Earlier this month, the IBA unanimously approved and adopted rules drafted by a subcommittee of the IBA’s mediation group. The rules are designed for the mediation of investment–related differences or disputes involving states and state entities, whether or not they arise out of a contract between the parties. Mediation under the rules may take place at any time, regardless of whether court, arbitration or other dispute resolution proceedings have been initiated. It is hoped that the rules will bridge the gap at the domestic legal level, where mediation of investor-state disputes is not often promoted.
The rules were prepared against the background of a significant increase in investor-state disputes arising from international investment agreements. Traditionally an area for international arbitration, in recent years, stakeholders have been exploring alternative methods available under relevant treaties and agreements. Whilst many investor-state agreements currently allow parties to settle their disputes through negotiation, conciliation or mediation, evidence suggests that this is not often deployed with success. The IBA subcommittee found that there was a lack of awareness and understanding of mediation among investors, state representatives and legal practitioners.
The IBA’s rules have been drafted specifically to facilitate mediation in the investor-state arena. Whilst containing many standard clauses seen in other institutional mediation rules (for example the process for appointment of a mediator, conduct of the mediation, confidentiality, and fees), the rules also provide for co-mediators. This is regarded as important to address party concerns over trust and egality of the process, as well as maximising available mediator skills at the mediation. The rules also require the disclosure of any personal interest or potential conflict in a “statement of independence and availability”, a template for which is attached to the rules.
The working group comprised members of the IBA mediation and arbitration committees, present and former officials of country governments, members of the secretariats of the ICC, ICSID, the PCA and the SCC, academics, and in-house counsel for major investors.