Irony of Destiny

The progress of mediation seems nearly irresistible.

The old and most rudimental time of attempts to mediate between two nearly irremovable positions is over thanks to the new generation of mediation which has been launched in the United States, at which the Harvard Law School has given a substantial contribution, promptly followed by England.

A new process, focused on stressing the need for an accurate preparation, through analysis and research, and for a positive approach by negotiators has made the old practice of continuing to fight during the negotiation no more acceptable, as well as the related unfriendly approach by the negotiators.

A proper training of mediators has completed these new proceedings.

The irony of destiny is that this process, which has been created having in mind the interest of users, in order to help them to avoid or to narrow any sort of litigation, is given rather little attention by the great majority of its potential users.

However, this lack of interest by private individuals and entities – an attitude which is very slowly improving – is nothing – so to say – compared to the negative attitude to mediation of the largest majority of States and public entities.

In addition to the above referred, the general lack of interest for mediation, they face an obstacle which seems irresistible.

Their public officials are in fact frequently exposed to the risk that – if they agree to settle – their decision be criticized internally and externally, what may inter alia affect their career.

The understandable reaction to this is a firm unwillingness to negotiate and consequently even to accept mediation proceedings.

The result of such various ingredients is that it is not rare that the State or public entity involved suffers damage from this, since it elects to litigate and accepts the risk of a judgment or award even materially more onerous than the settlement which would have been available.

The IBA Investor State Mediation Rules

A relevant step towards trying to open the door to mediation by States was made by the International Bar Association’s Mediation Committee, which in 2012 had its Rules for Investor-State Mediation approved by the Council of that association, which made them become IBA Rules.

However, the mediation circles were well aware that, as to international disputes, mediation was lacking the decisive tool which has been provided to arbitration by the New York Convention, which allowed an award made in one of its Member States to be enforced, through quick recognition and enforcement proceedings, in any other Member State.

A New York Convention for Mediation

The intention to see that even mediation could benefit of a tool similar to the New York Convention’s one for arbitration has been expressed by several sources, such as the US State Department and the IBA Mediation Committee.

The United Nations accepted to put this topic on the agenda of Uncitral.

After long discussions, the project was approved and it was agreed that it had the format of a Convention.

The United Nations Convention on International Settlement Agreements Resulting from Mediation – also known as the Singapore Convention on Mediation – has been eventually launched and it is reported that on 7 August 2019 it had been signed by 46 States, including the United States and China.

The New Convention is a great improvement of the efficacy of mediation of disputes which have an international background.

Is this sufficient ?

It would be legitimate to wonder whether the combination between the IBA Rules and the Singapore Convention has solved the problems which did not allow mediation to serve fully its purpose.

It is suggested that, as far as States and public entitles are conceived, this is not yet sufficient.

If the obstacle to be moved is then the legitimate fear of public officials to be attacked in spite of their bona fide decision to settle, the remedy seems to lie in a solution to this specific problem.

It is wondered whether this remedy may consist in working out a decision mechanism which provides that the decision first to negotiate and then to settle be made by a Committee. This Committee might, as to the States, consist of Officers of the various competent departments, such as the Ministry of Justice, the Public Prosecution, the Treasury and the Ministry which has the closest connection with the object of the dispute

As to a public entity the Committee might consist of its Chief Executive Officer, of the Chief Finance Manager and of the Director of the departments which have a connection with the dispute.

A decision by a large majority of such Committee, such as 80% of its members, should on the one hand ensure that it has been well considered and on the other hand, thanks to this collegiality, it should sufficiently protect the decision makers.

In this way, States and public entities should be able to save even substantial amounts by avoiding litigation, which sometimes may be doomed from the start.