New ICC Mediation Rules (the new Rules) came into force on 1 January 2014, making mediation the default form of alternative dispute resolution (ADR) for the ICC. The new Rules are the successor to the ICC Amicable Dispute Resolution Rules, which had been in force since 1 July 2001.
Although there is no universally accepted definition of ADR, it is used in this article to describe dispute resolution methods, other than court proceedings and arbitration, most of which are characterised by being non-adjudicative. Mediation in particular is a voluntary, flexible and confidential dispute resolution procedure in which a neutral third party (the mediator) facilitates a structured negotiation between the parties with a view to achieving a settlement. A mediator has no authority to make an award in favour of either party (any settlement will only be binding when the parties agree its terms) and this is one of the key ways in which mediation differs from litigation and arbitration.
The introduction of the new Rules could be seen as a narrowing of the ICC’s ADR focus, given that the old rules were not confined to mediation, but also encompassed other forms of ADR, such as conciliation and neutral evaluation (both of which involve the parties inviting a third party to give a non-binding view on the case). However, these forms of ADR are still available under the new Rules, albeit that the ICC’s emphasis is now upon mediation as the default ADR tool. In fact, this emphasis simply reflects what has already been happening in practice: approximately 90% of ICC ADR procedures held under the old rules took the form of mediation. The introduction of the new Rules constitutes explicit recognition by the ICC of the predominance of mediation as an ADR method.
The new Rules are not prescriptive in terms of the detail of how mediations should be conducted. They deliberately provide flexibility, leaving procedural matters for determination by the mediator in each case, in accordance with the ADR needs of the particular parties. The mediator is required to discuss with the parties how the mediation will be conducted and to set this out in written form. The new Rules provide that the parties are free to withdraw from the procedure if they do not agree with the approach that the mediator proposes. In this way, the parties’ control of the mediation process is reinforced.
Although the new Rules do not impose a set mediation procedure, they nonetheless envisage a hands-on role in the process for the ICC International Centre for ADR. Unless the parties have agreed otherwise, the Centre will be responsible for selecting a mediator, who is likely to come from the network of suitably qualified individuals developed by the Centre through its mediations to date (the Centre does not have an official panel of mediators). The Centre will also have a role in helping the parties reach agreement as to how the mediation will take place, by helping them decide upon practical matters such as venue and timing. The intention is to keep such matters outside the scope of the mediator’s role, leaving him or her to focus impartially on the core task at hand. The rules also provide for the Centre to have a role in persuading a party to engage with a mediation in circumstances where one party has proposed it, but there is no pre-existing agreement to mediate.
The new Rules are supplemented by Mediation Guidance Notes, which discuss certain commonly encountered features of mediation such as the interplay between private and joint sessions and the use of case summaries, as well as providing guidance on matters such as effective preparation, the need for attendance by a person with settlement authority and, at a more fundamental level, the differences between mediation and arbitration.
Importantly, the new Rules have been drafted to work in conjunction with the existing ICC Arbitration Rules, thereby providing for a joined-up dispute resolution system. In fact, the Mediation Guidance Notes actively encourage arbitrators to consider the use of “mediation windows”, whereby proceedings are paused or stayed in order to allow time for a mediation to take place. Traditionally, arbitration panels and parties alike have been somewhat slow to make use of mediation but the use of such designated windows may help to change this.
The parties to a mediation are likely to want to keep both their participation and the details of their negotiations confidential - and confidentiality may help to make a settlement more likely, giving the parties freedom to negotiate in the knowledge that what is said will not reach a wider audience. Confidentiality was provided for under the old rules but interestingly, the new Rules alter its extent. Whereas previously it was the case that all ADR proceedings conducted under ICC rules were confidential, including their outcome, the new Rules, whilst still providing for proceedings to be private and confidential, explicitly exclude from the scope of this confidentiality the fact that such proceedings are taking place, have taken place or will take place.
The new Rules are accompanied by a set of standard mediation clauses, which parties can incorporate into their contracts to provide for ICC mediation in the event of a dispute. The clauses provide a range of alternative options, from an option to use the new Rules to an obligation to mediate in parallel with arbitration proceedings. Of course, it is equally open to parties to include a bespoke clause providing for ICC mediation in such other terms as they see fit or to adopt ICC mediation on an ad hoc basis, with no prior contractual agreement.
Whilst it is unlikely that the new Rules will be considered especially ground-breaking or controversial, they nonetheless represent a welcome effort on the part of the ICC to update its ADR procedures, putting mediation at the forefront, in line with current practice. It is also encouraging to see mediation being promoted as part of a dispute resolution toolkit alongside arbitration, as these methods have too often been employed on a mutually exclusive basis, with the result that opportunities for efficient settlement may have been missed.