International Commercial Mediation Update: UNCITRAL Finalizes Convention and Model Law Drafts on International Settlement Agreements Resulting from Mediation

By Erin Gleason Alvarez

erinEarlier this year, we reported on the United Nations Commission on International Trade Law (UNCITRAL) Working Group II’s progress towards finalizing a convention on the enforcement of international commercial settlement agreements resulting from mediation. On June 25, 2018, UNCITRAL finalized the draft Convention on International Settlement Agreements Resulting from Mediation, to be known as the Singapore Convention, as well as finalizing the draft Model Law.

By way of background, Working Group II was initiated by UNCITRAL in 2014 in order to explore whether it might be feasible to develop mechanisms for the enforcement of mediated agreements in international commercial disputes. The need for this Working Group grew out of concern that parties to mediated agreements may not be afforded the same protections as those available in international commercial arbitration.

The achievements of Working Group II were extolled at an UNCITRAL conference at the United Nations on June 27, held in celebration of the 60th anniversary of the New York Convention. Representatives from Israel and Australia, who participated in the Working Group, led a discussion on the drafting process. Consideration over an international mediation convention lasted nearly four years, and it seems that a few mediations took place in finalizing the documents.

The Convention and Model Law drafts outline the requirements for a settlement agreement, process for enforcing an agreement and grounds for refusing to grant relief.  The documents are seen as completing the ADR framework for international disputes.

States that have participated in this process include Argentina, Australia, Austria, Bulgaria, Cameroon, Canada, Chile, China, Colombia, Czechia, Denmark, Ecuador, El Salvador, France, Germany, Greece, Hungary, India, Indonesia, Israel, Italy, Japan, Kuwait, Lebanon, Libya, Malaysia, Mexico, Namibia, Nigeria, Philippines, Republic of Korea, Romania, Russian Federation, Sierra Leone, Singapore, Spain, Switzerland, Thailand, Turkey, United Kingdom of Great Britain and Northern Ireland, United States of America and Venezuela (Bolivarian Republic of). The session was also attended by observers from Algeria, Belgium, Benin, Cyprus, Democratic Republic of the Congo, Dominican Republic, Finland, Iraq, Morocco, Nepal, Netherlands, Norway, Saudi Arabia, Syrian Arab Republic and Viet Nam, in addition to observers from the European Union and the Holy See.

From here the Convention and Model Law must be approved by the General Assembly, which will likely happen later this year. In August 2019, a signing ceremony will be held for the Convention in Singapore and thus the Convention will be known as the “Singapore Convention.”

At the June 27 United Nations event, hope was expressed that the Singapore Convention would do for mediation what the New York Convention has done for arbitration.

 

Erin Gleason Alvarez serves as mediator and arbitrator in commercial and insurance disputes.  She is a member of the CPR Institute Panel of Distinguished Neutrals and co-chairs the CPR Institute Mediation Committee.  Erin may be reached at erin@gleasonadr.com

Updating the Global Pound Conference: A Survey on Mediation in Cross-Border Disputes

By Angela Cipolla

The recent Report on International Mediation and Enforcement Mechanisms found that, while mediation survey respondents believe in the necessity of using the process for cross-border disputes, a lack of education about how mediation works is a problem.

The report’s results also strongly boost calls for an international mediation enforcement mechanism.

The recent report was issued by the Institute for Dispute Resolution, at New Jersey City University’s School of Business in Jersey City, N.J., to the International Mediation Institute for the benefit of delegates attending the UNCITRAL Working Group II (Dispute Settlement) 67th Session, on dispute settlement, which was held last month in Vienna. For more information, see www.imimediation.org.

The report follows and incorporates results of surveying done at the Global Pound Conference, which concluded a year of face-to-face meetings with practitioners worldwide in July. See http://globalpound.org; for a wrap-up of the GPC series, see CPR Speaks blog post at http://bit.ly/2vxV2P1.  The IMI and NJCU IDR surveys received responses from users in various fields and professions that represented, according to respondents who identified their locations, 24 countries.

The information was collected in the 28 GPC events held in 22 countries, as well as through online voting. Votes were categorized by stakeholders.

The report, written by David S. Weiss, director of the Institute for Dispute Resolution and a visiting scholar at the New Jersey City University’s business school, and New Jersey attorney Michael R. Griffith, analyzed views on establishing an international treaty for the enforcement of mediated settlements collected online from June 2016 to March 2017; it also analyzed responses from the Global Pound Conference Survey, which was available at IMI Global Pound Conference gatherings and online from March 2016 to September.

The report also expands upon how the international legal and business communities use mediation.  See S.I. Strong, “Use and Perception of International Commercial Mediation and Conciliation: A Preliminary Report on Issues Relating to the Proposed UNCITRAL Convention on International Commercial Mediation and Conciliation,” U. of Missouri School of Law Legal Studies Research Paper (Nov. 17, 2014)(available at http://bit.ly/2yAzUhp).

Overview

Weiss and Griffith gathered the opinions of “those who are most likely affected by the adoption of any prospective drafts or proposals by Working Group II (Dispute Settlement) with emphasis on the users.” The views, reflecting 103 survey responses, reflect the “wider business community, their advisors, providers, and those that may influence the mediation space,” they write. The GPC conference and online surveying produced responses from about 2,500 stakeholders.

The report follows the same pedagogical and methodological process as Strong’s article, presenting research “gathered by an international quantitative-qualitative study of users’ assessments of the enforcement of international commercial settlement agreements resulting from conciliation.”

The Report’s Findings

With regard to the report’s own survey questions, the study brought to light a lack of education regarding the benefits and uses of mediation in cross-border disputes. It found that 40% of the respondents said they use or have been advised to use mediation in a cross-border dispute as a best practice in business “infrequently,” and 24% answered “not at all.”

When users were asked why they thought parties do not resolve their commercial cross-border disputes through mediation, the most frequent answer at 57% of the responses was that “they are unfamiliar with mediation.”

The study called the result “a surprisingly [sic] lack of knowledge about mediation among users.”

These results demonstrate a need for more education about mediation. Interestingly, the second highest-ranked reason in response to the question was that no universal mechanism to enforce a mediated settlement exists.

While the IMI and NJCU survey also showed “a general positive direction of users to incorporate mediation clauses into cross-border contracts,” 80% of users were even more apt to participate in mediation if there was a uniform global mechanism to enforce mediation settlements in place.

This demonstrates the incentive that such a mechanism would provide and the possible positive effects it would have on mediation use in cross-border disputes.

Accordingly, the report found that the majority of users and stakeholders in both the study conducted for the report and the GPC surveying “believe that a uniform global mechanism to enforce mediation settlements would improve commercial dispute resolution.”

Some concerns regarding faith and trust in the mediation process were raised in the IMI and NJCU study’s comments, suggesting that more confidence in the process needs to be built as the use of mediation becomes more prevalent.

The report also looked to whether a treaty should include provisions similar to the longstanding Convention on the Recognition and Enforcement of Foreign Arbitral Awards, better known as the New York Convention.

This idea was well received. An overwhelming 84% of users stated that they would be “more likely” to use or increase their use of mediation in a cross-border dispute if there were a uniform global mechanism in place, similar to the New York Convention, which would ensure enforcements of settlement agreements.

The report speculates that a majority of users would like to use the uniform mechanism as a “bargaining chip;” 60% of users stated that they would prefer an “opt-in” system.

Additionally, the report examined the challenges users faced in mediation. When asked whether users faced any post-mediation challenges to settlement agreements in cross-border disputes on the grounds of capacity, duress, or fraud, the two largest recorded answers were 47%, responding “never,” and 36% responding, “sometimes.”

The report also asked users whether they would be less likely to use mediation if a uniform global mechanism of enforcement included any defenses.  The question didn’t show that defenses would have a significant impact on a user’s willingness. Forty-four percent of the users responded “no,” while 27% responded “yes.”

When asked if the users would prefer a uniform global mechanism that limited defenses, similar to the New York Convention’s Article V, 54% of users responded “yes,” while 22% responded “no.”

The report also revealed that though re-litigating settlements doesn’t occur often, the rate was high.  The study found that 35% of users answered “infrequently” when asked if they have ever were required to re-litigate on general contract defense a mediation settlement agreement that was not honored. “If this was not a problem,” the authors wrote, “we would expect to see user’s answering ‘infrequently’ at a much lower percentage.”

This indicates a problem that a global enforcement mechanism might help alleviate. Additionally, regarding the availability of mediators, the report showed that “[w]hile it is generally positive that 61% of users are generally able to find qualified mediators, there [is] a vast amount of room for improvement.”

In addition to its own questions, the report also analyzed the GPC Series Questions. The report found that just like the users in its study, a majority of GPC stakeholders “believe that a uniform global mechanism to enforce mediation settlements would improve commercial dispute resolution, with 51% [of users concurring.]”

Overall, the GPC Series Questions had a positive view of taking action on mediation settlement enforcement.  Those conference and web survey questions found 51% of users “clearly supporting a uniform global mechanism to enforce mediation settlements as their first preference.”

* * *

The report concludes that global enforcement of mediation settlement agreements is a “necessary tool for encouraging mediation,” and that such an enforcement mechanism should be “congruent with the methodological approach that was adopted by the arbitration community through the New York Convention.”

The report further emphasizes that “practical certainty” in mediated settlement agreements will (1) improve access to justice and (2) “increase efficiency for the wider business community,” and that both of these benefits are crucial to advance trading systems and aide businesses.

UNCITRAL’s Working Group II’s 68th session, expected to consider a mediation enforcement convention further, is scheduled to be held in New York, from Feb. 5 – 9.

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The author is a Fall 2017 CPR Institute Intern.

It’s a Wrap: Global Pound Conference Concludes

By Lyn Lawrence

The Global Pound Conference Series: Shaping the Future of Dispute Resolution and Improving Access to Justice (see http://bit.ly/2v4dX4V) came to its conclusion after the last local event was held in London on July 6, 2017.

The purpose of the GPC Series was “[t]o create a conversation about what can be done to improve access to justice and the quality of justice around the world in commercial conflicts and to collect actionable data,” according to the GPC’s Singapore Report from its March 2016 kickoff event (available at http://bit.ly/2voNWfU).

The GPC Series was inspired by the original Pound Conference, held in Minnesota in 1976, and the positive effect it had on improving access to justice. At its conclusion almost 41 years after the original, the GPC Series held events in 29 cities worldwide, attended by more than 2,000 participants and supported by global sponsors (which included the CPR Institute, the publisher of this blog).

A detailed discussion on the inception of the GPC Series and the New York event can be found in the following articles published in CPR’s Alternatives, “Attempting to Define the Practice, Pound Conference Organizers Launch a Worldwide Series on ADR Common Ground,” 33 Alternatives 11 (December 2015) (available at http://bit.ly/2e1WaXW) and “A Look Back On, And Forward To, the Global Pound Conference,” 35 Alternatives 1 (January 2017) (available at http://bit.ly/2t2r4Sr).

THE DATA

The data collected throughout the GPC Series belongs to the International Mediation Institute, a nonprofit mediator accreditation organization based in the Hague, Netherlands, that founded the GPC series. After each local event, an Academic Committee processed the results, which are available at http://bit.ly/2tWPo9z.

The Academic Committee also created accumulative results as the events had been concluded. At the time of posting, the most recent results consisted of data collected at the inaugural Singapore conference up until the June 29 Johannesburg conference (available at http://bit.ly/2tWYQKp), excluding only the final event in London on July 6.

Each local event had an identical set-up with the same GPC Series core questions (available at http://bit.ly/2tVFabk), divided among four sessions, and headed by a panel of professionals in dispute resolution.

The data was gathered from participants grouped into stakeholder categories. They were asked to answer the core 20 multiple-choice questions using a GPC Series Event Application that was downloaded by participants on their own electronic devices.

Before the conclusion of each session, the stakeholders were divided into groups to answer four open text questions. Many of these questions were formulated at the 2014 London pilot event (available at http://bit.ly/2ulNsdx). The results were tallied on the spot, and then displayed on a screen and discussed by the panel and conference attendees.

WHAT WAS LEARNED?

Academic Committee Chairman Prof. Barney Jordaan was cautious in adding in the Singapore Report that, “While all care was taken to ensure the integrity of the data gathering process and rigour in the formulation of the survey questions and the analysis in this Report, the Series is not intended to be primarily an academic project nor does the data gathering process represent a pure data collection environment. Any use of the GPC data must be undertaken with these limitations in mind.”

Considering these qualifications, such as the varied number of participants in each stakeholder group, there are a few noticeable highlights from the accumulated results–particularly, where there was a split or unanimous agreement among the stakeholder groups.

All four sessions had a different focus area ranging from parties’ needs and expectations to how the current commercial dispute resolution market addressed these needs and expectations. Keeping with the theme of the event, there were also several questions on steps that can be taken to improve the current dispute resolution market for commercial disputes.

The majority of the stakeholder groups voted that financial interests were the primary consideration for parties and providers alike. This is consistent with the local events that were held in the United States, particularly the New York event. Stakeholder groups were also in agreement that “external lawyers” would be the most resistant to change in commercial dispute resolution.

There was a three-way tie when it came time to deciding where “policy makers, governments and administrators” should focus their attention when improving access to justice. Receiving 46% of the votes each were the “use of protocols promoting non-adjudicative processes,” “pre-dispute or early stage case evaluation or assessment systems using third party advisors who will not be involved in subsequent proceedings” and “making non-adjudicative processes (mediation or conciliation) compulsory and/or a process parties can ‘opt-out’ of before adjudicative process can be initiated.”

With only two percentage points separating the results on the role lawyers should play in commercial disputes, advisers and adjudicative providers voted that lawyers should speak and/or advocate on a party’s behalf, while parties, non-adjudicators and “influencers” voted that lawyers should work “collaboratively” with the parties and “may request actions” on their behalf.

Stakeholder groups were mostly in agreement when it came to answering the remaining core questions; see the aggregated results at the link above.

WHAT IS NEXT?

The data from the conferences was consistent through the local events, but it is unclear how the final report will develop these findings.

Those who were unable to attend any of the local events have the opportunity to complete the core questions online until July 31. (Available at http://bit.ly/2voPRkz).

The GPC Series website, at http://globalpoundconference.org, encourages individuals to complete the core questions online as it will form part of the GPC Series data.

Once the final report is released, it will be interesting to see the final results and the impact it will have on improving dispute resolution. In addition, this GPC Series was limited to commercial disputes—perhaps the creators will expand into other areas in future projects.

One of the event organizers indicated recently the potential importance and use of the data in growing ADR. “The core questions ask these stakeholders to provide their input on the same topics,” noted former International Mediation Institute chairman and current board member Michael McIlwrath, adding that the “answers to these questions arrive at a time in which civil justice around the world is facing a moment of transformation. And international arbitration is now experiencing changes that, in our view, would have been considered heretical or at least highly unorthodox just a decade ago.” See Michael McIlwrath and Phil Ray, “The Global Pound Conference Reaches Its Conclusion: User Focus Is Now Mainstream,” Kluwer Arbitration Blog (July 5, 2017)(available at http://bit.ly/2sGmTzX).

The author is a CPR Institute Summer 2017 Intern.