A Survey of Professionals on Mediation of International Commercial Disputes

IMG_0236
International commercial activity

By Donald L. Swanson

On December 20, 2018, the United Nations General Assembly adopted a United Nations Convention on International Settlement Agreements Resulting from Mediation, and 52 countries have signed that Convention.  It deals with enforcing mediated settlements of international commercial disputes.

A Survey

Leading up to adopting the Convention, studies were made to determine the need for it. One of those studies occurred in 2016. It surveyed 221 professionals with experience in dispute resolution, from North America, Europe, Asia, Latin America, Middle East, Oceania and elsewhere. [Fn. 1]

Survey Q & A

Here are questions and answers from the survey.

  1. Question: Over the past three years, how many international commercial mediations has the respondent been involved in as a party, counsel, or neutral? Answer: 63% had been involved in one, two or three; 14% in four to nine; and 9% in twenty or more.
  2. Question: How are international commercial mediations most likely to arise, in the respondent’s experience? Answer: The primary way is by contract—either through a standalone mediation clause or as part of a tiered dispute resolution clause—followed by a suggestion from counsel. The least likely methods, by far, are judicial mandates and a suggestion by a party.
  3. Question: Why, in participant’s experience, do parties use mediation in international commercial disputes? Answer: Primarily, to save time and money. Other reasons include a more satisfactory process, a cultural disinclination toward litigation or arbitration, and a desire to preserve an ongoing relationship.
  4. Question: Why would parties avoid mediation of international commercial disputes? Answer: Lack of experience with mediation by parties or counsel; concerns over revealing litigation or arbitration strategies; concerns about finding an effective mediator; and a cultural preference for litigation or arbitration.
  5. Question: How can parties be encouraged to use mediation in international commercial disputes? Answer: Provide more evidence on the effectiveness of mediation in reaching settlements, better information on how mediation works, and better information about mediation costs.
  6. Question: What types of international commercial disputes are amenable to mediation? Answer: 74% identified disputes involving an ongoing relationship, while lesser-identified reasons include disputes with parties in cultures that encourage mediation and disputes between only two parties.

No Surprises

There is nothing surprising about any of those answers—except for the one about mediation resulting from a contract provision requiring it [that’s beyond what I’ve experienced thus far]. Everything else is exactly what we’ve experienced here in the U.S., as for example what we’ve seen in bankruptcy mediation developing over time.

–UN Convention

Nor is there anything surprising about the fact that, two years later, the United Nations adopted its Convention on International Settlement Agreements Resulting from Mediation. Neither is it surprising that dozens of countries promptly signed-on to the Convention.

–Mediation Meets a Need

That’s because mediation meets a genuine need: the need is for a dispute resolution process that’s inexpensive and saves time, while providing control by the parties over their own dispute resolution destiny.

Conclusion

Congratulations to the United Nations, and all countries involved, on adopting and signing-up for the United Nations Convention on International Settlement Agreements Resulting from Mediation.  And thanks to Prof. Strong for her report.

——————————–

Footnote 1. For a report on the study, see Realizing Rationality: An Empirical Assessment of International Commercial Mediation, 73 Wash. & Lee L. Rev. 1973,  1980 & 1985 (2016). Its author, S.I. Strong, is admitted to practice as an attorney in New York, Illinois, and Missouri and as a solicitor in England and Wales, is the Manley O. Hudson Professor of Law at the University of Missouri and Senior Fellow at the Center for the Study of Dispute Resolution. All information above is from Prof. Strong’s article, unless otherwise noted.

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