5 September, 2018

Singapore Convention on enforcement of mediated settlement agreements published

Further to our earlier post, the Singapore Convention has now been published. It will be signed in Singapore on 1 August 2019 and will come into effect six months after at least three states have ratified it.

The drafters’ goal is for the Singapore Convention to be for mediation what the New York Convention is for arbitration.  That the Convention is potentially significant in terms of enforcement is clear. But it is also important in terms of elevating the status of international commercial mediation and lending greater credibility to the process. Much will depend on uptake, but with the New York Convention as a blueprint, the goal is to secure numerous signatory states at the outset.

The Convention will aid enforcement of mediated settlement agreements relating to international commercial disputes, being those where:

  • at least two parties to the settlement agreement operate in different contracting states; or
  • the state where the substantial part of the settlement agreement is to be performed is different to where the parties to the settlement conduct business; or
  • the state where the settlement agreement is most closely connected is different to where the parties to the settlement conduct business.

The Convention carves out consumer, personal, household, family, inheritance and employment disputes from its jurisdiction.

There are various procedural requirements for the underlying settlement agreement to qualify for enforcement under the Convention. There are also grounds for refusing to grant relief listed in the Convention. These include the incapacity of the parties, invalidity of the settlement agreement, serious breach of mediator standards, mediator bias and public policy.

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26 July, 2018

UK commercial mediation market grows 20% – CEDR mediation audit results published

The Centre for Effective Dispute Resolution (CEDR) has released the results of its Mediation Audit 2018, based on a survey of practising mediators in the UK. (The results of parallel surveys of lawyer attitudes to mediation, and of US practitioners’ views, are to be published separately).

The audit is the eighth biennial survey CEDR has conducted in the last 16 years (in conjunction with the Civil Mediation Council).  The 2018 audit received 336 responses from UK mediators.

While it is important to bear in mind the empirical limitations of such reviews based on survey responses from a sample of market participants, the audit does indicate a number of interesting trends in civil and commercial mediation in the UK.    CEDR’s key findings from the responses include: Continue reading →

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27 June, 2018

New convention on the enforcement of mediation settlement agreements approved

On 26 June, at the 51st session of UNCITRAL, final drafts for a Convention on the Enforcement of Mediation Settlements and corresponding Model Law were approved. This paves the way for adoption by UNCITRAL’s Commission later this year. It is understood that the Convention will be called the Singapore Mediation Convention and will be signed at a ceremony in Singapore in 2019. The Convention must then be ratified by at least three member states to come into force.

Approval of the drafts represents the culmination of several years’ work by UNCITRAL Working Group II. Its aim has been to implement an international regime for the enforcement of mediated settlements broadly akin to the 1958 New York Convention for the enforcement of arbitral awards. This will increase the attraction of mediation for international parties, with all its well-known cost efficiencies and other potential benefits.

The initiative stems from a concern that the use of mediation to resolve international disputes has been impeded by the fact that, unless a  settlement reached via mediation is in the context of a pending arbitration and can be converted into an arbitral award,  parties can only enforce it in the same way as any other contract. In an international context, this can involve potentially difficult (and usually lengthy) processes to obtain a court judgment and then enforce it in a foreign jurisdiction.

Whilst problems of enforcement of mediated settlements have been sparse in practice (certainly compared to court judgments or arbitral awards), the Convention will no doubt add credibility to mediation as an international dispute resolution process. It will also make mediation particularly well suited to cross-border disputes.  At the Global Pound Conference series, delegates in Asia, Africa, the Middle East and Latin America all revealed a desire for legislation or conventions to promote the recognition and enforcement of settlements. This may reflect the varied and complex legal and political frameworks in these regions. Many of those surveyed manage businesses and disputes across several borders, where legal regimes can vary from stable, tested and familiar to those that are only a decade old. The call for regulation and certainty is even more critical as the pace of development intensifies through new trade treaties and investment, and massive initiatives such as the Belt and Road. The Convention and Model Law look set to respond well to this demand and may hail an inflection point for the use of mediation in these developing regions.

Materials approved on 26 June have not yet been made available on the relevant UNCITRAL webpage.  However they will in due course be posted on this page, which currently contains the most recent drafts (from February 2018) together with other details of the initiative.

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6 June, 2018

Dispute resolution in Asia-Pacific: Parties seek efficient processes and enforceable outcomes

Following our report on the Global Pound Conference series, which brought together over 4000 stakeholders at 28 conferences worldwide, our analysis of the Asia Pacific results reveals different demands in Asia and Oceania.

Six Asia Pacific cities hosted conferences to assess how dispute resolution can be improved: Singapore; Hong Kong; Chandigarh, India; Bangkok, Thailand; Sydney, Australia and Auckland, New Zealand. Each conference addressed the demand side (commercial party perspectives on dispute resolution); the supply side (what advisers and providers are delivering to commercial parties); the key obstacles and challenges; and what needs to be addressed to effect change.

Region-wide, the data highlights that commercial parties want to use mediation and other ADR processes more, either alone or as an adjunct to adversarial proceedings. However, the data shows that the market is not responding adequately. As a result, mediation remains under-utilised, and actual use lags behind positive attitudes to it. Unless parties and their advisors actively take a different course (for example through inserting escalation clauses in contracts, actively proposing mediation at the point of dispute, or by following mandatory mediation protocols), there is likely to remain a perpetuation of the “same old processes” – litigation and arbitration.

Read more analysis of the Asia Pacific results on our Asia Disputes Notes blog here.

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29 May, 2018

ADR in employment disputes

The Herbert Smith Freehills employment team has published an article examining the role of ADR within employment disputes, including considering the findings outlined in the recently released Global Pound Conference Report in the context of employment disputes in the key jurisdictions of Australia, France, Germany, Spain and the UK.

The briefing discusses the availability – and pros and cons – of various ADR methods for employment issues in those jurisdictions.  As we have previously reported, one of our London partners, Peter Frost, has co-chaired (with Paul Goulding QC of Blackstone Chambers) various reports on this issue by the Employment Lawyers Association’s Arbitration and ADR Group, and the article also reflects on those findings.

Click here to read the article.

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18 May, 2018

Global Pound Conference report published

The Global Pound Conference series – a unique and ambitious initiative to inform how civil and commercial disputes are resolved in the 21st century – brought together over 4000 dispute resolution stakeholders, at 28 conferences spanning 24 countries worldwide.

Herbert Smith Freehills, global founding sponsor of the series, has teamed up with PwC and IMI (International Mediation Institute) to identify key insights that emerge from the extensive voting data collected during the series. With a focus on the needs of corporate users of dispute resolution, this ground-breaking report challenges the traditional and fundamental notions of what clients want and how lawyers should represent them in a dispute. We identify four key global themes along with four notable regional differences.

Global themes emerging from the voting data reveal:

  • Efficiency is the key priority of parties when choosing dispute resolution processes.  Most dispute resolution continues to have as its frame of reference an adversarial process (litigation or arbitration) based on asserted legal rights. Yet two thirds of in-house counsel canvassed at GPC events said they require more efficiency in dispute resolution. This questions whether traditional dispute resolution processes still meet the needs of end users.

  • Parties expect greater collaboration from advisors in dispute resolution. Around two thirds of in-house counsel said they need to see more collaboration from their lawyers. This applies when lawyers are interacting with both  clients and opponents. This questions traditional notions of how lawyers should represent clients. Is the zealous advocate, fighting their client’s corner tenaciously at all costs, still appropriate?

  • Global interest in the use of pre-dispute protocols and mixed-mode dispute resolution. With the data pointing towards a more collaborative and efficient approach, unsurprisingly delegates felt that disputing parties should be encouraged to consider processes like mediation before they commence formal proceedings. The data also showed a growing desire by parties to use mediation in parallel with litigation and arbitration.

  • Some uncomfortable home truths for lawyers. In-house counsel were judged to be change enablers. As such, they shoulder a significant responsibility to encourage their organisations (and, if necessary, their external lawyers) to consider dispute resolution options more carefully, including using processes like mediation. In contrast, 70% of global delegates said external lawyers were the primary obstacles to change in commercial dispute resolution.

These insights show the potential of the GPC series to inform further studies and discussions across the world. Download your copy of our report here to learn more.

To discuss the content of this report and its impact on your organisation’s approach to dispute resolution, please contact the authors.

 

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11 May, 2018

CEDR launches its UK and US Mediation Audit 2018

The Centre for Effective Dispute Resolution (CEDR) is inviting interested parties in the UK and US to take part in its Mediation Audit 2018.  

The audit, run in conjunction with the Civil Mediation Council and International Institute for Conflict Prevention and Resolution (CPR), is the eighth audit that CEDR has conducted over the last 16 years.  The surveys are a valuable source of data on various aspects of the mediation landscape, including settlement rates, perceptions of mediation standards and priorities for development. (We reported on the results of the last audit here.)  This year, in partnership with CPR, the Mediation Audit will extend to the United States for the first time, allowing for a comparison to be drawn between mediation practice in the UK and US.

To take part in the 2018 Audit please follow the appropriate survey:

UK and US Mediator Audit

UK and US Lawyer Audit  (for both in-house and private practice lawyers)

Each survey should take no longer than 10 minutes and is on an anonymous basis.

 

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10 May, 2018

Podcast: How arbitration and ADR can be used together

In this short podcast Professional Support Consultants Hannah Ambrose and Vanessa Naish look at how Arbitration and Alternative Dispute Resolution (ADR) can work together. The podcast considers how parties can agree to an ADR process in addition to or alongside arbitration (looking at approaches in different jurisdictions and under different arbitral institutional rules), before turning to the complexities of drafting escalation clauses in contracts. Finally it looks at how a successful settlement should be formalised to be most effective and enforceable.

For more on this topic, see our guide ‘Use of mediation in arbitration‘, from our popular series of ADR Practical Guides.  (The full set of ADR Practical Guides can be accessed here – including a business-friendly introduction to mediation and guides to preparing for a mediation).

For further information, please contact Hannah Ambrose, Vanessa Naish or your usual Herbert Smith Freehills contact.

Hannah Ambrose
Hannah Ambrose
Professional Support Consultant
Email | Profile
+44 20 7466 7585
Vanessa Naish
Vanessa Naish
Professional Support Consultant
Email | Profile
+44 20 7466 2112

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30 April, 2018

Belt and Road: Supporting the resolution of disputes

We have previously commented on how the sheer complexity and scale of China’s ambitious Belt and Road Initiative is prompting a welcome review of dispute resolution processes including efforts, led and supported by the Chinese government, to encourage mediation clauses in Belt and Road agreements.

In the following article, first published on http://arbitrationblog.kluwerarbitration.com on 16 April 2018, Mingchao Fan (ICC) and Briana Young and Anita Phillips (Herbert Smith Freehills) review the latest development in the efforts to support the resolution of Belt and Road disputes.

 

On 5 March 2018, the ICC Court announced the establishment of a commission to address dispute resolution in relation to China’s Belt and Road Initiative. The commission will drive the development of ICC’s existing dispute resolution procedures and infrastructure to support Belt and Road disputes.

The Belt and Road

The Belt and Road is China’s ambitious infrastructure project spanning more than 70 countries, with an increasing number of non-Chinese investors, contractors and developers – including sovereign states – involved. The project aims to build connectivity and cooperation between China across the land-based Silk Road Economic Belt and the 21st Century Maritime Silk Road. It spans large parts of Asia, the Middle East, Africa and Europe.

A construction and infrastructure initiative on this scale will inevitably generate disputes. With an estimated US$900bn in projects planned or already underway, the project gives rise to a multitude of actual and potential commercial disputes to consider. In response to this, Alexis Mourre, President of the ICC Court, announced the establishment of the commission during the ICC Court’s working session last fall.

It is a competitive field, with numerous existing institutions vying for a share of the Belt and Road disputes market, and new courts and institutions being established specifically for the purpose. It seems clear that parties who adopt the right dispute resolution model in their contracts today will be in a better position to resolve disputes as and when they may arise.

Make-up of the Commission

Justin D’Agostino, Global Head of Disputes at Herbert Smith Freehills and Hong Kong’s alternate member of the ICC Court, has been appointed commission chair. Dr Mingchao Fan, ICC Director for North Asia, will act as secretary. Other commission members are drawn from a range of sectors, representing jurisdictions including the PRC, Hong Kong and Singapore. A broader advisory board, representing other countries along the Belt and Road, is being considered.

ICC recognises the importance of engaging key stakeholders within both corporates and governments all along the Belt and Road, to ensure that it is offering the best possible service to parties on all sides.

Although the ICC Belt and Road Commission’s main objective is to raise awareness of the ICC as a “go-to” institution for disputes arising out of China’s Belt and Road Initiative, the commission has additional relevant aims:

•  leveraging ICC’s unparalleled international coverage with secretariats and/or national committees in over 100 jurisdictions to attract Belt and Road disputes;
•  engaging with corporates, state-owned enterprises and governments across all Belt and Road territories; and
•  highlighting Belt and Road dispute resolution at a series of events throughout the region, with the aim of promoting ICC’s capabilities widely. Events are planned in locations as diverse as China, Paris, Kazakhstan, Kyrgyzstan, Nigeria, Southeast Asia, Japan and Hong Kong, with more to come.

In the Commission’s view, the combination of the ICC’s tried-and-tested, multi-process services, its unrivalled geographical footprint, and its established credibility and independence, place it in a strong position to resolve Belt and Road disputes.

Sector expertise

On average, construction and engineering disputes account for close to a quarter of all ICC arbitration cases, while the finance and insurance sector accounts for approximately 20%. As the world’s leading arbitral institution, ICC is adept at handling complex multiparty cases as well as high-value, complex multi-party and multi-contract disputes (approximately half of all cases filed involve three or more parties). The introduction in 2017 of an expedited procedure also enables lower-value cases to be handled with greater time- and cost-efficiency.

Mediation matters too

There is no ‘one-size-fits-all’ method of resolving Belt and Road disputes. But there is a concerted effort, led and supported by the Chinese government, to encourage mediation clauses in Belt and Road agreements, with provision for arbitration if mediation fails. ICC is a world-leading arbitration and mediation provider, with tried and tested mechanisms and a strong pool of arbitrators and mediators. It is therefore well placed to provide appropriate, effective dispute resolution services to parties all along the New Silk Road. ICC’s stated objective is to ensure that where disputes arise, they are resolved efficiently and with minimal damage to the parties’ commercial relationships.

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20 March, 2018

Article published – ADR reform: one size does not fit all

On 6 March, the Civil Justice Council held a workshop to discuss the recommendations made in its interim report on ADR, which was subject to consultation late last year. The interim report addresses concerns regarding a perceived underuse of ADR within some sections of the civil justice system and suggests a variety of possible corrective measures. The proposals include a power for the court to determine whether costs sanctions should be imposed for unreasonable conduct relating to ADR (such as an unreasonable refusal to mediate) not only at the end of a case, as currently, but during the matter when the decisions regarding ADR are taken.

Jan O’Neill has published a post on Practical Law’s Dispute Resolution blog in which she questions how realistic the suggestion of “midstream” assessment of parties’ conduct relating to ADR would be in practice. She suggests that many of the concerns expressed in the report as to the underuse of ADR are not relevant to many larger, complex claims, and urges the working group to tailor any final recommendations to the specific courts or dispute types for which the evidence suggests they are needed and practicable.

Click here to read the post (or here for the Practical Law Dispute Resolution blog homepage).

 

 

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