THE CROSS-BORDER MEDIATION LANDSCAPE 2020 – 2023

With the development of socio-economy, disputes are appearing more and more and therefore, different mechanisms of disputes resolution have been applied, including negotiation, mediation, arbitration, and dispute settlement at court. And mediation, as a dispute resolution mechanism, has been favoured by disputing parties as well as lawyers around the world.

The report of Singapore International Dispute Resolution Academy (SIDRA) presented below will help us take a clearer look at cross-border mediation landscape:

THE CROSS-BORDER MEDIATION LANDSCAPE: 2022 SIDRA SURVEY FINAL REPORT

The Singapore International Dispute Resolution Academy (SIDRA) has published the International Dispute Settlement Survey Report: The report continues SIDRA’s global study into how users of dispute resolution mechanisms, including businesses and their legal representatives, make decisions about resolving cross-border disputes and provides possible future trends.

This post looks at some of the findings related to why Client Users and External Counsel choose to mediate their disputes and compares some of the results of the 2020 and 2022 Final Reports.

Why choose mediation

Importance of factors affecting decision to use mediation and satisfaction with mediation as mechanism according to factor

Most of the respondents resorted to international commercial mediation to resolve their disputes because they were contractually obligated to do so (67%) or because external counsel had advised them to make use of mediation (61%).

Most of the respondents found that mediation is an effective dispute resolution mechanism to enable them to preserve business relationships (94%) and uphold confidentiality (89%). This is unsurprising as the confidential nature of mediation is a draw for parties who seek to preserve their business relationships.

Respondents were satisfied with the following characteristics of mediation: preservation of business relationships (78%), impartiality (78%) and confidentiality (72%). In the 2020 Final Report, respondents were also satisfied with impartiality and confidentiality.

How mediators are chosen

Importance of factors influencing choice of mediator and Satisfaction with choice of mediator

The top factors influencing the respondents’ choice were dispute resolution experience (94%), good ethics (94%), industry/issue-specific knowledge (89%), language (89%) and cultural familiarity (89%). Only 39% of respondents thought that it was important for a mediator to be from a third-party country.

In terms of satisfaction, respondents were satisfied with the language skills (78%) and good ethics (78%) of their chosen mediator. They were also satisfied with the dispute resolution experience of their mediator (72%). This data coincides with the findings found in the 2020 Final Report.

Interestingly, only 56% of respondents were satisfied with the industry/issue-specific knowledge of their mediator. This suggests that most respondents rate the subject-matter expertise of mediators as important. For instance, parties to investment-related, intellectual property or technology disputes may require mediator expertise in these areas. At the same time, it is important to note that there is a strong and ongoing debate in the professional mediation community about whether mediators’ expertise should be process-related rather than subject-matter related.

Technology and Mediation

Technology is useful for cross-border mediation

In the 2022 Final Report, over 78% of the respondents found platforms for conducting virtual/online mediation useful. Meanwhile, in the 2020 Final Report, only 35% of respondents found the same platforms useful.

More technologies are being embraced now, compared to the data presented in the 2020 Final Report. 50% of respondents found negotiation support or automated negotiation tools as useful, up from 29% in the 2020 Final Report. 39% of respondents thought e-discovery/due diligence useful, up from 33%.

These differences are unsurprising given that the use of technology increased exponentially during the pandemic and has also made online proceedings more cost and time efficient.

On the other hand, usefulness of analytics for appointment of mediator and/or counsel has gone down from 36% in the 2020 Final Report to 33% in the 2022 Final Report. This may be explained by the fact that External Counsel experienced in mediation sometimes know mediators personally and think that this may influence the way a mediation is conducted. However, these factors become less relevant when using technology and thus may not be of much use for External Counsel.

Participation of mediation in dispute settlement between investors and the state

According to the 2022 Final Report, dispute resolution by conciliation is second only to arbitration – the most commonly used dispute resolution method for investor-state disputes. The rise of mediation in the context of disputes between investors and the state has been noticed. In particular, the session on The reform plan on investor-state dispute settlement of Working Group III of UNCITRAL emphasized the role of mediation in addition to other dispute settlement methods and how to promote the effectiveness of these measures.

In addition, The new mediation rules of the International Centre for Settlement of Investment Disputes (ICSID) have also come into effect recently. Accordingly, the rule is applied to investment matters of the country or regional economic integration organisation and their respective departments or agencies.

In general, mediation is gaining more and more popularity, not only because this method helps disputes be resolved quickly but also helps maintaining business relationships between parties. In the future, mediation will continue to be an effective method for resolving cross-border disputes over trade and investment.

Mediation with its advantages compared to other dispute resolution mechanisms has gained favour among clients, lawyers and enterprises. And Vietnam International Commercial Mediation Center (VICMC) along with other mediation centers have made considerable contribution to cross-border mediation in general and Vietnam mediation in particular.

(The article is excerpted from “The Cross-Border Mediation Landscape: 2022 SIDRA Survey Final Report” by Angela Abal on the website https://mediationblog.kluwerarbitration.com , translated by the VICMC Secretariat )

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