CONSTRUCTING THE CONVENTION ON MEDIATION

• Citation: (2019) 31 SAcLJ 487
• Published date: 01 December 2019
• Date: 01 December 2019

I. Introduction

It always seems impossible until it's done.

Nelson Mandela

1 In its work from 2014 to 2018 on mediation, the United Nations Commission on International Trade Law (“UNCITRAL”) achieved a consensus outcome that had eluded it in 2002. As part of this consensus outcome, we now have a cross-border regime for international mediated settlement agreements to be enforced and invoked.

2 The cross-border regime comes in the form of a multilateral convention: the new United Nations Convention on International Settlement Agreements Resulting from Mediation,1 which will also be known as the Singapore Convention on Mediation (“Singapore Convention”).2 The text of the Singapore Convention was adopted by the United Nations (“UN”) General Assembly in December 2018, and will open for signature in Singapore on 7 August 2019.

3 This work by UNCITRAL was undertaken following a proposal in 2014 to develop a multilateral convention on the enforceability of international commercial settlement agreements reached through mediation, with the goal of encouraging mediation in the same way that the Convention on the Recognition and Enforcement of Foreign Arbitral Awards3 (“New York Convention”) had facilitated the growth of arbitration.4 Over a decade ago, UNCITRAL had considered the question of enforcement of settlement agreements when preparing its Model Law on International Commercial Conciliation.5 As part of their work then, the “smallest common denominator between the various legal systems”6 was to leave the question of how to address the enforcement of conciliated settlement agreements to individual states that chose to enact the Model Law on International Commercial

Conciliation.7 In other words, no real agreement could be reached at the time.8 The differences in views in 2002 over the possibility of an international mechanism for enforcement continued to persist in 2014.9 Many a time during the UNCITRAL discussions, it seemed that the differences in views could not be reconciled. However, all who were part of the process were dedicated to constructive dialogue. This enabled us to achieve informed mutual understandings of the core positions and interests, so that we could construct a Convention that we hope will stand the test of time.

4 This article will examine the history of the discussions that led to the Singapore Convention, as well as the key issues of the packaged deal that made the Singapore Convention possible. This article seeks, through an exploration of the considerations that went into finalising the issues of the compromise package, to appreciate the considerations behind the construction of the Singapore Convention. Part II10 will study UNCITRAL's earlier work on international commercial conciliation, with a specific focus on the discussions regarding a harmonised approach to enforcement; and Part III11 will examine UNCITRAL's latest work on the enforcement of mediated settlement agreements, through the lens of the five-issue packaged deal, and will include some of my reflections from having chaired the process; before concluding remarks are offered in Part IV.12

5 In this article, as in the Singapore Convention, “mediation” refers to instances where disputing parties seek to reach an amicable settlement with the assistance of a third party who lacks the authority to impose a solution at the time of the mediation.13 Furthermore, in this article, the terms “mediation” and “conciliation” are used interchangeably. UNCITRAL's earlier work uses the term “conciliation”. In the Singapore Convention (and the amended Model Law on International Commercial Mediation and International Settlement Agreements Resulting from Mediation14 (“the amended Model Law”), the term “mediation” is used, as it was assessed that it was the more widely used term internationally. The intention, however, was not to introduce any substantive change in meaning. Rather, the term “mediation” is intended to “cover a broad range of activities that would fall under the definition as provided in article 1(3) of the Model Law regardless of the expressions used”.15

II. UNCITRAL's earlier work on the 2002 Model Law on International Commercial Conciliation

6 UNCITRAL was established in 1966 with the mission of enhancing world trade by harmonising international trade law.16 The

harmonisation of laws takes place through, amongst others, the preparation of instruments such as international treaties or conventions, model laws, legislative guides and model provisions.17 An element of the harmonisation project is also served through educational efforts such as databases and training and capacity-building initiatives.18

7 UNCITRAL has work processes in place that enable it to work – generally successfully – to find suitable common ground for the building of harmonised approaches and legal responses to a variety of issues in international trade.19 Foremost of these are its convening power, which ensures input from different legal cultures and traditions as well as the relevant expertise,20 and its consensus-basis of decision-making, which enables the identification of points of convergence for viable options for harmonisation. In UNCITRAL, there is “a conscious striving for balance, whether between developed countries or between socialist and market economy countries”.21

8 In 1980 and 2002, UNCITRAL had adopted instruments that had the objective of harmonising international commercial conciliation: (a) the Conciliation Rules;22 and (b) the Model Law on International Commercial Conciliation. In the course of UNCITRAL's work on the Model Law on International Commercial Conciliation, the question whether a settlement reached during a conciliation should be treated

“as an enforceable title as, or similarly to, arbitral awards” was discussed. Views were divided on the question.23

A. Views for and against a harmonised approach to enforcement

9 The issue was whether a harmonised model provision on enforcement was to be pursued. Views against harmonisation were accompanied by various reasons which showcased the not-so-straightforward relationship between conciliated settlement agreements and arbitral awards, occasioned by the dissociation and association between the two that was sought. The reasons can be placed into two categories: (a) conceptual difficulties with distinguishing amongst settlement agreements to determine which could be enforced akin to arbitral awards; and (b) lack of need for a harmonised mechanism of enforcement.

10 In terms of the conceptual difficulties, it was said that it would be difficult to distinguish in a legislative provision between settlements that should, and settlements that should not, be treated as enforceable titles. It was also said that there were fundamental differences between arbitration and conciliation that rendered it inappropriate to equate conciliated settlement agreements with arbitral awards. In other words, conciliated settlement agreements and arbitral awards needed to be dissociated from each other.

11 In respect of the lack of need, delegations argued that there was no need to treat such settlement agreements as enforceable titles because many states had simple ways of rendering settlement agreements enforceable. These ways included converting the settlement into a notarised document, or obtaining a judicial sanction for the settlement. Further, if the parties to the settlement agreement wanted to make their agreement an enforceable title, they could initiate arbitral proceedings with the sole purpose of converting the settlement award into an arbitral award on agreed terms.24 In a sense, conciliated settlement agreements benefited from being associated with arbitral awards.

12 Views in favour of harmonisation in this regard were premised on the satisfactory functioning of legislation in some states that treated conciliated settlement agreements as enforceable title. Regarding the

lack of a need, it was pointed out that not all states had simple ways of rendering settlement agreements enforceable. Further, sometimes the parties to a settlement agreement did not take advantage of the ways of rendering their agreement enforceable at the time the agreement was entered into; the need to enforce the settlement only became apparent later when one party refused to live up to its part of the deal. Some delegations also suggested that legislation to that effect would increase the attractiveness of conciliation.25

B. Options considered for a harmonised approach

13 Subsequently, to assist in the UNCITRAL Working Group's deliberations, a draft model provision was prepared. The provision simply stated that a conciliated settlement agreement would be binding and enforceable, but otherwise left it to the enacting State to insert provisions specifying provision for the enforceability of conciliated settlement agreements.26 A unified, harmonised solution regarding how conciliated settlement agreements might become enforceable was not attempted. This was because legislative approaches to the enforceability of conciliated settlement agreements “differ[ed] widely”.27

14 It was explained that some states left such settlements to be enforced as contracts, whereas others provide for expedited enforcement of such settlements. There were other states that treated settlement agreements as having the same effect as a final award in arbitration, and still other states that enabled settlement agreements to be enforced pursuant to provisions for the enforcement of court decisions. Against this backdrop, the UNCITRAL Working Group was asked to consider whether it would be desirable and feasible to prepare a uniform model provision and, if so, what the substance of the uniform rule should be. As an alternative, it was suggested that instead of providing a uniform solution, guidance could be given in the guide to enactment in the form of setting out possible solutions.28

15 After the UNCITRAL...