MEDIATION PROBLEM

General Information
(1st Preliminary Round)

Fatima Bidhen Ltd v Melanie Donald Enterprise

 IN THE MATTER OF FATIMA BIDHEN LTD V. MELANIE DONALD ENTERPRISE

GENERAL INFORMATION

THE PARTIES

1. Fatima Bidhen is a well-known fashion turned business icon in Malaysia. She

is a social media influencer in the area of personal development. She also
helms her company under the business name, Fatima Bidhen Ltd. She was
the first person in Malaysia to gain over 7 million followers on Instagram and
Twitter. The majority of her followers are of the Islamic faith because she is
vocal about her strong preference for sharia practices in her business
dealings.

2. For her company, Fatima Bidhen Ltd, she implements shorter working days,
allowing her staff more time off for their personal development pursuits and to
spend more time with their families. Therefore, her staff only work for 4 days
per week instead of the usual 5 days. She believes that this would increase
both productivity and morale, and retain talent longer. Additionally, she is a
proponent of performing charitable activities and her company organises
monthly CSR activities for underprivileged shelter homes. Her staff have
always been pleased to contribute and participate in such activities.

3. Fatima’s actions have influenced a huge number of start-up companies in

Southeast Asia to implement similar practices and principles in their talent
retention and business strategy.

4. Business-wise, Fatima Bidhen Ltd owns and manages several rental

portfolios including accommodation rental, office space rental, storage rental
and vehicle rental. The company currently operates in the markets of
Malaysia, Indonesia and Thailand and wishes to expand their portfolio,
particularly that of vehicle rental, to Singapore. Fatima views this as a
promising business opportunity because the majority of Singaporeans do not
own cars. For this reason, Fatima has approached the Singapore based
Melanie Donald Enterprise for a potential business collaboration.

5. Melanie Donald Enterprise is known for its successful vehicle rental business
in Singapore. Melanie’s consumer appeal lies in her business’ focus on low
emission, hybrid and electric road vehicles. Melanie has good working
relationships with several low-cost carriers operating within the SEA region,
including AirASEAN, StarryJetAirlines, BirdAir, and Skeet Airways. This
working arrangement offers customers of the airlines, various attractive
vehicle rental packages and rates, when booking their airflight tickets. Melanie
also has a tourism licence which allows her to offer vehicle rentals with
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 drivers. As a result, Melanie Donald Enterprise’s customer base has
increased by about 50% in the past few years.

6. Melanie Donald Enterprise has faced numerous law suits for the company’s
mistreatment of their employees on grounds of unjust dismissal and unfair
practices. This does not seem to affect the company’s brand and customer
base. However, Melanie’s employee retention rate is low and it is affecting her
bottom-line costs. She also sees that it may potentially impair her company’s
public image. Melanie sees that a collaboration with Fatima may help her out.

7. Following several preliminary discussions held via telephone calls between

Fatima and Melanie, the two of them finally met for a for formal discussion
between their respective companies on 3rd January 2021. Fatima and Melanie
agreed to collaborate in a joint venture, to hire-purchase and rent out vehicles
in Singapore. The paper work was drawn up and signed by them both, based
on the agreement that both liabilities and profits will be shared equally. Fatima
left Singapore the same day, and told Melanie to go ahead with the financing
and licencing work necessary. Excited about the business prospects, Melanie
organised a press conference on 5th January 2021. A transcript excerpt
follows:

Melanie: We are happy to announce that we will collaborate with Fatima

Bidhen Ltd to offer the people of Singapore vehicle rental
services of the highest and certainly, cleanest quality.
Reporter: Would you be implementing her 4 days per week working policy,
for the employees of your collaboration, based in Singapore?
Melanie: Unfortunately, any working policy under 5 days per week is
incompatible with our company DNA and will not be
implemented. We are best known for our culture of diligence and
we want to be there for our customers 24 hours per day, all 7
days of the week. Our employees are aware of this and they are
truly committed.
Reporter: What about Fatima’s advocacy for a business model based on
modern day Islamic principles? Is that part of your agreement?
Melanie: We have not yet discussed that. On behalf of my company, well
we have never implemented such a business model, and I am
certainly unfamiliar with it. I believe that it is generally
unprofitable but we will see. At this early stage, who knows?

8. Melanie Donald Enterprise promptly sent in applications for hire purchase

loans from CIBB Bank on 6th January 2021 to purchase 30 brand new road
vehicles (10 low carbon emission sport utility vehicles, 10 hybrid sedans, and
10 compact fully-electric cars).

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9. Within a few days, the press conference had gone viral all-over social media.
Fatima was shocked because she was neither invited nor informed about the
press conference. Fatima was furious because her followers had started to
leave nasty comments on her social media accounts.

10. Some of her followers started the #FatimaHypocrite hashtag on social media
and a rumour spread that she altered her business model and that her
collaboration with Melanie will not be based on the expected sharia practices.
The rumour mill also spread that she had only paid lip service to her 4 days
working policy. On Twitter, tweets that “she is no different from any other
capitalist” and that “she seeks profit first, ethics second” gained traction. This
has greatly affected her credibility.

11. Tired of these rumours, on 15th January 2021, Fatima organised her own
press conference in Malaysia. The transcript excerpts are as follows:

Fatima: We are a proud advocate of better treatment for our employees.

We are a proud advocate of Islamic principles in doing business.
An ethical practice has been and will always be our main priority.
Reporter: Good on you but this is inconsistent with Melanie’s prior press
conference. The collaboration between you and Melanie Donald
Enterprise would not be first based on Islamic principles, with
maximum profits taking a secondary seat. What do you say?
Fatima: Well, as I have earlier said, we at Fatima Bidhen Ltd will always
incorporate policies based on Islamic principles in all of our
businesses. This is a well-known fact. I firmly believe in only
doing business based on ethics and values, free from ill serving
items, products and materials sourced with interest-based debts,
in treating my employees well, and in acts of charity and giving
back. This was the basis of my attraction to collaborate with
Melanie Donald Enterprise. Honestly, I believed that Melanie
and her team already understood this and they would have no
issues in implementing such policies. Unfortunately, that does
not seem to be the case. As such, the fault here is not ours.
Reporter: So, what now is the prospect of the agreement between your
companies? Would you be willing to end your collaboration
today or would you simply continue on with it for the sake of
profit?
Fatima: There is no room for discussion if Melanie Donald Enterprise
refuses to implement our policies. We will only continue our talks
if Melanie agrees to this and we hope, that she shares our point
of view that it would be best if she considers incorporating these
polices in all her business ventures apart from our collaboration.

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12. Fatima’s press conference was all over the internet within one day and was
picked up by many news accounts. Melanie was shocked by the position
taken by Fatima. She did not think it was reasonable that Fatima would go so
far as considering to terminate their contract over such a small
misunderstanding.

13. Following the press conference, on 17th January 2021, Fatima instructed her
lawyer to send a letter to Melanie Donald Enterprise. Her main demands were
that Melanie shall immediately issue a public apology and clarify that their
collaboration will incorporate modern day Islamic principles where applicable
including a 4-day work week, and that Melanie shall compensate her for the
libel she has personally suffered as well as the loss of her business’
reputation, collectively in the sum of SGD1,000,000.00.

14. Melanie is unhappy upon receiving Fatima’s letter dated 17th January 2021.
She is certain that Fatima had never mentioned about the incorporation of any
such modern-day Islamic principles or working conditions for their employees,
during the course of their preliminary discussions. After sitting on the letter for
a few days, she finally responded with an irate email on 20th January 2021.
Melanie’s email is reproduced as follows:

Dear Ms. Bidhen,

I refer to your letter dated 17th January 2021 and acknowledge your
willingness to continue with our Singapore joint venture project, but your
demands in order to do so, are in our view, excessive.
I wish to put on record that at no point during our preliminary talks or even
during the course of the formal discussion between our companies, was the
issue of incorporating Islamic or Shariah principles in our business model ever
raised. I must say upon hearing your views, I am leaning towards an
objection.
I also wish to apprise you that the team at Melanie Donald Ltd is in the midst
of actively negotiating financing agreements with CIBB Bank for the purchase
of 30 rental vehicles. These efforts are upon my company’s reliance on our
agreement. In the event you now wish to back out, we will be seeking
compensation for the loss of opportunity cost and a loss of profits suffered, as
we could have discussed a collaboration with other interested parties.
To iron out the details of our joint venture going forward or the termination
thereof (if it comes to that) I propose a formal mediation session.
Finally, it is not for the likes of you to comment on how I run my other
ventures. Please know that I will also be seeking legal advice on whether your
unsolicited comments amount to slander.

15. At first, Fatima would not even deign to reply to Melanie’s email. She felt
insulted as Melanie did not address the damage caused to her reputation by
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 Melanie’s actions. Thus, she had her reservations about Melanie’s attitude.
However, upon the encouragement of her legal team, she agreed and
instructed her lawyers to commence the mediation.

COMMENCEMENT OF MEDIATION

16. Following back and forth correspondences between the legal representatives
for Fatima Biden Ltd and Melanie Donald Enterprises, the Parties agree to
attempt mediation under the AIAC Mediation Rules 2018 and further, for the
Director of the AIAC to appoint their mediator.

17. On 9th February 2021, Fatima Biden Ltd submitted a Request for Mediation to
the AIAC containing the information and/or documentation specified in Rule
2(1) of the AIAC Mediation Rules which was then subsequently acknowledged
by AIAC. In the Request for Mediation, both Parties also indicated their
agreement for the Director of the AIAC to appoint the Mediator.

18. The Director of the AIAC proceeds to nominate Ms. Nurul Hermione for
appointment as the Mediator from the AIAC Panel of Mediators. With a
background in international commercial dispute resolution, Ms. Nurul
Hermione has assisted, by way of mediation, in the resolution of many
complex disputes.

19. Upon her signing a statement of independence and impartiality, on 19th

February 2021, the Director of the AIAC confirmed the appointment of Ms.
Nurul Hermione as the Mediator pursuant to Rule 5(1) and Rule 6 of the AIAC
Mediation Rules. The AIAC further confirmed that both Parties had paid their
respective deposits in full. The AIAC then transmitted all relevant files
pertaining to this matter to Ms. Nurul Hermione and invited Ms. Nurul
Hermione to proceed with the matter.

PRELIMINARY CONFERENCE

20. Pursuant to Rule 11 of AIAC Mediation Rules, Ms. Nurul Hermione directed
the Parties and their legal representatives to indicate their availability to meet
for a preliminary conference. The Parties then agree on the date of 1st March
2021. The purpose of the preliminary conference, amongst others, was to
enable the Parties to discuss and agree upon the issues in dispute and/or to
formulate a process by which those issues are to be clarified and agreed.

21. The preliminary conference on 1st March 2021 yielded the following:

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a. Ms. Nurul Hermione, the Parties and their legal representatives signed
a mediation agreement and a confidentiality agreement in relation to
any information pertaining to the mediation matter.

b. The Parties and their legal representatives agreed not to commence

any judicial or arbitral proceedings during the mediation, except for
emergency measures.

c. The Parties and their legal representatives agreed that assistance from
the Mediator is sought to facilitate the settlement of dispute between
the Parties particularly the practices of the joint venture business going
forward as well as the various claims for losses suffered made.

d. The Parties and their legal representatives are required to submit their
Mediation Plan to the Mediator on or before 22nd June 2021.

e. The Parties and their legal representatives are required to appear for
the mediation session scheduled at the AIAC on 23rd July 2021.

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