2 Mar 2018
UNCITRAL framework moves one step closer
The United Nations Commission on International Trade Law (UNCITRAL) Working Group II on Dispute Settlement (formerly Arbitration and Conciliation), since 2014 has been working on the preparation of a convention on the enforceability of settlement agreements reached through international commercial mediation.
The aim of this project is to formulate and implement an international framework for the enforcement of mediated settlements akin to the New York Convention for the enforcement of arbitral awards. It is hoped such an enforcement regime will increase confidence in mediation among international litigants and further proliferate the well-established benefits of reducing cost and time spent in dispute.
Working Group II, at its most recent meeting in New York at the beginning of February 2018, ratified a draft convention and a draft amended Model Law on international settlement agreements resulting from mediation. Access to the draft convention and the findings of the 68th Session, 5–9 February, New York and all previous meetings can be found here.
At the heart of this project is whether mediated outcomes should have a similar status to arbitral awards under the New York Convention to which 153 countries have signed up. Some in the mediation world might query whether such an instrument is necessary given the most mediated settlements are reached and implemented on a consensual basis thus making mediation very different from imposed arbitral awards. However, on the contrary, all commercial parties want their hard-fought outcomes to be legally binding and would normally be concerned if it was otherwise.
An international instrument recognising the legal status of mediation is yet another foundation stone in the credibility and acceptance of mediation in the international order just as courts or arbitration.
The drafts instruments resulting from the 68th Session will be considered for finalisation by the Commission at the upcoming New York session this summer. As illustrated above, there is still much debate to be had on the topic before any position is finalised and the process of ratification and domestic implementation can commence.
James South, CEDR Managing Director comments:
“CEDR has been involved in various stages of the discussions of this working group and see the recommendations made by as an important step forward for the development of mediation internationally. Once ratified and in force, it will provide certainty to parties from different jurisdictions that whatever they agree by way of mediated settlement, will be able to be enforced, through the relevant court.”