Debt disputes look binary: the money is owed or it is not. In practice most banking and credit disputes conceal negotiable ground: restructuring, timing, security, interest, and the cost of enforcement. Mediation is the forum where that ground is worked systematically. For businesses with several facilities at stake, one structured negotiation is usually easier to manage than parallel enforcement actions.
Can debt disputes be mediated?
Yes. Disputes between lenders and borrowers over repayment schedules, guarantees, charged property, and facility documents are mediated regularly, both privately and through court-annexed mediation once enforcement proceedings are filed. A lender’s commercial interest is often recovery rather than escalation, and a borrower’s interest is time and structure. Mediation is where those interests can be traded.
What can be agreed in a banking mediation?
- Restructured repayment programmes with defined milestones
- Standstill terms pausing enforcement while a plan is performed
- Release or substitution of guarantors and additional security
- Settlement sums payable by instalments, with consequences for default
- Withdrawal of proceedings on agreed conditions
When should the parties consider mediation?
Early, before positions harden and enforcement costs accumulate on both sides. The earlier the referral, the more options remain open. Once proceedings have begun, court-annexed mediation remains available, and the court may refer the matter in any event. Regulatory duties that constrain a bank’s discretion do not prevent mediation; they simply shape the options the institution’s representatives can approve at the table.
Prepare the numbers properly. A restructuring proposal supported by credible cash-flow projections is easier for a credit committee to approve than one that is not, and a borrower who understands the lender’s security position negotiates more realistically. Bring the person who can actually sign the agreement. Gather the statements of account and facility letters before the session, not during it.
Banking disputes turn on security documents and regulatory boundaries, so take advice before the session. The banking and securities lawyers at CS Advocates LLP advise lenders and borrowers on mediated workouts; see our practice areas.
For guidance on your specific situation, contact CS Advocates LLP , call, WhatsApp, or book a confidential consultation with a certified mediator at our Westlands, Nairobi office.