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Making Cross-border Mediation Real

Special Reports
by Martin Burns In August 2019, 46 nations, including China and the USA, gathered in Singapore to sign the United Na- tions Convention on International Settlement Agreements Resulting from Mediation. Known more simply as the “Singapore Mediation Convention, it represents an international dispute resolution frame- work, which improves cross-border enforceability of settlement agreements. It provides businesses with certainty and guarantees that have previously been absent in relation to mediated outcomes of disputes. Enforcement of mediated agreements of cross- border disputes is often complicated. The parties may agree to court proceedings in one jurisdiction, but the court's judgment may then need to be enforced in another jurisdiction where the other party’s assets are located. This can involve significant time and costs and prevent a party from receiving monies, or other remedies, that were agreed at the mediation. These potential enforcement issues can easily dampen any enthusiasm the parties had to engage in mediation in the first place. Another thing that can discourage mediation is when parties approach mediation as if it were a “one size fits all” process, and not something that can be easily engineered and deployed to meet the needs and priorities of different sizes and types of businesses. The Singapore Mediation Convention represents a hugely positive step forward for the promotion of mediation of cross-border commercial disputes. And while many commentators have naturally focussed on the fact that the Convention permits quicker and simpler enforcement of settlement agreements, it is the description of what mediation is in Article 2 of the Convention that may do most to encourage parties to use it to resolve their disputes. For many lawyers and other professionals, who regularly use litigation, arbitration and other dispute resolution procedures, the temptation is find a reliable methodology that they understand and stick with it. Some arbitrators and adjudicators will follow the same path, regardless of whether a dispute before them is about a few thousand dollars or many mil- lions, or whether the issues at the heart of a dispute are enormously complex or straightforward I know of a few timeworn arbitrators and adjudicators who have used the same letter templates and directions in every case they have dealt with for decades. It seems they must follow a familiar and well-worn path regardless of the relative complexity and/or value of the dispute they are dealing with. The path they fol- low can often be painstaking and detailed. This may be fine when a dispute is multi-faceted and involves enormous sums of money, but the problem is that these arbitrators and adjudicators can give no consideration to adapting their approach where disputes are about simple clear-cut matters. They will apply the same procedure and take just as long to resolve a simple dispute as they would a complex multi-issue dispute. And it is the parties who generally have to pay for it in time, money and resources. Article 2(3) of the Singapore Mediation Convention defines mediation as a method for resolving disputes whereby they endeavour "to reach amicable settle- ment of their dispute with the assistance of a third person or persons ('the mediator'). The difference be- tween a mediator and a judge, arbitrator or adjudicator is that a mediator lacks “the authority to impose a solution upon the parties". As long as any settlement that a party wishes to en- force falls within this definition, the Singapore Convention applies, even if the process is not actually called a "mediation". Furthermore, there is no need for a mediation be formally supervised by a media- tion institution or conducted by a government and/or institutionally approved mediator. The Convention thus provides a deliberately non-prescriptive definition of mediation. It is this in-built flexibility that makes the Convention meaningful and will thus make mediation an attractive proposition for businesses. For some years, UK commercial operations have been adapting mediation techniques to accommodate their, and their clients’, business priorities and idiosyncrasies. Transport for London (TfL), which is responsible for, amongst other things, running the London Under- ground system, engages many 100s of suppliers on contracts ranging from simple maintenance works to full scale refurbishment of lines and stations. Given the vast array of works and numbers of contracts involved, the potential for disputes between TfL and suppliers has, historically, been enormous. In recent years, however, TfL and contractors have embraced a dispute resolution procedure, known as CAP, which applies mediation techniques, though no one concerned with it actually refers to it as mediation. The procedure involves parties endeavouring to reach amicable settlement of disputes with the assistance of independent third-parties, who are subject matter experts appointed through the Royal Institution of Chartered Surveyors (RICS), who cannot impose settlement. Over the past 3 years, the CAP procedure has greatly reduced the numbers of disputes and associated costs on TfL contracts. CAP is an innovative form of dispute resolution that particularly lends itself to major infrastructure projects where there are lots of suppliers, and potentially lots of money at stake if they get into disputes It is clear that the Singapore Mediation Convention can, and will, offer considerable support to organisations and businesses based in countries that have signed up to it. It will enable parties to develop and implement cross-border dispute resolution procedures that address their special needs and priorities, rather than having to follow someone else’s procedure. Parties can adapt procedures, like CAP, that are designed to help parties achieve agreed settlements and provide certainty that settlements can be simply and effectively enforced. They can even design their own bespoke mediation process in the confidence that it can achieve, not only agreed outcomes but, final and binding results too. Martin Burns RICS, Head of ADR Research and Development 09 September 2019
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