On two bitterly cold days in February 2015, on the island of Manhattan but outside the territory of the City of New York, the United Nations Commission on International Trade Law (UNCITRAL) met in a hearing room at the UN to decide whether the US proposal for a convention on the enforcement of settlements reached in conciliating or mediating cross-border commercial disputes should be further explored. The proposal asks Working Group II (Conciliation and Mediation) to consider a convention analogous to the New York Convention on arbitral awards. The New York Convention is codified in the US in the Federal Arbitration Act. 9 U.S.C. § 201 et seq. That convention, first adopted in June 1958, has now been signed by over 145 countries.

The significance of the proposal can only be understood in the context of the impact that the New York Convention has had in the arbitration world. Because court judgments in foreign jurisdictions do not enjoy ease of enforcement comparable to the expedition of the convention, arbitration has become the preferred mechanism for resolving international disputes. The result has been the creation of an entire international economy involving facilities, arbitral institutions, arbitrators and arbitration practitioners. Countries and cities vie to create the most favourable seats and rules for this business of dispute resolution. New York has participated in this economy, Miami has a centre and there are others around the country. London, Paris, Singapore, and other foreign venues compete for this business.

In most domestic disputes, mediation, conciliation and settlement play a very significant role and provide a less costly alternative to completing the entire process. However, because mediated or conciliated settlements of international disputes have no special status and are treated as contracts subject to contractual defences when enforcement is sought, mediation and conciliation are seen to be seriously underutilised in international disputes. Indeed, the EU has issued a directive, directive 2008/52/EC of the European Parliament and of the Council of 21 May 2008, on certain aspects of mediation in civil and commercial matters, in an effort to increase the use of mediation in cross-border disputes. But the directive leaves the means of enforcement to the member states.

Apr-Jun 2015 issue

Appropriate Dispute Solutions