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It's those Oswals again

Mediation news this week comes from Australia and America’s Mid-west.

You may recall a previous blog in which I mentioned that Pankaj and Radhika Oswal the (in)famous Indian billionaires based in Australia had entered mediation with the bank which is pursuing them for losses arising from the sale of Burrup Fertilisers.

It seems the couple also have a minor issue with the Australian Tax Office of an estimated $100m tax bill.

Despite mediation being a voluntary process once proceedings are issued a court can, of course, order mediation, and this is what Justice Tony Pagone has done in response to the Oswals’ application to enter mediation with the Tax Office in Australia.

The Tax office are not happy about it but will enter talks next month to try to settle the dispute by mediation.

The fact that the couple have sought to mediate a second dispute suggests they have seen the sense in the saving of cost and time by dealing with disputes by mediation rather than through the court process. A fact confirmed by their lawyer, Rashelle Seiden, who has advised the court in the tax dispute that the couple intend to use the proceeds from the first mediated settlement to reach a settlement with the Tax Office.

There is another tax bill which the Oswals face for Capital Gains and Income Taxes which is not part of the current case, but one of the benefits of mediation is that you can deal with any and all issues that arise not limited to the matters before the court.

The lawyer for the Tax Office, Michelle Hirschhorn, is less positive about whether all the issues can be “ventilated” at mediation, but with respect I beg to differ. There is no limit on what can be dealt with in mediation and it makes commercial and practical sense to do so.

I had a dispute some months ago where a secondary claim, not part of proceedings, was in the background. The parties agreed to include it in their mediated settlement so avoided the doubling up of fees, time and effort and settled both the live dispute and the claim brooding in the background at the same mediation meeting.

Mediation is also being used increasingly by famers in Minnesota and Iowa who find themselves in financial difficulties as a result of low commodity prices.

Reports suggest that in order to deal with creditors farmers are turning to mediators to reach agreements and allow both sides to either continue trading with each other or conclude relationships on better terms than simply forcing the farmers into bankruptcy.

Minnesota records show that mediations are up 20% this year and according to the regional co-ordinator at the Iowa Mediation Service, Iowa has seen a steady increase over the last two years from 160 cases in 2013/2014 up to 525 in 2015/2016.

If you have an issue with creditors for your business or yourself and would like to discuss mediation call Ed Johnson at Northwest Mediation on 07931318347 or by email at

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