Mediation, as a consensus-based and facilitative process, leads to the dispute settlement outside the court through the intervention of a third neutral (a mediator) that actively helps the parties in crafting a settlement agreement. Mediation helps the parties maintain their commercial relationships. Due to the complexity of disputes, the establishment of specialized arbitral institutions is gaining momentum. In the realm of art, field expertise in art law, as a niche practice of law, is required. To this effect, in the context of the institutionalization of mediation in art cases in recent years, there are a few initiatives designated to fit the needs of art disputes including the 2015 ADR Arte project of the Milan Chamber of Commerce, WIPO-ICOM Art and Cultural Heritage Project, the UNESCO’s Intergovernmental Committee for Promoting the Return of Cultural Property to its Countries of Origin or its Restitution in Case of Illicit Appropriation (ICPRCP) and the Court of Arbitration for Art (CAfA) established in 2018.
The CAfA is exclusively devoted to resolving art disputes through arbitration and mediation. It therefore becomes of interest to analyze the CAfA’s mediation rules as notable milestone in international art market. Keeping this background in mind, this piece will analyze the benefits of mediation for art disputes and the CAfA’s objectives in resolution of complex art disputes through mediation.
The Art of Mediation in the Art Disputes
Art law is interconnected with other fields like history, ethics and culture and this makes the subject matter of art law-related issues uniquely sensitive. Shortcomings of the courts, both substantially and procedurally, in art law cases including the absence of secrecy in proceedings and lack of art market expertise of judges have led to a paradigm shift from the court-based resolution to the out-of-court options like arbitration and mediation. Specifically, the market does not always accepts the decision of the courts where the question of authenticity is at stake. The Canon Tables of the Zeyt’un Gospels case and the case between the Tasmanian Aboriginal Centre and the Natural History Museum in London highlight the shortcoming of litigation in resolution of the art disputes. In Nazi era art restitution claims, “mediation is the most promoted form of ADR for resolving the disputes”.
In light of the uniqueness of a piece of artwork and the fact that human emotions often play a major role in art disputes, mediation can offer more solutions on the table since all commercial, spiritual, ethical and emotional aspects of the disputes can be taken into consideration. Properly conducted, mediation makes a fertile ground for disputes by providing collaborative process between the parties and the mediator of their choice. In mediation, parties are able to maintain control over the process of dispute settlement and following their active participation, the outcome of mediation enshrined in the settlement agreement is usually more accepted and respected. Accordingly, new options for mutual gain of the parties can be explored and the risk of subsequent disputes would be reduced.
A wide range of art disputes including authenticity and attribution, copyright and moral rights, artists’ resale rights (droit de suite), chain of title, liability for loss or damage, forgery and fraud, warranty cases, indemnity and insurance agreements are capable of being settled through mediation.
The CAfA Mediation Rules
The salient features of these Rules, that came into force on 1 January 2019, will be analyzed here. In light of the global pool of the selected mediators with an art background, some remarkable benefits can be achieved by mediation at the CAfA. In fact, akin to the same approach applied in the CAfA Arbitration Rules, one of the defining features of the CAfA’s mediation mechanism is its specific pools of mediators. The mediator shall be appointed from the Mediator Pool in the sense of article 4 of the CAfA Mediation Rules. Only in case of compelling reasons, through consultation with the administrator of the center, could a mediator be appointed from outside the pool. It is to be expected that if the parties present a plausible case why they would want to appoint a mediator outside of the Mediator Pool, this should not be an impediment. However, drawing a mediator from the Mediator Pool has the clear advantage that the persons on the list have been screened by a panel of experts in the field.
Accordingly, the mixed competence of mediators in art world’s dynamics and ADR enable the mediators of the CAfA to take into account the nuances and details characterizing disputes in art law and this feature sets the Rules apart from other institutions. Also, any examination of forensic or provenance related issues can be facilitated by appointing an expert from the CAfA’s renowned pool of universally credible experts. To this effect, deploying experts with demonstrated knowledge in the specifics of the art market will reduce the possibility of the battle of experts and will make the procedure of evidence gathering less adversarial. The CAfA Mediation Rules are thus tailormade for art disputes and have been designed to foster a conciliatory environment.
In addition to the foregoing, confidentiality as an inherent characteristic of the mediation process is protected by the CAfA Mediation Rules. The confidentiality in the mediation process would shield the parties from, reputation damage and public exposure. Despite the fact that the name of the object may be revealed under the CAfA Arbitration Rules in light of market legitimacy and confidentiality, the same is not true for the CAfA’s Mediation Rules.
One final aspect to take into consideration is the enforceability of the settlement agreement. Within the archetype of the CAfA Mediation Rules (article 8), mediators and parties may agree that “the settlement agreement referred to in Article 7(1)(a) will be laid down in an arbitral settlement award within the meaning of Article 1069 of the Dutch Code of Civil Procedure (Wetboek van Burgerlijke Rechtsvordering) and with due observance of Article 50 of the NAI Arbitration Rules. The agreement concluded for that purpose will also apply as an arbitration agreement”. This provision is intended to provide a framework for enforcement of the mediated settlement agreement and, if the parties manage to agree on this course of action, it offers the clear benefit of enforceability under the New York Convention.
It must be underlined that the United Nations Convention on International Settlement Agreements Resulting from Mediation (Singapore convention) is a “missing piece” of the puzzle since it will facilitate the cross-border enforcement of mediated settlement agreements in a systematic manner. The entry into force of the Singapore Convention would foster the use of commercial mediation globally. To date, 54 states have signed the convention. The CAfA Mediation Rules have been drafted before the entry in force of the Singapore Convention. Although the European countries have not yet signed the Convention, it would ensure global enforceability of settlement agreements and by the definition provided for the term commercial, art disputes can also fall within the ambit of the Convention.
Lengthy and unsatisfactory court proceedings have resulted in the constitution of a specialized ADR institution for art disputes, the CAfA. Parties are recommended to apply multi-tiered clauses in art related contracts that accord with the specific needs of their commercial relationship. A well drafted multi-tiered clause with a time limitation can provide an efficient and cost-effective manner of dispute resolution and incentivize parties to reach a settlement before the dispute is escalated to litigation. The language of the clause should specify whether the recourse to negotiation or mediation before arbitration is mandatory or optional.
As to recent developments, to date, no mediated settlement agreement has been officially announced to be issued by the CAfA. To promote mediation, a webinar titled “Mediation of Art Disputes under the CAfA Rules” was held on 6 July 2021 by the CAfA. Leading art lawyers and mediation experts from different jurisdictions had an interactive discussion on the opportunities and benefits of mediation for art disputes. Ultimately, “Peace is not the absence of conflict, but the ability to cope with it”, as quoted by Mahatma Gandhi, accordingly, mediation can be considered as an efficient method to cope with disputes and to establish “peace” in the art world.
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