An international convention on the enforcement of mediated settlements – UNCITRAL moves one step closer

The UNCITRAL working group that has for several years now been considering the potential for an international enforcement regime for international mediation has now completed its work and produced draft instruments.

At its most recent meeting in New York, the UNCITRAL Working Group II (Dispute Settlement – formerly Arbitration and Conciliation) approved a draft convention and a draft amended Model Law on international settlement agreements resulting from mediation.

The aim of the initiative is to implement an international regime for the enforcement of mediated settlements broadly akin to the New York Convention regime for the enforcement of arbitral awards – and thereby increase the attraction of mediation for international litigants, with all its well-known cost efficiencies and other potential benefits.

The development stems from a view amongst some commentators 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 – which in an international context can involve potentially difficult (and usually lengthy) processes to obtain a court judgment and then enforce it in a foreign jurisdiction. Of course, it is by no means a universal view that this is in fact a problem. As noted in an opinion piece on our ADR Hub, ‘Is the enforceability of mediated settlements holding back the future of dispute resolution?‘ (commenting on the early data gathered from the 2016/17 Global Pound Conference series participants), anecdotal evidence from regular users of mediation is that non-compliance with mediated settlements is in practice a quite rare occurrence (compared to court judgments or arbitral awards).

Both draft instruments will be considered for finalisation by the Commission at its upcoming session in New York this summer (from 25 June). However, there remains a wide range of views on the topic and there may be much more discussion before any position is finalised in the Commission and any process of ratification and domestic implementation begins.

The texts of the draft instruments finalised by the Working Group in February 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 November 2017) together with other details of the initiative.

For further information, please contact Anita Phillips, Professional Support Consultant, or your usual Herbert Smith Freehills contact.