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06/11/2013

CORPORATE GOVERNANCE MATTERS
SAC Settlement Leaves Cohen Vulnerable
The record setting $1.8 billion wire tapping and insider trading settlement may put SAC Capital out of business, but its founder is likely still a target of investigators.

He owned a $US115 million Manhattan penthouse and spent millions on artworks to hang on his walls. But now Steven A. Cohen will be spending his billions on record fines imposed on his hedge fund for insider trading.
SAC Capital Advisors, fully owned by Cohen, has agreed to pay a $US1.2 billion ($1.26 billion) penalty for insider trading, becoming the first large Wall Street firm in a generation to confess to criminal conduct.
Cohen's compensation and conspicuous consumption have made him an emblem of the new Gilded Age. But SAC's admission that employees traded stocks based on secret information has coloured Cohen's astounding investment track record, which saw the fund post average annual returns of nearly 30 per cent since 1992.

Not out of the woods yet: Despite being hit with huge fines this year, Steven Cohen is still facing a civil suit. Photo: Bloomberg
Cohen has not been criminally charged but the plea deal is a devastating blow for him, as the firm that bears his initials will acknowledge that it was a corrupt organization. The $US1.2 billion penalty adds to the $US616 million in insider trading fines that SAC agreed to pay to federal regulators earlier this year. Cohen will pay those penalties.

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"The scope and the pervasiveness of the insider trading that went on at this particular place is unprecedented in the history of hedge funds," Preet Bharara, the US attorney in Manhattan, said this summer, referring to SAC.
Cohen, 57, has told his friends that he at all times acted appropriately and complained that the government was obsessed with destroying him and his firm.

Cohen paid $US150 million for Picasso's Le Reve. Photo: AP
He has also said he thinks it is unfair that he is paying nearly $US2 billion in penalties out of his pocket for the crimes of what he believes are rogue employees. Eight former SAC traders have been charged with securities fraud.
In recent weeks, friends say, Cohen's spirits have been high in the hopes that the SAC settlement will put his legal problems behind him. On Wednesday, he appeared relaxed sitting courtside at Madison Square Garden, where he watched the New York Knicks basketball team defeat the Milwaukee Bucks in the season opener.
The guilty plea and fine paid by SAC are part of a broader plea deal that federal prosecutors in Manhattan announced on Monday, which will also impose a five-year probation on the fund and require SAC to terminate its business of managing money for outside investors. The firm will probably continue to manage Cohen's fortune.
The government's demand that SAC stop managing client assets is largely symbolic. Nearly all of the fund's investors have already pulled their money. But SAC was always more insulated than other hedge funds from the damaging effects of withdrawals because of the $US15 billion it managed at its peak, only $US6 billion was from outside investors.
The balance, about $US9 billion, belongs largely to Cohen, with a fraction consisting of employees' money. In the wake of the guilty plea, SAC will likely morph into a so-called family office, with Cohen managing his personal wealth.
The fund, which recently employed more than 1,000 people in 10 offices around the world, has said it will shut its 50-person London unit by year-end. It also has cut six portfolio management teams based in the United States.
SAC had an unusual structure, with Cohen sitting atop a decentralized firm in which about 140 small teams each had control over hundreds of millions of dollars to invest. The teams were all required to share their best investment ideas with Cohen, who managed the largest trading account with several billion dollars in capital. SAC attracted ambitious, talented traders and promised them outsize compensation as long as they performed. In good years, the fund's top talent earned tens of millions of dollars in annual pay.
Cohen was able to pay such compensation because, on the strength of superior performance, he charged among the highest annual fees in the hedge fund industry - 3 per cent of assets and as much as 50 per cent of profits. The average hedge fund charges a 1.5 per cent management fee and 20 per cent of the gains.
Though it branched into other investment strategies, SAC's stock in trade was its so-called mosaic style of investing, using disparate sources of information to buy and sell stocks around market-moving events like quarterly earnings, big mergers and new products. His traders became known for aggressively pumping their sources for insights that would give them an edge, and speculation persisted that the fund routinely crossed the line into trading on confidential information.
Since early 2011, the government secured a series of guilty pleas that gave legitimacy to the speculation and ultimately underpinned the government's indictment of SAC. Noah Freeman, a Harvard graduate, told investigators that he thought insider trading was part of his job description. Richard Choo-Beng Lee, a Malaysian immigrant with an engineering degree, said he freely trafficked in secret corporate information about technology companies. Richard S. Lee, who worked at the Clinton Foundation and McKinsey before pursuing riches on Wall Street, admitted to trading on leaks about corporate restructurings and acquisitions.
The trading of two other former SAC portfolio managers, Mathew Martoma and Michael S. Steinberg, is also central to the indictment. Prosecutors have accused Martoma of using confidential drug trial information to trade the stocks of the pharmaceutical companies Elan and Wyeth.
In bringing charges against Martoma, prosecutors appeared to be closing in on a case against Cohen. Prosecutors said Martoma spent 20 minutes on the telephone with Cohen the day before SAC made questionable trades in the drug stocks. But the government stopped short of saying Martoma told Cohen about the secret trial data. Martoma has refused to cooperate with investigators, and his trial is set for January.
Steinberg stands accused of trading on inside information about the computer maker Dell. Jon Horvath, a former SAC analyst who worked under Steinberg, has pleaded guilty and is expected to testify against Steinberg at his trial, which is scheduled to begin on Nov. 18.
From this batch of cases against SAC employees, the government in July brought a 41-page indictment against the fund in that included four counts of securities fraud and one count of wire fraud. Prosecutors argued that SAC allowed its traders to generate hundreds of millions of dollars in profit from insider trading. The fund, the government said, "enabled and promoted" the illicit behavior.
SAC pleaded not guilty. But in the weeks that followed, SAC had little to do but strike a deal.
The law of corporate criminal liability, which allows the government to attribute the criminal acts of employees to the company itself, buttresses the case. With six former SAC employees having pleaded guilty to insider trading while at the fund - and the employees very likely to have testified at a trial - SAC's defenses were few.
SAC said in a statement that it takes "responsibility for the handful of men who pleaded guilty and whose conduct gave rise to SAC's liability. The tiny fraction of wrongdoers does not represent the 3,000 honest men and women who have worked at the firm during the past 21 years. SAC has never encouraged, promoted or tolerated insider trading."
The total $US1.8 billion punishment against SAC sets a record for insider trading cases and surpasses those of other noteworthy financial prosecutions. Raj Rajaratnam, the fallen hedge fund titan serving an 11-year prison sentence for insider trading, was ordered to pay about $157 million.
Many have also drawn comparisons between Cohen and Michael R. Milken, the junk bond pioneer at Drexel Burnham Lambert who became synonymous with financial greed during the go-go 1980s. After pleading guilty to securities fraud charges, Milken paid about $US1 billion in penalties, adjusted for inflation. To avoid an indictment a quarter century ago, Drexel pleaded guilty to securities fraud, the last big Wall Street firm to enter a guilty plea before SAC.
The resolution of the criminal case against SAC comes more than three months after a grand jury indicted the fund for permitting a "systematic" insider trading scheme to unfold from 1999 through 2010.
The government had built the charges around the eight former SAC traders charged with securities fraud. Six of those traders have pleaded guilty and are cooperating with the government. Two others are fighting their indictments and are awaiting trial.
The plea deal does not get Cohen out of the woods. A separate civil action the Securities and Exchange Commission brought against Cohen still stands. Filed a week before the SAC criminal indictment was announced, the lawsuit accused him of turning a blind eye to misconduct at his fund. The SEC is seeking to bar Cohen from managing outside money, at SAC or elsewhere, people briefed on the matter said.
Criminal authorities also continue to view Cohen and other SAC employees as targets of a continuing insider trading investigation. FBI agents, the people said, are examining SAC's trading records and seeking the co-operation of potential informants. The plea agreement expressly states that it "provides no immunity from prosecution for any individual."
Still, SAC's guilty plea serves as a capstone moment in the government's vast insider trading investigation. Led by federal authorities in Manhattan, the inquiry began in earnest during the middle of the last decade using techniques normally reserved for organized crime and drug trafficking cases. FBI agents used wiretaps to secretly record the telephone conversations of Wall Street traders. They also pressured low-level traders to co-operate and help build cases against their colleagues and bosses.
The crackdown has produced more than 70 convictions, but SAC is the first corporate entity charged with insider trading since the investigation began.
Guilty pleas by financial institutions are exceedingly rare, and legal specialists say the case against SAC could embolden prosecutors to bring criminal charges against other Wall Street firms. The Justice Department has been reluctant to go after big companies in the wake of the 2002 indictment of Enron's accounting firm, Arthur Andersen, which led to the firm's swift collapse and the loss of 28,000 jobs.
"No institution should rest easy in the belief that it is too big to jail," Bharara, the US attorney in Manhattan, said at a news conference.
In a letter to the court, Bharara called the penalty "steep but fair" and "commensurate with the breadth and duration of the charged criminal conduct." The letter explained that SAC and its subsidiaries agreed to plead guilty to each of the five counts in the indictment.
"What SAC Capital's plea demonstrates is that cheating and breaking the law were not only permitted but allowed to persist," George Venizelos, an assistant director at the FBI, said.
Bharara has argued that corporations should face the consequences of financial misdeeds. The SEC has also begun to demand admissions of wrongdoing from corporate defendants, a change from its historical practice of not requiring an acknowledgement of misconduct.
"The pendulum had swung too far back the other way," Bharara said in September. "I think we should be entering a serious era of institutional accountability, not just personal responsibility."
Brandon L. Garrett, a professor at the University of Virginia school of law and author of the forthcoming book Too Big to Jail: How Prosecutors Target Corporations, said that while environmental and antitrust inquiries frequently resulted in corporate indictments, financial fraud investigators were just now "starting to see the light".
"Prosecutors have increasingly been saying that no company is too big to jail, and now they can point to the SAC case and say 'we really mean it,"' Garrett said.
SAC still pushed back when it came to money. The government, according to people briefed on the matter, initially demanded $US1.8 billion in penalties from SAC - $US900 million in fines and $900 million in forfeited profits. But SAC's lawyers, the people said, urged the government to deduct from that amount the $616 million the fund has already paid to the SEC.
Prosecutors ultimately agreed. Under the plea deal, SAC would pay $US900 million in fines and forfeit an additional $US284 million to the government, reflecting the $US616 million credit from the SEC payout.
Cohen's troubles have hardly slowed down his prodigious buying and selling of real estate and art. This year, he purchased a $US60 million oceanfront property in the Hamptons while at the same time putting his Manhattan penthouse on the market. Last fall, he paid $US150 million for Picasso's Le Rêve, one of the highest prices ever for a painting. But next week, at the contemporary sales at Sotheby's, he will put up for auction about $US80 million worth of art, including two Warhols and a Richter.

01/11/2013

MONITOR
Results Measurement for Advisory Services.

Alternative Dispute Resolution in Southeast Europe
IFC has supported introduction of mediation in Southeast Europe since 2003, first through the Southeast Europe Enterprise Development (SEED) program and, from May 2005, through the Private Enterprise Partnership in Southeast Europe (PEP-SE) program. Six pilot projects have been launched: two in Bosnia and Herzegovina in May 2004 and May 2005, three in Serbia in July 2006, and, one in Macedonia, where implementation of mediation began in late 2006. This issue of the Monitor summarizes both the successes and lessons learned through an external evaluation of these mediation projects. Overall, not only were all project objectives achieved or expected to be achieved, the projects exhibited particular strengths in training design, mediator choice, and results measurement, among others.
Overburdened courts in the entire Balkan region have suffered from a lack of confidence. Courts are viewed as slow, inefficient, incompetent, and expensive, and they fall short on transparency. The goal of all the Balkan mediation projects has been to install all the pre- conditions needed to introduce mediation as an effective alternative to the distrusted formal court procedures. Not only can mediation solve the case backlog problem, it can free funds currently blocked by legal disputes. Mediation can also supplement and support court reform by providing effective alternative procedures that enable quicker, cheaper, and better access to justice for groups and individuals. The most appropriate cases for the mediation pilots were commercial cases, although other types may be considered for these pilots in the future.
The specific objectives of the alternative dispute resolution (ADR) pilot projects have been to support the establishment of an efficient mediation system to reinforce commercial contracts, encourage private sector performance and investments, and reduce risks associated with highly inefficient and expensive court procedures.
These projects provided integrated advisory services to
(a) define a legal framework,
(b) educate the broader public to the benefits of mediation,
(c) establish a network of sustainable mediation centers, and
(d) create a pool of expert mediators.
In addition to financial support, IFC provided project management, hired local staff and consultants, and produced an annual report on the results.
IFC commissioned an independent consultant to undertake an evaluation of the Balkan mediation projects, which was completed in October 2006. The objective of the review was to develop best practices for future projects, as well as improve existing projects. The evaluation considered the projects’ effectiveness, efficiency, and sustainability, organizing its conclusions as points of strength and vulnerability. The evaluator utilized data collected by the monitoring consultants in Banja Luka and Belgrade, which are the two longest operating mediation centers, through (a) impact assessments for all mediators including any associated judges, all ADR training and pilot training participants, and all mediation clients three to six months post mediation, and (b) a survey of a “control group” of clients not using mediation 6 to 12 months later.
Table 1.
Mediation Cases in Bosnia and Herzegovina and Serbia, 2004–06

Mediation Cases Bosnia and Herzegovina Serbia Total
Number referred 2,992 n/a n/a
Number mediated 536 (18) 1,741 2,277
(percent referred)
Number reaching 300 (56) 1,551 (89) 1,851 (81)
agreement (percent mediated)
Assets released (euros) 7,995,000 5,100,000 13,095,000
Contract enforcement 2003 2006 2003 2006
(days)* 895 595 1,028 635

Results and Outcomes:
The evaluation found that most project objectives had been achieved and several important components were expected in the near future. The Serbian mediation project proved the most successful in that nearly 90 percent of cases referred were successfully mediated (table 1)
Survey results demonstrated that mediation was a quicker solution than court procedures. Results in Banja Luka were particularly impressive: 93 percent of clients finished mediation within two weeks. The impact on court backlogs, however, was modest overall. Mediation cannot resolve, but only make a dent in, backlogs in court cases, although satisfaction and willingness to use mediation again was high among mediation users. Mediation proved very suitable to solving multiple cases of a similar nature, for example, labor cases in one company. The ability to release funds quickly was generally recognized as one of the most important positive aspects of mediation. This goal was reached where mediation was already operational.
Trust in the legal system increased among those clients who used mediation, which they viewed as faster and cheaper and a more confidential, accessible, and amicable means to solving disputes. These parties believe that mediation can improve the efficiency of the court system. Compared with the control group, mediation users considered the mediation centers more accessible than courthouses. Survey results on whether mediation improved business relations was mixed. In Banja Luka, more than 80 per- cent of survey respondents were ready to continue business relations with the opposing party in a dispute; whereas, the majority in the Belgrade survey would not, but the reason may be that the majority of surveyed cases in Serbia were labor cases. Only future mediation efforts will show to what extent clients will use mediation again, but survey results were encouraging; almost all respondents in one overall survey of mediation users indicated they would use mediation again.

Points of Strength and Vulnerability:
The evaluation concluded that the three evaluated mediation projects exhibited a range of strengths:
1. Instituting easily approachable mediation centers in contrast to the more formal and imposing courts
2. Allowing mentoring and coaching by senior mediators for each newly trained mediator for five mediations
3. Establishing the Association of Mediators in Bosnia and Herzegovina and the Chamber of Mediators in Macedonia as the only state level institutes assisting in development of state- level activities and implementation of mediation law
4. Introducing court annexed mediation as a means of making the potential of mediation better known and integrating the concept of mediation into society, before implementing free-market mediation
5. Using former judges as mediators, which creates trust among legal professionals and potential clients
6. Using monitoring and evaluation tools from the start of the project to collect data, particularly asking clients later if the agreement was fulfilled (often the case), because opponents of mediation often argue that agreements will not be met
7. Encouraging strong and enthusiastic local IFC and staff teams to support implementation of mediation within the legal system
8. Using (a) best practices from neighboring countries, especially those with comparable legal systems, to avoid errors and (b) input from key experts from Canada, the United States, and The Netherlands.
9. Restricting time spent on unsuccessful mediation efforts by imposing a time limit of 30 days to reach an agreement, there- by avoiding abuse of mediation procedure by defendants.

Nonetheless, the evaluation raised concerns on the vulnerability of the three projects to certain risks or hazards as they continue to be implemented:
* Initial success in Bosnia and Herzegovina derived from huge backlogs and a need for money in the economy to float freely. An improved economic climate with more currency flowing and decreased case backlogs could change the incentives for the parties to accept mediation offers.
* Requiring mediators to have a university degree helps create trust in mediation among clients and lawyers. In the long term, however, a university degree does not guarantee a successful mediator; less educated people with special communication skills could also succeed as mediators.
* Although using judges as mediators may increase the
credibility of mediation, they are trained to decide disputes, not serve as facilitators. Some judges may find it hard to switch from one role to the other, in which case mediation may only substitute or bypass court procedure, instead of serving as an effective alternative; in the end, this could weaken the legal system.
* In the beginning of a pilot, the clearest cases are often the first mediated, which may lead to high trust in mediation among clients. Because these cases are usually dealt with quickly, however, people come to expect short mediations; this will not necessarily remain the case, especially in free market mediations of all kinds, such as family law, which usually takes far more time. * When free-market mediations are allowed, the current
mediation centers may not have sufficient capacity to schedule the additional mediations.
* The financial dependency of local partners and their urge to be self supporting could cause tension with IFC. Communication and understanding between IFC and local partners is very delicate; it is important to be cooperative and open. Division of tasks between IFC and both the Association and Chamber of Mediators, for example, should be transparent to all participants.

Lessons Learned
The main conclusion of this review is that the effectiveness and efficiency of mediation projects depends on the presence of the combination of all of the following key conditions:
1. Strong support by the government, for example, the Ministry of Justice, for mediation
2. Strong support for mediation by the courts, which are pre- pared to refer cases to mediation
3. Passage of legislation on mediation
4. Strong and solid association of mediators or local partners
5. Strong and independent mediation centers
6. Continuous extensive public awareness campaigns
7. High-quality mediators
8. High-quality training with obligatory updates
9. Systematic and high-quality monitoring and evaluation that collects and uses information on results.

When all the above conditions are fulfilled, the state, potential clients, and the courts will benefit from mediation efforts. Organizations or donors that provide financial and technical support should, therefore, continuously monitor efforts to ensure the high quality of all these conditions.

Other key lessons from the evaluation include the following:
*The success of project implementation is strongly related to the way IFC staff function. They must have the capacity to involve local institutions in the project and work together with early pioneers; thus, an enthusiastic management team of highly qualified people working closely together with local stakeholders is important.
* Given the ratio between the number of court cases and number of mediations, the impact of mediation in reducing case backlogs will only be small. Small percentages of reductions, that is, less than 10 percent, are more realistic.
* Certain criminal cases may be appropriately and successfully mediated, for example, those concerning damage compensation, minor traffic offenses, or ones that will not impose imprisonment as a penalty. Public relations activities addressed to judges and potential clients should also con- sider referring such cases to mediation.
*In Macedonia, the Academia for Training Judges and Prosecutors, which will replace the Judges’ Association Center of Education, could play a role in educating on referral and selection of cases.

Future Sustainability
Mediation within Balkan countries is still considered a novelty. Mediation schemes should be given time to prove themselves and become well known to potential users. For pilot projects to be
sustainable, IFC and/or other sponsors must continue to finance the projects for the next few years. Associations of mediators and other local key players, including the mediation centers, need time to become financially independent until 2008, when IFC finally steps out as a financier. Continued government support is crucial for financial and legislative reasons. Local donors, such as the National Bank in Serbia, the Belgrade Bar association, and Child’s Rights Center, which are the founders of the mediation centers, are also important.
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Although using judges as mediators may increase the credibility for mediation, they are trained to decide disputes, not serve as facilitators".
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01/11/2013

IFC ALTERNATIVE DISPUTE RESOLUTION
Product Development.

The term "Alternative Dispute Resolution" (ADR) is typically used to describe a range of dispute resolution mechanisms such as arbitration, mediation and less frequently used methods that are alternatives to litigation. The two most common forms of ADR are mediation and arbitration.

Mediation is characterized by its use of a "neutral" third party, the mediator, either to mediate a specific dispute between two parties or to reconcile their relationship. Mediation is different from arbitration in that in mediation the mediator cannot impose a decision on the parties, and does not have the authority to rule on a settlement. Instead, the mediator offers a neutral view on the dispute to the two parties and tries to work with both parties in finding an amicable solution.

Arbitration, unlike mediation, is a legal technique for resolving disputes outside the courts in which a third party, the arbitrator reviews the case and imposes a decision (“award”) that is legally binding for both sides.
ADR systems offer disputants a chance to avoid the often long and expensive process of taking a case through the formal judicial system. Mediated solutions are generally faster, less expensive, and more likely to allow the parties to return to doing business with one another. ADR has long been an important part of dispute resolution in many developed counties and is becoming increasingly important in developing countries as these countries attempt to reform their judicial systems.

Benefits of using ADR:
• Faster and less costly resolution of disputes
• Easy and accessible processes of dispute resolution
• Confidentiality (sensitive cases can be resolved without publicity)
• More efficient dispute resolution in highly-technical specialized areas
• Reduction of backlog from courts

IFC ADR Global Program Overview
The IFC Alternative Dispute Resolution (ADR) product line offers assistance in the implementation of more efficient, less expensive, conflict resolution mechanisms for businesses in emerging economies. In delivering this product, IFC partners with local governments, justice ministries, lawyers’ associations, business membership organizations, international mediation experts, and donors.
A typical IFC ADR country project focuses on four key areas: establishing a supportive legal framework for ADR;
creating a pool of well trained mediators;
raising awareness on the advantages of using ADR within the broader business community; and
creating financially sustainable ADR centers.

IFC supports mainly commercial mediation initiatives. Increasingly, IFC is supporting arbitration in selected jurisdictions either independently or in combination with mediation services.

Program Objectives
To create preconditions to develop, test, and roll-out ADR as a global standardized product by investing in knowledge transfer, training and partnerships with donors and ADR service providers. To explore and pilot ADR projects that are designed to link this product with IFC's core mandate and competencies (investment and advisory) by setting up and supporting pilot initiatives throughout the world. To improve coordination across the World Bank Group, particularly related to legal and judicial reform work undertaken by IBRD, by supporting joint missions to strengthen IFC’s ADR product in delivering first class advisory services.

Building Partnerships
A special feature of our product development work is our commitment to building strong partnerships with institutions that are global leaders in the field of out-of-court dispute resolution.. To date we have established partnerships with the following institutions:
International Federation of Consulting Engineers
Centre for Effective Dispute Resolution
Conflict Management International
Dispute Board Federation


Highlights of Marrakesh ADR Event
In December 15-16, 2008, the program hosted training on "Commercial Mediation in Emerging Markets" in Marrakesh, Morocco. The event consisted of two exciting back-to-back global sessions on commercial mediation: a one day internal workshop for IFC/World Bank staff, followed by a one day global forum involving judges, mediators, clients, donors, and a host of international ADR experts and service providers. The first day covered IFC-supported ADR work, IBRD supported judicial reform and how they relate to each other, what is key to designing and implementing an effective commercial mediation project, how to decide which model suits your project and context, and how to measure ADR project results. After providing an overview of the state of play of mediation in emerging markets, the larger external event that followed tackled compelling issues on the commercial mediation agenda today. We brought together a fascinating combination of ADR experts, ADR users and practitioners from around the globe to debate and share their experiences with mediation processes in a wide range of countries.

Success Stories
Introducing Efficient Commercial Dispute Resolution Mechanisms in Serbia Thousands of Serbian entrepreneurs are already reaping the rewards offered by the court-connected commercial mediation mechanism introduced by the IFC in 2005. Disputes that were previously resolved in 635 days can now be resolved in 14 days. Today, the six mediation centers opened in Serbia with IFC help are financially sustainable. Around 2,800 mediations have been completed successfully and more than $52 million in previously frozen assets has been unlocked. Alternative dispute resolution is now an integral part of doing business in Serbia. The country currently maintains 380 mediators and alternative dispute resolution is now a core component of the Serbian legal education system. In addition, an independent evaluation of the IFC project found the majority of users of the mediation mechanisms were either satisfied or very satisfied with their experiences.

Introducing ADR in Bosnia and Herzegovina IFC assisted in the development of the Association of Mediators in Bosnia and Herzegovina. Two mediation centers, in Sarajevo and Banja Luka, were transferred to the Association in April 2007. More than 280 individuals were trained in mediation; 12 fully trained mediators have mediated 342 cases in these two centers, releasing close to $12.8 million in assets to parties. The Association offers mediation services, training, certification, seminars, presentations, and direct consulting on mediation. A businessman from Banja Luka commented on how four disputes involving his company were resolved in just three hours through mediation: “The mediation process resulted in nearly $1.9 million being freed up for my business. So, in my case, this quick turnaround time in resolution of my disputes, literally translated into millions of dollars, which I am now able to reinvest.”

Introducing ADR in Pakistan Since mid-2005, when IFC PEP-MENA began to assist Pakistani authorities in introducing court-referred mediation, the ongoing ADR project has come a long way: professional mediators and master trainers have been trained and certified, a mediation center has been established in Karachi, a high-level Board of Governors is driving the process, courts now apply case management to select mediation candidates, and – most importantly – private parties are beginning to use mediation to settle their disputes. For the broader institutionalization of ADR/Mediation, the project is working with local business and law schools to develop training programs and curricula on ADR/ Mediation. These will support initial training and capacity building among lawyers and judges who play a key role in promoting ADR/Mediation. The Karachi Centre for Dispute Resolution has helped businesses unlock $15 million in assets.