UN mediation convention

At its 51st session on 26 June, the UN Commission on International Trade Law (UNCITRAL) approved the final drafts for a new convention on the enforcement of mediation settlement agreements and corresponding model law. It introduces, for the first time, an international enforcement regime that will facilitate the enforcement of mediation settlement agreements. The model law amends the 2002 Model Law on International Commercial Conciliation and replicates the enforcement articles of the convention, as well as changing the terminology from ‘conciliator’ and ‘conciliation’ to ‘mediator’ and ‘mediation’.

This article provides an overview of the draft convention’s key provisions. ‘Enforcing state’ refers to the country in which an application for enforcement of the settlement agreement is being made; ‘resisting party’ refers to the party to the settlement agreement who is opposing enforcement.

Convention aims

The fundamental aim is to establish an international regime for the enforcement of settlement agreements which result from a successful mediation (settlement agreements) and which is broadly similar to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the New York Convention). Thus, it is hoped that an international enforcement regime for settlement agreements will enhance mediation in the resolution of international trade disputes and, consequently, improve cross-border trade.

Scope (article 1)

The convention applies to ‘international agreements resulting from mediation’ and concluded ‘in writing’ by parties to resolve a ‘commercial dispute’. It excludes settlement agreements which: (a) have been approved by a court or have been concluded in the course of court proceedings; (b) are enforceable as a judgment in the state of that court; or (c) that have been recorded and are enforceable as an arbitral award. The convention will focus on circumstances where other international instruments, such as the New York Convention, do not apply. Further, the convention does not apply to settlement agreements which relate to personal, family, household, inheritance or employment law matters.

Enforcement procedure (articles 2 and 4)

By using the word ‘shall’, article 2 makes clear that the enforcing state is obliged to enforce a settlement agreement in accordance with its rules of procedure and under the conditions set out in article 4. A party wishing to apply to enforce a settlement agreement must produce: (a) the signed settlement agreement; and (b) evidence that the settlement resulted from mediation. The article goes on to provide examples of evidence that the settlement resulted from mediation which include the mediator’s signature on the settlement agreement; document signed by the mediator confirming the mediation was carried out; or an attestation by the institution administering the mediation. The article also has a ‘catch-all’ provision which provides the enforcing state with discretion to determine other evidence it may consider appropriate to prove that the settlement agreement resulted from mediation.

Exceptions (article 5)

As with the New York Convention, article 5 sets out five exhaustive grounds which may justify refusing enforcement of the settlement agreement. A resisting party must provide the enforcing court with appropriate evidence to demonstrate that one of the following exceptions apply:

(a) A party to the settlement agreement was under some incapacity;

(b) The settlement agreement is null and void, inoperative or incapable of being performed under the applicable law;

(c) The settlement agreement: is not binding, or is not final, according to its terms; has been subsequently modified; the obligations in the settlement agreement (i) have been performed or (ii) are not clear or comprehensible; granting relief would be contrary to the terms of the settlement agreement.

(d) There was a serious breach by the mediator of mediator standards; and

(e) There was a failure by the mediator to disclose to the parties circumstances that raise justifiable doubts about the mediator’s impartiality or independence.

Article 5(2) provides two further exceptions to enforcement. Article 5(2)(a) states that enforcement may be refused where it would be ‘contrary to the public policy’ of the enforcing state. This provision provides the enforcing state with discretion to determine whether a settlement agreement offends its public policy. For example, a settlement agreement which concerns monetary interest is unlikely to be enforced in countries where sharia law is a source of law and which prohibits interest. The second ground under article 5(2)(b) provides the enforcing state with the discretion to refuse enforcement where the ‘subject matter of the dispute is not capable of settlement by mediation under the law of that state’.

Parallel applications or claims (article 6)

Article 6 deals with situations where the parties to the settlement agreement have each begun proceedings in different jurisdictions in respect of that settlement agreement. Article 6 states that where an application or a claim relating to the settlement agreement has been made to a court (or any competent authority including an arbitral tribunal), the court at the enforcing state may adjourn the decision on enforcement and may order the other party to give suitable security.

The convention and model law are major developments in the field of ADR on the international level. They further enhance the role of international mediation in the resolution of cross-border commercial disputes. These developments also reflect the growing trend that international commercial parties are increasingly using more collaborative forms of dispute resolution.

Masood Ahmed is associate professor at the University of Leicester and a member of the Civil Procedure Rule Committee (@ahmedCivJustice)