Autonomy Of The Parties And The Mediation Convention

The United Nations Convention on International Settlement Agreements Resulting from Mediation (hereinafter “the Mediation Convention”) and the Model Law on International Commercial Mediation and International Settlement Agreements Resulting from Mediation (hereinafter “the Model Law”), which was concluded by UNCITRAL at the beginning of July 2018, are two valuable developments for the international commercial mediation field.

The Mediation Convention and Model Law institute mediation as an alternative dispute resolution process to litigation or arbitration. Accordingly, the Mediation Convention enables direct international enforcement of authenticated settlement agreements resulting from mediation (hereinafter “settlement agreements”). Taking into consideration the complexity and costs of legal proceedings for the recognition and enforcement of foreign judgements, the influence of the Mediation Convention may also change the status of mediation in other fields of private international law.

Autonomy of the parties and mediation

The features of the Mediation Convention are based on the acknowledgement of party autonomy to finalize their conflict in mediation by a settlement agreement that binds them without any requirement to approve it in court. Therefore, the basic element of mediation, as stated in its definition in article 2 of the Mediation Convention, is that the mediator does not have any authority to impose a solution on the parties and they retain their autonomy whether to settle it by consent.

Accordingly, the mediator is an impartial professional facilitator who: (a) establishes a relationship between the disputants to enable a dialog regarding their conflict;  (b) approves their capability to freely negotiate toward a settlement in good faith; (c) conducts negotiations in a fair manner; and (d) attests that they freely reach an informed consent consensus settlement. Hence, mediation is not a negotiation format but rather a triad dispute resolution mechanism, constituted by an agreement to mediate, in which the parties’ settlement prima facie means that they finalize their dispute by a binding agreement. This is stated in article 15 of the Model Law: “If the parties conclude an agreement settling a dispute, that settlement agreement is binding and enforceable.”

Distinguishing mediation from arbitration

This genuine concept of the Mediation Convention and the Model Law on autonomy of the parties to finalize their dispute by mediation distinguishes mediation from arbitration. In arbitration, the parties agree to authorize an arbitrator to decide on the issue of their dispute and they bind themselves to the arbitrator’s resolution for better or worst. Consequently, an agreement to arbitrate relinquishes access to justice in courts. Therefore, an agreement to arbitrate and an arbitration award require recognition to validate them in a foreign state for enforcement, according to articles 2 and 3 of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (hereinafter “the Arbitration Convention”).

Moreover, according to the Mediation Convention and the Model Law, parties in states where mediation is not legislated can apply for their mediation to be as per article 4 of the Model Law: “This section also applies to commercial mediation when the parties agree that the mediation is international or agree to the applicability of this section.” In other words, mediation functions as customary private international law similar to traditional lex mercatoria (merchant law). Nowadays, oversea mediation is an efficient widespread practice, conducted through Skype for example. Hence, parties should not be artificially required to subject their cross-border mediation to the law of one of their states, but may instead agree to apply the Model Law to their mediation.

The Mediation Convention and the Arbitration Convention

As noted above, the Mediation Convention distinguishes enforcement procedure of settlement agreements from enforcement of arbitral awards according to the Arbitration Convention. However, this should not have prevented the draft Mediation Convention from following the policy of the Arbitration Convention to enable enforcement of domestic awards in foreign states without distinguishing between commercial and other awards. The Arbitration Convention generally acknowledges autonomy o the parties to finalize their dispute in arbitration and to agree that the arbitral award is binding. This mutual obligation of the parties is not connected to the state sought for recognition and enforcement of the award. Therefore, the Arbitration Convention applies to arbitration awards per se and enables enforcement of domestic awards in foreign states.

Parties to mediation have nonetheless accepted an obligation to fulfil their settlement agreement. Therefore, the Mediation Convention should have followed the Arbitration Convention and apply to settlement agreements in general – domestic or cross border, commercial or other settlement agreements – as well as when settlement agreements are approved by a court, concluded before a court, or enforceable as arbitral awards. The adjustment of the Mediation Convention’s norms to those of the Arbitration Convention can afford parties in all states, including those who have not regulated mediation by law, the ability to finalize their dispute in a peaceful manner through a settlement agreement without a litigious fight and enforce settlements in all party states. I hope that in the near future, The Hague Conference on Private International Law will draft a general convention to universalize mediation and other alternative dispute resolution processes to give effect to the value of party autonomy.

Written by Dr. Peretz Segal.

Dr. Peretz Segal established the Israeli National Center for Mediation & Dispute Resolution for the development and implementation of government ADR policy in 1998. He served as its Director until 2003. Nowadays, he is a Director and Honorary President of the Israeli Association for Mediation and Conflict Resolution.

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