organizations file lawsuits to recover overdue payments. However, debtors manage to reach mediation agreements in exchange for providing material benefits to these representatives, which can amount to 30-50% of the state fee.
It is noteworthy that, according to the current legislation, when a mediation agreement is reached, the economic case is considered not to have been reviewed by the court. As a result, the claimant's right to protection is not guaranteed.
Therefore, in most cases where a lawsuit is dismissed due to the conclusion of a mediation agreement, the parties' true intention is not to fully resolve the dispute through such an agreement but rather to avoid the payment of state fees.
As a result, there have been instances where parties have repeatedly filed lawsuits with the courts based on the failure to fulfill the terms of mediation agreements in many cases that were dismissed due to mediation.
The parties' use of their rights to establish mediation agreements, followed by the exploitation of those agreements, is resulting in an increase in court case loads instead of reducing them as intended.
For example, in 2023, there were more than 10 cases dismissed in court based on mediation agreements between 'Agrobank' and 'FOR TRANS LLC,' 3 cases between 'Xalq Bank' and 'Uzagrolizing JSC,' and 2 cases between 'Uzmilliybank' and 'Art Soft Tex Spinning LLC.
During the period from 2020 to 2023, when the inter-agency working group examined compliance with the legislation on state duties in the courts, it was found that 11 legally binding decisions were annulled contrary to legal requirements, even in the absence of new cases. This was due to mediation agreements, resulting in the failure to collect state duties amounting to 3.3 billion soums.
Specifically, by the decision of the Boysun District Court on November 21, 2018, the 'National Bank' collected a loan debt of 8.6 billion soums from 'Boysun-Surkhon Agrofirm' LLC, with the collection directed towards the real estate that served as collateral.
In practice, there are instances where mediation agreements are being used not as a means to resolve disputes between the parties, but rather as a way to evade state duties. This, in turn, contradicts the very essence of mediation and represents yet another form of its misuse.
To prevent such situations, it is advisable to establish a legal provision stating that if a dispute between the parties is resolved after a lawsuit has been filed (with the defendant satisfying the plaintiff's claims), mediation agreements should not be allowed. Additionally, the court should continue to examine the case on its merits,
and any requests from the parties to dismiss the lawsuit based on the formation of a mediation agreement should be rejected. This should be noted in the conclusion section of the relevant ruling.
The fact that the parties have entered into a mediation agreement should not automatically lead the court to dismiss the lawsuit without consideration. This is because parties may sometimes aim to evade state duties or pursue other ulterior motives by entering into such agreements. Therefore, when deciding whether to dismiss a lawsuit based on the parties' agreement, the court must consider several factors, including whether the form and content of the mediation agreement have been complied with, whether the interests of third parties are being violated or threatened, and whether its terms are in accordance with the law.
Thus, it is essential for the Economic Procedural Code of the Republic of Uzbekistan to have a specific article that regulates these matters, as this will encourage parties to approach the formation of mediation agreements responsibly and in compliance with the law while considering the interests of others.
Based on the above, it is advisable to introduce a new Article 161 (On the Form and Content of Mediation Agreements) to the Law on Mediation of the Republic of Uzbekistan, as well as to add Article 1321 (Form and Content of Mediation Agreements) to the Economic Procedural Code.
The exploration of rights abuse and unfair practices in the context of mediation procedures reveals significant challenges that undermine the integrity and effectiveness of this alternative dispute resolution method. Despite the legislative framework established in Uzbekistan to promote mediation, gaps in the legal provisions concerning the prohibition of rights abuse and the principles of good faith lead to misuse of the mediation process. This exploitation can manifest in various forms, from bad faith conduct by the parties to the potential negligence of mediators, ultimately eroding trust in mediation as a viable solution for dispute resolution.
To combat these issues, it is essential to incorporate robust legal provisions that explicitly address the prohibition of rights abuse and reinforce the principle of good faith. By amending existing laws to include clearer guidelines on the responsibilities of mediators and parties involved in mediation, we can safeguard the process against manipulation for personal gain.
Moreover, introducing specific measures such as the suspension of the statute of limitations in cases of mediated settlements and establishing mediator liability can significantly enhance the accountability of all parties. This will not only protect the rights of disputants but also promote a culture of responsibility and ethical conduct in mediation.
Ultimately, the goal of reforming the mediation process should be to create a fair, transparent, and efficient system that reflects the core principles of justice,
integrity, and mutual respect. As Uzbekistan continues to evolve its mediation framework, the integration of these recommendations will play a crucial role in fostering an environment where mediation is not only recognized but effectively utilized as a legitimate and honorable means of dispute resolution.
References:
1. Поротикова, О. А. Проблема злоупотребления субъективным гражданским правом / О. А. Поротикова. -Москва: Волтерс Клувер, 2007. - 117 с.
2.Васьковский, Е. В. Учебник гражданского процесса [Текст] / Е. В. Васьковский; под ред. В. А. Томсинова. - Москва: Зерцало, 2003. - С. 183.
3.Аболонин В. О. Злоупотребление правом на иск в гражданском процессе Германии. М.: Волтерс Клу- вер, 2009. С. 55.
4.Васьковский Е. В. Курс гражданского процесса: субъекты и объекты процесса, процессуальные отно- шения и действия. М.: Статут, 2016. С. 605.
5.Юдин А. В. Злоупотребление процессуальными правами в гражданском судопроизводстве: автореф. дис. ... д-ра юрид.наук. СПб., 2009. С. 10.
6. Узбекистон Республикаси Фукаролик кодекси, 10-модда/ https://lex.uz/docs/111189/
7.Узбекистон Республикаси Фукаролик процессуал кодекси,40-модда // https: //lex.uz/docs/3 517337
8. Узбекистон Республикаси Иктисодий процессуал кодекси, 42-модда//https: //lex.uz/docs/3523891
9.Белорус Республикасининг "Медиация тугрисида"ги ^онуни, 3-модда// https: //zakony-by.com/zakon_rb_o_mediatsii/3 .htm
10. "Медиация тугрисида"ги Грузия ^онуни, 3-модда// https://matsne.gov.ge/ru/document/download/4646868/0/ru/pdf
11. Николюкин С., 2022. Правовые технологии посредничества (медиации) в Российской Федерации: научно-практическое пособие. Litres.
