Origins of the Practice of Mediation
The origins of mediation remain uncertain, as some believe the practice started in 1800 B.C. with Modern Syria, where Mari kingdom used it to resolve their disputes with other kingdoms. Others, however, trace it to Phoenician commerce, ancient Greece and also to Roman society. For the purposes of our essay, it is rather imperative to trace the origins of international mediation.
Spanning several epochs, from the diplomatic efforts by representatives of several Greek units to form a truce between Macedonia and the Aetolian League during the First Macedonian War in 209 B.C., to the decree by Pope Alexander VI to establish spheres of influence for Portugal and Spain in the New World in 1493, to efforts by President Jimmy Carter in 1978 that led to the Camp David Accords and long-standing peace between Egypt and Israel, mediation has had an enduring existence.
The International Law Regime on Mediation
With regard to international law, the 1856 Declaration of Paris is one of the earliest international agreements that encouraged member States to settle maritime dispute through recourse to mediation. Of the Hague Conventions of 1899 and 1907, the former resulted in the adoption of the Convention for the Pacific Settlement of International Disputes. A reading of Article 6 of the Pacific Settlement of International Disputes (Hague, I) shows us that mediation has “exclusively the character of advice and never have binding force.”
The 1945 Charter of United Nations, the foundational treaty of the UN, is important to be mentioned here. Art. 2(3) mentions that states, in addition to settling their disputes, hall also take into account the protection of international peace, security, and justice. The UN Charter mandates all Members to submit disputes to mediation following recommendation by the Security Council, and Article 33 (1) of the Charter names mediation as one of the preferred mechanisms for settlement of international disputes.
The first provision of Article 33 in Chapter VI on the Pacific Settlement of Disputes, UN Charter reads as follows:
Should settlement be failed to reach by employing such means, under Article 37, they are called upon to refer it to the Security Council. The Council, or the General Assembly, if the dispute is referred to it, then commences the process of the form of settlement that it believes is suited to the particular case.
The Declaration of Principles of International Law Friendly Relations and Co-operation among States in accordance with the Charter of the United Nations was adopted by the General Assembly on 24 October 1970 (resolution 26/25 (XXV)). It provides the principle of settlement of international disputes by States by peaceful means such that “international, peace, security and justice” are not threatened. Again, it provides for timely and fair settlement of international disputes by “negotiation, inquiry, mediation, conciliation, arbitration, judicial settlement, recourse to regional agencies or arrangements or similar peaceful means”, as preferred by the parties.
The Manila Declaration on the Peaceful Settlement of International Disputes (A/37/590), adopted on 15 November 1982 also reinforced the settlement of international disputes through peaceful means and declared settlement via various means, including mediation (point 5).
In addition, Article 27, paragraph 2 of the Convention on Biological Diversity also suggests mediation as a dispute settlement mechanism.
Part XV of the United Nations Convention on the Law of the Sea on the settlement of disputes in Section 279 also provides for an obligation to settle disputes by peaceful means in accordance with Article 2, paragraph 3 of the Charter of the United Nations and seek a solution by the means specified in Article 33, paragraph 1 of the Charter.
Finally, there also exist several regional agreements, including the American Treaty on Pacific Settlement (1948), the European Convention for the Peaceful Settlement of Disputes (1957), and the Protocol of the Commission of Mediation and Arbitration of the Organization of African Unity (1964). Besides general treaties as such relating to dispute settlement, there are several bilateral and multilateral agreements that include specific clauses related to dispute settlement.
The Quandary of enforcement of settlements arising out of International Commercial Mediation
Over the centuries, mediation use and research has increased manifolds, and although mediation is an increasingly visible part of the international commercial disputes setting, it has not achieved a uniform status globally. A study published by the European Commission in June 2010 indicated that, on an average, mediation was only being used in approximately 0.5 per cent of all litigated cases over Europe, an indisputably dismal number.
Despite the inclusion of mediation as a peaceful form of settlement in international documents, mediation failed to achieve the status of the preferred means of dispute resolution owing to the difficult in enforcement of mediated settlement agreements.
In a survey conducted by the International Mediation Institute in 2014, 93 per cent of the respondents said they were likely to mediate a dispute with a party from another country given that country had ratified a convention on the enforcement of settlement agreements arising out of mediation.
It is to be seen that the European Union Directive 2008/52/EC of the European Parliament and of the Council on Certain Aspects of Mediation in Civil and Commercial Matters (“EU Mediation Directive”) provides a structure for cross-border mediation. However, the directive does not lay down provisions for direct enforceability. In its Article 6.1, it merely states that “Member States shall ensure the possibility for the parties, or for one of them with the clear consent of the others, to seek that the content of a written agreement resulting from mediation be made enforceable”.
Where international commercial mediation disputes are concerned, we have the UNCITRAL (United Nations Commission on International Trade Law) Model Law on International Commercial Mediation and International Settlement Agreements Resulting from Mediation (the “Model Law”) in place since 2018 (amending UNCITRAL Model Law on International Commercial Arbitration, 2002). It is modeled along the same lines as the New York Convention on International Commercial Arbitration. In Section II of the Model Law, related to International Commercial Mediation, Article 15 lays down the binding and enforceable nature of settlement agreements. It states that a settlement agreement that the parties reach is binding and enforceable.”
Because mediated settlement agreements are entered into voluntarily by the parties instead of imposed on them by a third party ruling, they have a higher chance of performance compared with the court decisions. However, the parties may still wish for or find it necessary to create enforceable agreement. Additionally, the parties may be wary of the temptation to delay or refuse performance or changes in circumstances that could affect compliance. This need for enforceability is possibly even more acute in the international mediation context, where parties from different cultures and jurisdictions may not necessarily have a long standing or robust relationship of trust. Complications in the enforcement of international mediated settlement agreements further add to the uncertainty and transactional costs if resolving an international dispute through mediation.
This view is supported by a large number of empirical research studies. In the Global Pound Conference Survey conducted from 2016 to 2017, delegates were asked about the areas that would most advance commercial dispute resolution. The top choice (51%) was the use of legislation or conventions that encourage recognition and enforcement of settlements, including those reached in mediation. A survey published in 2016 and conducted by Stacie Strong showed that enforcement of international mediated settlement agreements was perceived as significantly more difficult than domestic mediated settlement agreements. When asked to specify whether they thought the existence of an international convention concerning the enforcement of settlement agreements arising out of international commercial mediations would encourage parties’ in the respondent's home jurisdiction to use mediation, a majority of 74% of the respondents thought that such an international instrument would support mediation.
In a 2014 survey organised by the International Mediation Institute, 90% of public accepted that the dearth of any kind of international enforcement mechanism for international mediated settlement agreements posed a chief obstruction factor to the advancement of mediation as a mechanism for resolving cross-border disputes, and 93% indicated they would be likely to mediate a dispute with a party from a country that ratified an international convention on the enforcement of mediated settlements. Another survey adopting the same methodology had 84% of respondents answering in positive when asked whether they would be more probable to use or increase use of mediation in a cross-border dispute with another party of different jurisdictions if a uniform comprehensive international mechanism was in place similar to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards' (New York Convention) to implement a settlement agreement reached in the mediation course. The desire to endorse enforceability of international mediated settlement agreements have been expressed and considered in the United Nations Commission on International Trade Law (UNCITRAL) before, including during the groundwork of the UNCITRAL Model Law on International Commercial Conciliation 2002. Numerous practitioners had put forward the view that the magnetism of conciliation would be augmented if a settlement reached during a conciliation would enjoy a regime of fast track enforcement”. The UNCITRAL also stated that it was "generally in agreement with the general policy that easy and fast enforcement of settlement agreements should be promoted". For these precise reasons supporters of international mediation see enforceability as a missing piece that could’ve have had a noteworthy impact in the use if international mediation.
This is where the Singapore Convention enters the scenario of international mediation. It caters to these concerns by obliging Convention States to implement and enforce international settlement agreements reached through mediation directly, without necessitating the non-breaching party to bring suit against the other party under the agreement. The enforcing party need only produce a copy of the settlement agreement together with evidence that the agreement was reached through the use of mediation. Convention States are only sanctioned to deny enforcement on the following grounds including:
The Convention, its Raison D'être, and Scope of Application
UNCITRAL perceived a need from the international business community for an enforcement mechanism for mediated settlement agreements in international (or cross-border) disputes akin to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958. In Feb. 2018, U.N. Commission on International Trade Law (UNCITRAL) had finalized the text to the final model to the convention. Singapore had contributed considerably, with Singaporean delegate playing an active role and chairing the final outcome. It took 3 years (2015-2018) to conclude the instrument dealing with enforcement of international settlement agreement resulting from mediation when several past attempts had failed in doing so. In Dec. 2018, the momentous decision was adopted as a convention and was named Singapore Convention. It was concluded in auspices of UN in Aug. 2019 with a signing ceremony attended by over 1000 countries’ delegates and over 40 countries signing it.
The Convention aims to present a standardized and proficient framework for the enforcement of international settlement agreements resulting from mediation and for permitting the parties to call upon such agreements, akin to the framework that the New York Convention provides for arbitral awards. The Singapore Convention addresses the issue of competent and synchronized framework that was missing, for cross-border enforcement of settlement agreements resulting from mediation, which also allays the issue of concern with respect to the institutional mediation in the country as well. India being a signatory to the Singapore Convention will advance the vision of Centre for Mediation and Conciliation to support resolution of disputes through aided dialogue and concluding them swiftly, economically, confidentially and amicably. Singapore aims to provide businesses with a full suite of user-centric options to decide cross-border disputes, whether through litigation, arbitration or mediation under the Singapore Convention on Mediation Bill. The bill has been described by Senior Minister of State for Law Edwin Tong as an important instrument that will facilitate parties to benefit from the framework that is set out in the Convention and a important step in strengthening Singapore's dispute resolution framework.
The convention was the third missing piece in ADR as many businesses rely on litigation for cross border dispute or arbitration enforced by New York Convention. Mediation is rising in reputation because it’s cost effective, dependable, classified, and flexible and efficiently allows parties to maintain direct control over outcome of the mediation. It is very attractive for businesses that want to resolve current issues while leaving an option open for future commercial relationship with each other since litigation or so would lead to a complete termination of their relationship. Mediation also complements other forms of resolution as it provides for and can be used in injunction with arbitration and litigation. Mediation has blown up in use too as countless surveys have found that majority of population choosing emphasis over collaborative over adversarial. However one might still ask what the Singapore Convention brings to the table of International Mediation Scenario other than the virtue of enforcement provisions. The answer is a multipronged array of attributes.
The Convention allows that a settlement agreement may be imposed directly by the courts of a State. This provides for the party seeking implementation to apply directly to the courts of the State where the assets are located such that execution may also be sought if the enforcement process is successful. This prevents possible numerous proceedings. The Convention will only apply where the settlement agreement is in writing; has resulted from mediation; and has been an agreement between 2/ 2+ more parties who have their place of business in various States; and the place of business of each of the parties to the agreement is in a State that has accepted the Convention. Additionally, the Convention does not apply to settlement agreements that have been permitted by a court or decided in the course of proceedings before a court and that are enforceable as a judgment in the State of that court; or that has been recorded and is enforceable as an arbitral award.
The implementation procedure involves the party seeking enforcement to provide to the pertinent authority in the State where enforcement is sought: a copy of the signed settlement agreement; and evidence that the settlement agreement resulted from mediation making it a very simplified and sophisticated procedure as compared to its likes.
Mediation is a fast, cost effective and less adversarial alternative to litigation and arbitration and solving cross border trade disputes. However, the relatively new method is still gaining acceptance and the convention will help by ensuring mediators settlement agreements can be enforced across borders by signatory members and countries. It shall help progress international trade and promised investment. The Convention is a commanding and influential statement in support of multilateralism that many multilateral institutions are in pressing need of reform. Whether the Singapore Convention will become as authoritative and prevalent as the New York Convention only time will tell. The success of the Convention will in large part depend on the extent to which it is accepted and ratified by States. Nevertheless, the Convention is probable to persuade parties involved in cross-border projects and communication to consider mediation as an inexpensive process as part of their alternate dispute resolution toolkit.
As the federal budget deadline nears, I am seeking the advice and analysis of some of the country’s most prominent negotiation gurus to illuminate the motivations driving the on-again, off-again...By Victoria Pynchon