The impact of the mediation process on the default of the debtor

Abstract

Mediation, as defined in Law No. 6,325 on Mediation in Civil Disputes, constitutes a voluntary method for resolving disputes involving the participation of an impartial third party with specialized training. The mediator employs systematic techniques to facilitate discussion and negotiation among parties, fostering communication and mutual understanding to reach a solution. Should parties fail to find a resolution independently, the meditation may propose one. The mandatory inclusion of meditation in certain types of cases since 2018 has elevated its status as a frequently applied alternative dispute resolution mechanism in our jurisdiction. However, this frequent application has brought to light concerns regarding areas not adequate in cases involving debtor default, a matter complicated by the absence of specific regulations. Consequently, divergent interpretations have emerged within legal practice, notably evident in the rulings of the circuit courts of appeals. While some argue that mediation does not result in default, others posit that it may. In conclusion, the verdict rendered by the Court of Cassation serves to reconcile the contradictory judgment issued by the civil chambers of the circuit courts of appeals. Although this issue has been examined in various aspects within judicial decisions, it has not received comprehensive attention in legal doctrine. For instance, the question of whether mediation constitutes default has not yet been examined, particularly regarding the precise moment at which a debtor is considered to be in default. Given the significant ramifications of default, understanding the impact of the mediation process is crucial. This study delves into why the mediation process does not result in debtor default, drawing upon insights from the verdicts of circuit courts of appeals and the Court of Cassation, while also examining a few perspectives on the matter and analyzing all pertinent approaches.