In Part I of this article last issue, we discussed how mediation, in the form most commonly practised in Hong Kong and other jurisdictions, is beneficial to parties. In Part II, we use a case study to illustrate how mediation can help parties to resolve conflicts.

Let us take an example of a manufacturer’s action against a customer for $X in unpaid garments sold and delivered, bearing the latter’s trade mark. The customer’s argument was that the garments were defective, allowing it to reject them or alternatively counterclaim $Y for damages. It would only pay $X less $Y. The parties negotiated through their lawyers, but were unable to find a number at which to settle.

Underlying interests. During mediation, it transpired the parties had the following underlying interests:

The manufacturer wanted a greater number of buyers and more orders. If the garments were rejected, it would first need to remove the trademark before reselling them. Besides not being paid $X, this process would result in further losses. Without the $X, the entire business would be affected due to cashflow problems.

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CW Ling, a barrister, is the honorary secretary of Hong Kong Mediation Council (a division of the Hong Kong International Arbitration Centre) and an accredited mediator; Stephanie Cheung, a solicitor, is a council member at Hong Kong Mediation Council and an accredited mediator