Contemporary Issues in Mediation

Volume 3

Joel Lee, Marcus Lim

• Publisher: WSPC
• Year: 2018
• eBook ISBN: 9789813270831
• Topic: Law
• Subtopic: Arbitration, Negotiation & Mediation in Law
• Index: Law

Is it possible for mediation to strengthen the effectiveness of international commercial arbitration?

What is the role of mediation in the pursuit of restorative justice?

How successful is international peace mediation, and in particular, the efforts of the African Union?

These groundbreaking discussions, and more, have been carefully selected for publication in Contemporary Issues in Mediation Volume 3, featuring an entry from Brazil for the first time. The 12 essays cover a diverse range of topics, written by both new and experienced mediators. Practitioners may be especially interested in the section titled "Mediation Skills", featuring essays that take a micro-perspective of the mediation process and the skills deployed by mediators.

Contents:

• Foreword for the Series (William Ury)
• About the Editors
• Editors' Note
• About the CIIM Essay Competition
• Mediation Landscape:
  • If Two Heads Are Better Than One — Can Mediation Strengthen the Effectiveness of International Commercial Arbitration? (Daniel Fielding)
  • Drawing the International Crowd with the Mediation Bill and Amendments to the Civil Law Act — Will It Work? (Leow Yu Jun)
• Mediation and Social Justice:
  • Restoring Damaged Relationships: The Important Intertwining of Restorative Justice and Mediation in the Past, and Its Potential for the Future (Lidia Syahindah Binti Mohd Maliki)
  • Friends or Frenemies? Community Mediation in Singapore at the Crossroads (Clara Lim Jiaying)
  • Empowerment, Conversation, and Healing: A Closer Look at Victim-Offender Mediation of Sexual Offences (Jolin Chen Si Heng)
  • International Peace Mediation as a Recourse for International Conflict Resolution: Cooperation between the United Nations and Regional Organisations Under Chapter VIII of the UN Charter and the Example of the African Union (Roberto Baumgarten Kuster)
  • Mediating Through Power-Imbalances in the Migrant Workers Context in Singapore (Jennifer Lim Wei Zhen)
• Mediation Skills:
  • Primed for Settlement: The Application of Priming in the Practice of Mediation (Andy Yeo Yong Chuan)
  • Cognitive Biases at the Mediation Table: A Call for the Mediator's Awareness and Response (Joyce Magdalena)
  • Settlement Rates and the Pressure to Settle (Leonard Chua Jun Yi)
  • The Camel and the Lotus: Where Mindfulness Meets Mediation (Timothy Tan)
  • An Inquiry into Foucault's Conception of Power and Its Implications for Mediation Practice (Lua Chang Jie)

Readership: This series is intended for students and professionals in mediation as well as the general public.
Key Features:

• Foreward by William Ury, leading international mediator and negotiator, co-author of the seminal title "Getting To Yes" in the dispute resolution industry
• Collection of essays on unique topics in mediation, both theory and practice
• Edited by leading negotiation expert Associate Professor Lee Tye Beng, Joel, and the Executive Director of the Singapore International Mediation Institute, Marcus Lim

Part 1

Mediation Landscape

If Two Heads Are Better Than One — Can Mediation Strengthen the Effectiveness of International Commercial Arbitration?

By Daniel Fielding

I.Introduction

International commercial arbitration has proven to be an effective dispute resolution option for parties seeking to settle cross-border commercial disputes. However, the framework is not without criticism, which has seen calls by some to address issues around the speed or lack thereof, the increasing costs and the growing litigious nature of the proceedings.¹ The severity of these problems is open to debate, but regardless of whether you believe there is a crisis in international commercial arbitration or not, there is an opportunity to strengthen the effectiveness of the regime. One way of doing this is to provide parties with an opportunity to settle their dispute early in the arbitration process.²

This chapter proposes incorporating mediation into the arbitration process to achieve this. In doing so, a hybrid method could generate greater opportunities than what would normally exist in arbitration for parties to settle their disputes early. However, a hybrid method is not without its own flaws. As a result of combining adjudicative and consensus-based processes together, ethical questions in relation to the neutrality of the arbitrator/mediator can arise, which can undermine the enforceability of the award. While the hybrid method is not new, this chapter looks at it from the perspective of strengthening the effectiveness of international commercial arbitration, and ultimately concludes that in the right circumstances the hybrid method should be incorporated.

II.Strengths of arbitration and mediation as separate dispute resolution options

A.Arbitration

International commercial arbitration has become a popular method for resolving cross-border disputes for parties seeking to avoid the high cost of litigation and ensuring the enforceability of the awards.³ It is not hard to understand why international arbitration offers similar benefits to domestic arbitration. It provides binding and enforceable awards, allows for party autonomy in selecting the arbitrators and in tailoring the process to meet the needs of the parties, and the details of the proceedings remain private and confidential.⁴ In addition, international commercial arbitration also allows the parties to select the procedural and substantive law of the arbitration.⁵

The ability to enforce arbitral awards in foreign jurisdictions is the result of an effective regime of multilateral and bilateral conventions and treaties.⁶ The primary convention is the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“the New York Convention”),⁷ which is seen by many practitioners as “a lighthouse in the ever-so-rough sea of transnational commercial law”.⁸ The attractiveness of the New York Convention is “the simplicity of its procedures and the limited grounds afforded to national courts to refuse award enforcement”.⁹ These limited grounds have been embraced by most trading nations through the adoption of the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Arbitration (“the Model Law”)¹⁰ as the only basis on which an arbitral award may be set aside.¹¹

B.Mediation

Mediation comes in many variations, and may “vary considerably between different fields of activity, models of practice, cultures… and roles adopted by individual practitioners”.¹² For the purposes of this discussion, a reference to mediation is to an interest-based process with focus on the shared interests of the parties and value creation, as opposed to a competitive approach that looks at value claiming.¹³ Despite the variations, at its core, mediation provides a dispute resolution option that: (1) allows a neutral mediator to help parties see the strengths and weakness of their case more clearly, (2) helps parties step outside of an adversarial framework and entrenched positions,¹⁴ (3) empowers parties to reach mutually agreeable solutions through consensus-based decision making,¹⁵ (4) preserves ongoing relationships, and (5) creates solutions that would not be available through adjudication.¹⁶ Like arbitration, mediation also provides a confidential environment in which to settle disputes between parties.

III.Blurred lines — Mixing mediation with international commercial arbitration

While the UNCITRAL Model Law on Conciliation¹⁷ provides that mediated settlement agreements (MSAs) are binding,¹⁸ it does not prescribe any enforcement procedures.¹⁹ The absence of any international enforcement procedures has resulted in parties finding creative ways to enforce cross-border MSAs by looking outside of mediation. The principal way has been to look to international commercial arbitration and record MSAs as consent awards in order to fall within the scope of the enforcement provisions under the New York Convention.²⁰ It is outside the scope of this chapter to examine the specifics of such an approach, but the point to be made is, as a result of MSAs being recorded as consent awards by arbitral tribunals, lines between two very different dispute resolution options have already been blurred.

The result has been the use of a hybrid method of international commercial mediation that attempts to preserve many of the strengths of mediation while rectifying the weaknesses in relation to cross-border enforcement. This hybrid method has resulted in a number of variations, for example, arbitration followed by mediation (arb-med), mediation followed by arbitration (med-arb) and arbitration followed by mediation followed by arbitration (arb-med-arb). While the hybrid method has been used to increase the prospects of enforcing MSAs, the provisions that allow for consent awards in international commercial arbitration were originally designed to encourage parties to an arbitration to settle before a final award was made.²¹ Therefore, what happens if you look at the hybrid method from the perspective of international commercial arbitration? Can the strengths of mediation be incorporated into international arbitration to encourage parties to settle early?

IV.Don’t tinker with something that’s not broken

In an endeavour to pre-empt the howls from the international commercial arbitration purist that will argue not to tinker with a framework that has proven extremely successful, this author notes that there is discontent with international commercial arbitration that it has become too slow, too expensive and overly legalistic.²² However, this author is not suggesting that the use of international commercial arbitration is in some danger of collapsing but rather, making a suggestion that practitioners could seize the moment and use it as an opportunity to take stock of the framework’s success and explore ways that could make international commercial arbitration even more effective. One way could be to incorporate mediation into the arbitration process to provide an opportunity for parties to settle their dispute early. This author accepts that not all disputes are suitable for mediation.²³ However, if one accepts the value in having an opportunity to settle early through the use of mediation, the question then becomes: can a hybrid process be achieved that preserves the respective strengths and integrity of the two dispute resolution options it seeks to combine?

V.Can you have the best of both worlds?

The answer largely depends on which variation of the hybrid method is adopted. In the context of this discussion, the choice has already been made — it would be some form of an arb-med or an arb-med-arb method, as the focus is on incorporating mediation into an arbitration process and not the other way around. Under an arb-med method, arbitration is conducted as per usual but the tribunal does not disclose the award to the parties. Instead, the arbitrator commences meditation to help the parties come to their own resolution, but if no agreement is reached during the mediation, then the dispute is settled on the terms of the award.²⁴ However, the downside of adopting this method is the additional cost and time that results.²⁵ Parties are required to undertake a full arbitration, including preparing submissions and participating in a hearing, before entering into mediation. Hence, an arb-med method offers little in the way of providing an opportunity for parties to settle their dispute early. This is why arb-med-arb, if done right, can offer a superior hybrid method. Despite appearing to be a more drawn-out process due to the three phases, “it can be streamlined to combine the advantages of med-arb and arb-med and limit some of the pitfalls.”²⁶

While from a purely process perspective arb-med-arb has advantages over arb-med, parties adopting an arb-med-arb method into their arbitration framework are not out of the woods yet. A summary of the literature suggests the most pressing concern for any of the hybrid procedures adopted is the requirement that the arbitrator–mediator maintain impartiality throughout the process.²⁷ Hence, a distinction can be made between those variations that use the same neutral as both arbitrator and mediator, and those that use different neutrals.

A.Problems with having the same neutral

Opinion is divided on whether the benefit of having the same neutral outweighs the risks. Those who support the practise note that it can offer the advantages of both mediation and arbitration and “enable the parties to control the process to resolve their disputes more expeditiously, efficiently and at a lesser cost”.²⁸ Those who do not support the practise point to the potential ethical issue of bias on the part of the third party neutral as reasons enough to call for the practice to be “burned at the stake”.²⁹ Perhaps burning at the stake is a bit extreme, but nonetheless, it is the potential for bias that is of the greatest concern when using the same neutral. The risk of bias impacts arbitration and mediation differently.

(1)Affecting arbitration

The problem of bias on the arbitration elements is the increased risk that the enforceability of the award may be challenged. The difficulty arises because the hybrid method can place the role of mediator and arbitrator at odds with each other.³⁰ One of the best characteristics of mediation is the ability for the mediator to engage with the parties on a confidential basis to help them move beyond entrenched positions. As such, the best tool for a mediator to achieve this is often through the use of private sessions (or caucuses). It is in these private sessions that a mediator can ascertain what a party is thinking, uncover the parties’ “bottom lines”, and reality test parties’ entrenched positions.³¹

However, when an arbitrator–mediator engages in private sessions with each party, two dangers are present. One, in reality testing a party’s position, that party might read bias against them into the comments made by the arbitrator–mediator.³² The consequence of which could be the disqualification of the arbitrator–mediator because the party perceives him or her to be biased.³³ Under the Model Law an arbitrator can be challenged if there are justifiable doubts to his impartiality.³⁴ The second danger is, during the private session a party may disclose to the arbitrator–mediator information not known to the other party that could be ma...

Table of contents

• Cover
• Halftitle
• Title
• Copyright
• Contents
• Foreword for the Series
• About the Editors
• Editors’ Note
• About the CIIM Essay Competition
• Part 1 Mediation Landscape
• Part 2 Mediation and Social Justice
• Part 3 Mediation Skills
• End Notes