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Connections Between Courts, Arbitration, Mediation and Settlement: Transnational Observations

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The Three Paths of Justice

Part of the book series: Ius Gentium: Comparative Perspectives on Law and Justice ((IUSGENT,volume 10))

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Abstract

This chapter draws upon a scholarly census of arbitration experts’ opinions made for a world congress in 2011. The first part of this chapter concerns judicial assistance in the appointment of arbitrators, provision of protective relief (see also Chap. 7), supporting the gathering of evidence for use in the arbitral process, and the annulment or enforcement of arbitration awards. The second part of this chapter is devoted to connections between arbitration and the processes of mediation and settlement. An interesting development is the consensual appointment of an arbitrator who is simultaneously clothed to procure settlement by acting as a mediator (‘Med-Arb’). Some commentators consider that it is confusing and undesirable for the arbitration tribunal itself to engage in mediation. However, others report flexible arrangements permitting an arbitrator to conduct mediation, failing which, the arbitration will continue: but this requires clear party consent, and other appropriate safeguards.

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Notes

  1. 1.

    Published now as Neil Andrews, ‘The Modern Civil Process in England: Links between Private and Public Forms of Dispute Resolution,’ Zeitschrift für Zivilprozess International 14 (2009): 3–32 also translated as ‘La “Doppia Elica” della Giustizia Civile: I Legami tra Metodi Privati e Pubblici di Risoluzione delle Controversie’ in Rivista Trimetrale di Diritto e Procedura Civile (2010) 529–48 (I am grateful to Elisabetta Silvestri, Pavia, for this excellent translation).

  2. 2.

    The ‘Double Helix’ structure of DNA was discovered by Francis Crick and James Dewey Watson (Nobel Prize 1962); the latter is an Honorary Fellow of Clare College, Cambridge, where the author is a Fellow; and there is a sculpture of the Double Helix within the College’s grounds.

  3. 3.

    Allianz SpA etc v. West Tankers (C-185/07) [2009] 1 AC 1138; [2009] 1 All ER (Comm) 435; [2009] 1 Lloyd’s Rep 413; [2009] 1 CLC 96; [2009] ILPr 20; The Times, 13 February, 2009.

  4. 4.

    The position arising from the West Tankers case is currently under review by the European Commission: Green Paper on the Review of Council Regulation (EC) No 44/2001 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters, Brussels, 21 April 2009, COM (2009) application of the Brussels Regulation) of how to remedy this apparent lacuna between what the ECJ has held and what is seen as practical necessity by the arbitration and legal community of the EU. Following a consultation process which is currently ongoing, the EU is expected to put forth a legislative solution that may provide an exception for arbitration from the Brussels Regulation. How this will actually work remains to be seen.

  5. 5.

    The author is a general reporter on the topic of arbitration: International Association of Procedural Law, XV World Congress on Procedural Law (Heidelberg, July 2011).

  6. 6.

    Pereira and Talamini (Brazil): noting Art’s 7, 13(2), 16(2), Arbitration Act (Brazil).

  7. 7.

    Lupoi and Arrigoni (Italy): noting Art’s 810, 814, 815, of the Italian arbitration legislation.

  8. 8.

    Zucconi (Brazil): ‘The choice is generally left to the parties, but it is possible to ask for judicial support when: the parties have provided for an even number of arbitrators; the parties have not established or have not agreed upon the appointment procedures; or a party does not appoint her arbitrator in an established time-limit. Judicial support is also established when it is necessary to replace an arbitrator, only if the parties, or the third appointing party, have not provided; or if the arbitral agreement does not rule the case.’

  9. 9.

    N Pengelley (Canada): (citing case law).

  10. 10.

    [2001] UKHL 65; [2002] 1 WLR 107.

  11. 11.

    Allianz SpA etc v. West Tankers, ‘The Front Comor’ (C-185/07) [2009] 1 AC 1138; [2009] 1 All ER (Comm) 435; [2009] 1 Lloyd’s Rep 413; [2009] 1 CLC 96; [2009] ILPr 20; The Times, 13 February, 2009; noted E Peel (2009) 125 Law Quarterly Review 365; H. Seriki, ‘Declaratory Relief and Arbitration: The Aftermath of The Front Comor,‘ JBL 7 (2010): 541–55; H. Seriki, ‘Anti-suit Injunctions, Arbitration and the ECJ: An Approach Too Far?’ JBL 7 (2010): 24; Peter Schlosser, ‘Europe—Is It Time to Reconsider the Arbitration Exception from the Brussels Regulation?’ Int ALR (2009): 45; Alexis Mourre and Alexandre Vagenheim, ‘The Arbitration Exclusion in Regulation 44/2001 After West Tankers,’ Int ALR (2009): 75; Philip Clifford and Oliver Browne, ‘Lost at Sea or a Storm in a Tea Cup? Anti-suit Injunctions After West Tankers,’ Int ALR (2009): 19; Andrew Pullen, ‘The Future of International Arbitration in Europe: West Tankers and the EU Green Paper,’ Int ALR (2009): 56.

  12. 12.

    Luca Passanante (Italy): ‘A party bound by an arbitration agreement cannot commence a Court proceeding to enforce the rights deferred to arbitrators. If the party does so, notwithstanding the arbitration clause, the defendant must raise the issue (exceptio compromissi) in the first pleading; if the defendant does not do that, the Court’s jurisdiction cannot be challenged anymore. If the issue is raised promptly, the judge will investigate the validity of the arbitration agreement, and, if he thinks that the agreement is valid, will decline his jurisdiction and will normally order the losing party to pay the costs to the other party. This is the only sanction for the party that starts an illegitimate court proceeding brought in violation of an agreement to conduct only an arbitration process. According to the Italian law, the fact that the same suit is pending before a public Court does not deprive the arbitrators of jurisdiction, either on the basis of an arbitration clause already existent or on the basis of an arbitration agreement entered into by the parties after the birth of the dispute.’

  13. 13.

    The position arising from the West Tankers case is currently under review by the European Commission: The EU Commission’s Proposal for a Regulation of the European Parliament and of the Council on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters Brussels 14/12/2010 COM (2010) 748 Final 2010/0383 (COD).

  14. 14.

    Allianz SpA etc v. West Tankers, ‘The Front Comor’ (C-185/07) [2009] 1 AC 1138; [2009] 1 All ER (Comm) 435; [2009] 1 Lloyd’s Rep 413; [2009] 1 CLC 96; [2009] ILPr 20; The Times, 13 February, 2009; noted E Peel (2009) 125 Law Quarterly Review 365; H. Seriki, Declaratory Relief and Arbitration: The Aftermath of “The Front Comor”—; H. Seriki, ‘Anti-suit Injunctions, Arbitration and the ECJ: An Approach Too Far?’; Peter Schlosser, ‘Europe—Is it Time to Reconsider the Arbitration Exception from the Brussels Regulation?’; Alexis Mourre and Alexandre Vagenheim, ‘The Arbitration Exclusion in Regulation 44/2001 After West Tankers’; Philip Clifford and Oliver Browne, ‘Lost at Sea or a Storm in a Tea Cup? Anti-suit Injunctions after West Tankers’; Andrew Pullen, ‘The Future of International Arbitration in Europe: West Tankers and the EU Green Paper’.

  15. 15.

    Calavros and Babiniotis (Greece): ‘Anti-suit injunctions violate the fundamental constitutional right of access to justice. The defendant in a complaint brought in clear violation of an arbitration agreement must raise the relevant defence before the state court which in turn will refer the dispute to arbitration.’

  16. 16.

    Khodykin (Russia): ‘Russian law does not impose any specific sanctions for commencement of court proceedings in apparent breach of an arbitration agreement.’

  17. 17.

    Koller (Austria): ‘The Austrian Supreme Court has not yet decided whether Austrian courts may issue anti-suit injunctions in support of arbitration.’

  18. 18.

    International commercial arbitration, A. Redfern, ‘Interim Measures,’ in The Leading Arbitrators’ Guide to International Arbitration, eds. L.W. Newman and R.D. Hill (Bern: Juris, 2004), at 217 ff and F. Knoepfler, ‘Les Mésures Provisoires et l’Arbitrage’ in Médiation et Arbitrage: Alternative Dispute Resolution-Alternative a la justice ou justice alternative? Perspectives comparatives, eds. L. Cadiet, E. Jeuland, and T. Clay (Litec, Paris: Lexis Nexis, 2005); for the position in international commercial arbitration, A. Redfern, ‘Interim Measures,’ in L.W. Newman and R.D. Hill, eds., op. cit., 217–43; H. van Houtte, ‘Ten Reasons Against a Proposal for Ex Parte Interim Measures of Protection in Arbitration,’ Arbitration International 20 (2004): 85; A. Baykitch and J. Truong, ‘Innovations in Internaitonal Commercial Arbitration: Interim Measures a Way Forward or Back to the Future,’ The Arbitrator and Mediator 25 (2005): 95; and on the same context, M. Mustill and S. Boyd, Commercial Arbitration: Companion Volume (London: Butterworths, 2001), 314–6, 323–4, considering, respectively, ss 39, 44, Arbitration Act 1996 (England and Wales); see also on those provisions the Departmental Advisory Committee (on the Arbitration legislation), on clauses 39, 44 (the report is reproduced in M. Mustill and S. Boyd, op. cit.); the arbitral tribunal has power under s 39, 1996 Act, but only if the parties consent, to make a ‘provisional’ decision on the substance of the case, for example for an interim payment; the High Court has power under s 44, 1996 Act, to award (ex parte) freezing relief or a search order in support of pending or contemplated arbitration proceedings, if the matter is ‘urgent’; therefore, the arbitral tribunal itself lacks power to award ex parte freezing relief or search orders.

  19. 19.

    Neil Andrews, ‘Provisional and Protective Measures: Towards an Uniform Provisional Order,’ Uniform L Rev (Rev dr unif) VI (2001): 931; Stephen Goldstein, ‘Revisiting Preliminary Relief in Light of the American Law Institute/UNIDROIT Principles and the New Israeli Rules,’ in Studia in Honorem: Pelayia Yessiou-Faltsi, ed. P. Yessiou-Faltsi (Athens: Sakkoulas Publications, 2007), 273–96; N. Trocker, ‘Provisional Remedies in Transnational Litigation: The Issue of Jurisdiction: A Comparative Outline,’ Int’l Lis (2009): 48–56.

  20. 20.

    American Law Institute/UNIDROIT: Principles of Transnational Civil Procedure (Cambridge University Press, 2006), principle 8; on which Stephen Goldstein, ‘Revisiting Preliminary Relief in Light of the ALI/UNIDROIT Principles and the New Israeli Rules’, 273.

  21. 21.

    Article 818 of the Italian Code of Civil Procedure, as reported by Luca Radicati di Brozolo.

  22. 22.

    E. Havansi, Uusi turvaamistoimilainsäädäntö selityksineen (Helsinki: Lakimiesliiton Kustannus, 1993), 82, 84 and J. Lappalainen, Alioikeusuudistus (1987–1993; 3rd edn, Helsinki: Lakimiesliiton Kustannus, 1994), 279.

  23. 23.

    Havansi, Uusi turvaamistoimilainsäädäntö selityksineen, 156.

  24. 24.

    UNCITRAL Model Law, Article 17(1).

  25. 25.

    Ibid., Article 17(2)(c).

  26. 26.

    Ibid., Article 17 H and Article17 I.

  27. 27.

    Ibid., Article 17 J.

  28. 28.

    Ibid., Chap. IV, section 2, Articles 17 B and 17 C.

  29. 29.

    Ibid., Article 17 C(4).

  30. 30.

    Ibid., Articles C(4), 17 D.

  31. 31.

    Ibid., Articles 17 C(4),17 D.

  32. 32.

    Ibid,., Article 17 D.

  33. 33.

    Ibid., Article 17 C(4).

  34. 34.

    Ibid., Article 17 C(2).

  35. 35.

    Ibid., Article 17 C(5).

  36. 36.

    Neil Andrews, English Civil Procedure (New York: Oxford University Press, 2003), Chap. 17; Zuckerman on Civil Procedure (2nd edn, London, 2006) Chap. 9; I.S. Goldrein, ed., Commercial Litigation: Pre-emptive Remedies (regularly updated, London).

  37. 37.

    Hayakawa and Tamaruya (Japan): ‘Arbitration Law, art 15: It is not incompatible with an arbitration agreement for a party to request, before or during arbitral proceedings, from a court an interim measure of protection and for a court to grant such measure in respect of any civil dispute which is the subject of the arbitration agreement… This essentially follows the Model Law, art 9. The measures include an order for freezing assets, though it takes the form of in rem order attaching specific assets that belong to the respondent. Such court support is available whether the place of arbitration is in or outside the territory of Japan (Arbitration Law, art 3(2)). For example,… Namsung Shipyard Co Ltd v. Barracuda Co Ltd (9 February 1996) 1610 Hanrei-Jihou 106 (District Court for Asahikawa).’

  38. 38.

    [2008] EWHC 532 (Comm); [2008] 2 All ER (Comm) 1034; [2008] 1 Lloyd’s Rep 684; [2008] 1 CLC 542; noted Adam Johnson Civil Justice Quarterly (2008): 433–44. In January 2008, the English court had granted Mobil Cerro Negro (Mobil) a temporary worldwide freezing order covering assets of up to $12 billion against the Venezuelan national oil company, Petroleos de Venezuela SA (PDVSA). This order was in support of an International Chamber of Commerce arbitration between Mobil and PDVSA, the seat being New York, and the parties being Bahamian and Venezuelan. The governing law of the main contract was Venezuelan. PDVSA successfully applied to set aside the freezing order. Walker J found that there was no evidence that the respondent was likely to dissipate its assets. That was sufficient to resolve the matter. But he gave three additional reasons for setting aside the freezing injunction:38 (1) Mobil cannot surmount the… hurdle [in section 44(3) of the Arbitration Act 1996 (England and Wales) and] show that the case is one of ‘urgency’; (2) in the absence of any exceptional feature such as fraud, [Mobil] would have had to demonstrate a link with this jurisdiction in the form of substantial assets of PDV located here but ‘Mobil cannot demonstrate such a link’; (3) in the absence of any exceptional feature such as fraud, and in the absence of substantial assets of PDV located here, the fact that the seat of the arbitration is not here makes it inappropriate to grant an order under section 2(3) of the Arbitration Act 1996 (England and Wales)… .

  39. 39.

    Neil Andrews, The Modern Civil Process (Tübingen, Germany: Mohr & Siebeck, 2008), 4.03 ff.

  40. 40.

    Ibid., at [5].

  41. 41.

    Grupo Mexicano de Desarrolo SA v. Alliance Bond Fund Inc. 527 US 308; 119 S Ct 1961; 144 L Ed 2d 319 (1999) (a bare majority 5–4), followed and considered in, Crédit Agricole Indosuez v. Rossyskiy Kredit Bank 92 NY 2d 541; 729 NE 2d 683, New York Ct of Appeals (2000).

  42. 42.

    USA ex rel Rahman v. Oncology Associates 198 F 3d 489 (4th Cir 1999) (US Ct of Appeals): preliminary injunction granted to freeze assets; injunction justified both on general equitable grounds and under Fed Rules of Civ Proc, r 64 (see Rahman case, at 499); allegation of fraudulent billing by medical entities and doctors; claim for recovery, in equity and unjust enrichment, of $US 12 million; freezing injunction available, if ordinary debt claim inadequate, where claim sounds in equity (all unjust enrichment claims so characterized, para 6), especially for remedies of constructive trust or equitable lien; Decker v. Independence Shares Corp 311 US 282; 61 S Ct 229; 85 L Ed 189 (1940) applied (Rahman case, paras 1 ff, at 436 ff 9); freezing injunction especially justified if—as here—public interest strongly involved (Rahman case, para 3); Grupo Mexicano case distinguished as denying freezing injunction only where claim for debt, LA Collins, (1999) 115 Law Quarterly Review 601–4, has criticized the majority’s reasoning in the Grupo Mexicano case and its discussion of English freezing injunctions as superficial and outmoded; for a sophisticated critique of the Grupo Mexicano case, Stephen B. Burbank, ‘The Bitter with the Sweet: Tradition, History and Limitations on Federal Judicial Power—A Case Study,’ Notre Dame L Rev 75 (2000): 1291–1346 (at 1297–1306, summarizing the facts and judgments). (I am grateful to Linda Silberman, New York University, Law School, for references.)

  43. 43.

    On the legitimacy of state law in this context, see discussion in Rahman case, op. cit., at 499, explaining scope of Fed Rules of Civ Proc, r 64 (in Rahman case, as the second ground of decision, it was held that the Maryland state freezing jurisdiction applied).

  44. 44.

    [1993] AC 334, 345–6, HL (clause 67).

  45. 45.

    Pegram Shopfitters Ltd v. Tally Weijl [2003] EWCA Civ 1750; [2004] 1 WLR 2082, CA, especially at [1] to [10], on accelerated resolution of construction disputes (so-called ‘adjudication’) under Part II, Housing Grants, Construction and Regeneration Act 1996, and the Scheme for Construction Contracts (England and Wales) Regulations 1998 (SI 1998/649); J. Kendall, C. Freedman, and J. Farrell, Expert Determination (4th edn, London: Sweet & Maxwell, 2008); on mediation and experts, L. Blom-Cooper, ed., Experts in Civil Courts (Oxford: Oxford University Press, 2006), Chap. 10.

  46. 46.

    See now the even clearer statutory power to grant a stay in this context under s 9(1)(2), Arbitration Act 1996 (England and Wales), on which Mustill and Boyd, Commercial Arbitration; Companion Volume, 268 ff.

  47. 47.

    [1993] AC 334, 368, HL, per Lord Mustill.

  48. 48.

    Ibid.

  49. 49.

    Ibid.

  50. 50.

    Stürner (Germany):

  51. 51.

    Esplugues (Spain): ‘The attitude maintained by Spanish Courts as regards foreign arbitration awards is very flexible and positive. Recognition is made in application of the New York Convention of 1958 and is granted in most of the cases requested.’

  52. 52.

    [2010] UKSC 46; [2010] 3 WLR 1472.

  53. 53.

    Gouvernement du Pakistan v. Société Dallah Real Estate & Tourism Holding Co, Cour d’appel de Paris, Pôle 1 – Chap. 1, no 09/28533 (17 February 2011) (http://www.practicallaw.com/8-505-0043). On which see both the next note and the comment by White & Case: http://www.whitecase.com/insight-03022011/

  54. 54.

    (Martinus Nijhoff, Leiden, and Boston, 2010).

  55. 55.

    Article V (10(e)).

  56. 56.

    [2010] UKSC 46; [2010] 3 WLR 1472, at [129] and [130].

  57. 57.

    per Lord Collins, in the Dallah case, [2010] UKSC 46; [2010] 3 WLR 1472: ‘In France the leading decisions are Pabalk Ticaret Sirketi v. Norsolor, Cour de cassation, 9 October 1984, 1985 Rev Crit 431; Hilmarton Ltd v. OTV, Cour de cassation, 23 March 1994 (1995) 20 Yb Comm Arb 663, in which a Swiss award was enforced in France even though it had been set aside in Switzerland: ‘… the award rendered in Switzerland is an international award which is not integrated in the legal system of that State, so that it remains in existence even if set aside …’ (at p. 665); République arabe d’Egypte v. Chromalloy Aero Services, Paris Cour d’appel, 14 January 1997 (1997) 22 Yb Comm Arb 691. Thus in Soc PT Putrabali Adyamulia v. Soc Rena Holding, Cour de cassation, 29 June 2007 (2007) 32 Yb Comm Arb 299, an award in an arbitration in England which had been set aside by the English court (see PT Putrabali Adyamulia v. Soc Est Epices [2003] 2 Lloyd’s Rep 700) was enforced in France, on the basis that the award was an international award which did not form part of any national legal order…: see Born, International Commercial Arbitration (2009), 2677–80; E. Gaillard, ‘Enforcement of Awards Set Aside in the Country of Origin,’ ICSID Rev 14 (1999): 16; and Yukos Capital SARL v. OAO Rosneft, 28 April 2009, Case No 200.005.269/01 Amsterdam Gerechtshof.’

  58. 58.

    per Lord Collins, in the Dallah case, ibid.: ‘In the United States the courts have refused to enforce awards which have been set aside in the State in which the award was made, on the basis that the award does not exist to be enforced if it has been lawfully set aside by a competent authority in that State: Baker Marine (Nigeria) Ltd v. Chevron (Nigeria) Ltd, 191 F 3d 194 (2d Cir 1999); TermoRio SA ESP v. Electranta SP, 487 F 3d 928 (DC Cir 2007). But an Egyptian award which had been set aside by the Egyptian court was enforced because the parties had agreed that the award would not be the subject of recourse to the local courts: Chromalloy Aeroservices v. Arab Republic of Egypt, 939 F Supp 907 (DDC 1996). That decision was based both on the discretion in the New York Convention, article V(1) and on the power under article VII(1) (see Karaha Bodas Co v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 335 F 3d 357, 367 (5th Cir 2003)) and whether it was correctly decided was left open in TermoRio SA ESP v. Electranta SP , ante, at p. 937.’

  59. 59.

    Koller (Austria): noting OGH 3 Ob 117/93 and 3 Ob 115/95, YB Comm Arb 1999, 919.

  60. 60.

    D. Joseph, Jurisdiction and Arbitration Agreements and their Enforcement (2nd edn, London: Sweet & Maxwell, 2010), Part III; K. Mackie, D. Miles, W. Marsh, and T. Allen, The ADR Practice Guide (London: Sweet and Maxwell, 2007) Chap. 9; see also Centre for Effective Dispute Resolution at: http://www.cedr.co.uk/library/documents/contract_clauses.pdf; D. Spencer and M. Brogan, Mediation: Law and Practice (Cambridge: Cambridge University Press, 2006), Chap. 12 for Australian material. The School of International Arbitration, Queen Mary, University of London, report (2005), available on-line at: http://www.pwc.com/Extweb/pwcpublications.nsf/docid/0B3FD76A8551573E85257168005122C8.

  61. 61.

    [2002] 2 All ER (Comm) 1041, Colman J.

  62. 62.

    C v. RHL [2005] EWHC 873 (Comm), Colman J.

  63. 63.

    Koller (Austria): ‘s 16(1) of the Austrian Mediation Act (Zivilrechts-Mediations-Gesetz, BGBl I 29/2003) provides that the mediator of a conflict cannot become the decision-making body in that very conflict and vice versa. It is argued in legal literature that s 16(1) is non-mandatory and therefore the parties may derogate from it. Additionally, the arbitrator that previously acted as a mediator would have to disclose any circumstances that give rise to justifiable doubts as to his or her impartiality or independence. In such cases the parties may, however, waive their right to challenge an arbitrator (for a detailed analysis see M. Pitkowitz and M.-T. Richter, ‘May a Neutral Third Person Serve as Arbitrator and Mediator in the Same Dispute?’ German Arbitration Journal (2009): 228; A. Petsche and M. Platte, The Arbitrator as Dispute Settlement Facilitator (Austrian Arbitration Yearbook, 2007), 87). Provided that the parties’ right to due process (including the arbitrator’s impartiality and independence) is guaranteed, Austrian law does not specifically restrict the arbitrator’s right to encourage settlements between the parties.’

  64. 64.

    Cahali, Amaral, Wambier (Brazil): ‘In the Arbitration Act, there is an express recommendation to the arbitrator (or arbitration tribunal) to attempt conciliation. However, the development of mediation (as opposed to the conciliation overseen directly by the arbitrator) is carried out independently, in separate proceedings, and handled by a mediator, not by an arbitrator.’

  65. 65.

    Perri (Brazil): ‘there are certain rules of arbitration institutions expressly establishing that, unless otherwise provided by the parties, the mediator or conciliator acting in the case cannot be appointed as an arbitrator because, during the mediation or conciliation process, one of the parties may allege that such professional tended to be in favour of the other party’s argumentation, thus lacking the impartiality required from arbitrators. Nevertheless, prohibiting a mediator or conciliator from acting as an arbitrator is not a general rule, as many times the mediator or conciliator may indeed be appointed as arbitrator in view of his personal abilities and the trust the parties may place on him.’

  66. 66.

    Viktória Harsági (Hungary): ‘With regard to settlements, a new position has become outlined in professional legal literature, according to which “arbitral tribunals do not necessarily have to urge parties to strike a settlement concerning the dispute by all means. A settlement often carries with it the psychical disadvantage that both parties may feel they had to reduce their claims”. The Rules of Proceedings of the Arbitration Court attached to the Hungarian Chamber of Commerce and Industry provide a detailed regulation of the relationship between conciliation-mediation and arbitration proceedings… If the parties agree on the conciliation-mediation proceedings, the President of the Arbitration Court shall appoint a conciliator-mediator from the arbitrators listed in the roll of arbitrators… At the joint request of the parties, the President of the Arbitration Court shall appoint the conciliator-mediator as sole arbitrator. The sole arbitrator shall render an award containing the agreement reached and signed by the parties. [Rules of Proceedings, Article 52].’

  67. 67.

    Cannon (Australia): noting s 27 D, Commercial Arbitration Act 2010 (NSW).

  68. 68.

    Cannon (Australia).

  69. 69.

    Herbert Smith (London): ‘In our view, in appropriate cases, and provided it is done with the parties’ consent (and with sufficient safeguards in place to minimise the risk of any subsequent challenge to the arbitrators or the Final Award—for example by excluding caucusing from the process), it may be beneficial for the tribunal to facilitate a mediation or settlement process. For example, in one recent case (ICC arbitration with seat in Austria) the tribunal, following the exchange of written submissions, evidence and witness statements, proposed a meeting where they would give preliminary views on the merits of the dispute, and then seek to assist the parties in reaching a settlement. At the meeting, which lasted 2 days, the tribunal spent a number of hours going through their views of the merits of the case (including their views of the documentary evidence) in a fairly forthright manner, before facilitating a mediation process. Whilst this process did not lead to an immediate settlement and the proceedings continued, the reality check it provided to the parties was instrumental in the parties reaching a settlement within a matter of weeks and in advance of the substantive hearings.’

  70. 70.

    Herbert Smith (London): ‘However, although the process worked well in the case described above, in our view it is only in rare cases that an arbitrator acting as mediator will work in such a positive manner. The roles of arbitrator (a finder of fact and decision maker) and mediator (facilitating the parties reaching their own settlement) are fundamentally different, and one individual (or tribunal) fulfilling both roles presents a number of practical problems, such as:

    1. (i)

      as a party you will be quite guarded in what you choose to say to the arbitrator(s) sitting in any mediation process, whereas with a mediator who will not be a finder of fact and decision maker there will be more confidence in telling the whole story in an informal way.

    2. (ii)

      From the arbitrator’s point of view, there is the danger that one party or another will lose confidence if, in the course of the mediation, the arbitrator expresses views one way or the other about the merits.

    In conclusion, we believe the role of a mediating arbitrator is something to be approached with caution; but can be a useful (if risky) technique in some cases.’

  71. 71.

    ‘CEDR Commission on Settlement in International Arbitration’, Final Report, 2009, Appendix 2: http://www.cedr.com/about_us/arbitration_commission/Arbitration_Commission_Doc_Final.pdf.

  72. 72.

    Ibid., Appendix 2, para 4.

  73. 73.

    Ibid., at para 5.

  74. 74.

    Ibid., at para 6.

  75. 75.

    Ibid., at para 7.

  76. 76.

    Kern (Germany): ‘The DIS Arbitration Rules 1998 expressly provide for a more pro-active role of the arbitral tribunal in settling disputes: “Section 32 Settlement: At every stage of the proceedings, the arbitral tribunal should seek to encourage an amicable settlement of the dispute or of individual issues in dispute.” ’

  77. 77.

    Hayakawa and Tamaruya (Japan): ‘An arbitral tribunal may attempt to settle the dispute subject to the arbitral proceeding, but this is allowed only when the parties consent in writing (Arbitration Law, art 38(4)). … Today, certainly in arbitral proceedings involving foreign (non-Japanese) parties, there will be no settlement attempt in the absence of explicit party agreement… Rule 47 of the JCAA Commercial Arbitration Rules authorises the arbitral tribunal to settle the dispute in the arbitral proceedings, but only if all of the parties consent. Rule 8 of the JCAA International Commercial Mediation Rules provides for the possibility of a mediator acting as an arbitrator, but only upon party consent.’

  78. 78.

    Tega (Japan): ‘attempts by arbitral tribunal at settlement may only be made where both parties consent to it (JAL art 38(4)).’

  79. 79.

    Ervo (Finland), citing Risto Ovaska, Välimiesmenettely—kansallinen ja kansainvälinen riidanratkaisukeino (Helsinki: Edita, 2007), 170; Ervo comments: ‘Ovaska uses the word “push” in Finnish and it describes well the existing attitudes: mediation is not seen as arbitrator’s duty.’

  80. 80.

    Esplugues (Spain): ‘Spain lacks a real culture of arbitration and negotiation. So far practice shows that some arbitrators at the beginning of the procedure ask parties to try to settle their dispute, but this does not mean that they actually act as mediators. In fact, in so far the parties want their disputes to be subjected to arbitration and they appoint an arbitrator (or arbitrators) in this regard this would prevent him/them to act as a mediator. This will finally be something for the parties to request the arbitrator to perform on mutual agreement basis and not for the arbitrator to be adopted on his own.’

  81. 81.

    Groen (Netherlands): ‘Arbitrators may ask the parties if they are interested in a session where the parties try, with possible help of the arbitrators, to consider their differences in a more open way. A session whereby each party is invited to comment in a constructive way on the positions taken by the other party. Arbitrators often do suggest in such sessions, or after the hearing, when each of the parties have let off steam, settlement proposals. Such proposals can end up in an arbitral settlement award, signed by the parties and arbitrators.’

  82. 82.

    Zhao (China): ‘In China, mediation is a way of solving the disputes even if in arbitration. The Arbitration Act of PRC prescribes the relations between arbitration and mediation. So, the arbitrators behave like mediators and propose their settlement.

    Article 51: Before giving an award, an arbitration tribunal may first attempt to conciliate. Where the parties apply for conciliation voluntarily, the arbitration tribunal shall conciliate. Where conciliation is unsuccessful, an award shall be made promptly. When a settlement agreement is reached by conciliation, the arbitration tribunal shall prepare the conciliation statement or the award on the basis of the results of the settlement agreement. A conciliation statement shall have the same legal force as that of an award.

    Article 52: A conciliation statement shall set forth the arbitration claims and the results of the agreement between the parties. The conciliation statement shall be signed by the arbitrators, sealed by the arbitration commission, and served on both parties. A conciliation statement shall have legal effect once signed and accepted by the parties. Where the parties fall back on their words before the conciliation statements is signed and accepted by them, an award shall be made by the arbitration tribunal promptly.’

  83. 83.

    Rycroft (South Africa): ‘The Labour Relations Act 66 of 1995 encourages informality and recourse to conciliation even during the arbitration.’

  84. 84.

    Zucconi (Italy): ‘a 2010 law on labour law (l. 183/2010) has established that a special commission can act as a mediator and, subsequently, as an arbitrator on the same issue.’

  85. 85.

    http://www.cedr.com/about_us/arbitration_commission/Arbitration_Commission_Doc_Final.pdf.

  86. 86.

    Ibid., Appendix 4, ‘Table of existing provisions on settlement in arbitration’.

  87. 87.

    CEDR Rules for the Facilitation of Settlement in International Arbitration (‘CEDR Rules’), introduction, para 2.

  88. 88.

    Art 3(2), CEDR Rules.

  89. 89.

    Art 5(1), CEDR Rules: ‘the Arbitral Tribunal may, if it considers it helpful to do so, take one or more of the following steps to facilitate a settlement of part or all of the Parties’ dispute:

    • provide all Parties with the Arbitral Tribunal’s preliminary views on the issues in dispute in the arbitration and what the Arbitral Tribunal considers will be necessary in terms of evidence from each Party in order to prevail on those issues;

    • provide all Parties with preliminary non-binding findings on law or fact on key issues in the arbitration;

    • where requested by the parties in writing, offer suggested terms of settlement as a basis for further negotiation.

    • where requested by the Parties’ in writing, chair one or more settlement meetings attended by representatives of the Parties at which possible terms of settlement may be negotiated.’

  90. 90.

    Art 5(3), CEDR Rules.

  91. 91.

    Art 6, CEDR Rules.

  92. 92.

    Art 3(4), 3(5), CEDR Rules.

  93. 93.

    Art 3(4), CEDR Rules.

  94. 94.

    Art 3(5), CEDR Rules.

  95. 95.

    Art 5(2), CEDR Rules.

  96. 96.

    Art 3(1), CEDR Rules.

  97. 97.

    Art 3(3), CEDR Rules.

  98. 98.

    Art 7, CEDR Rules.

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  1. Clare College, Trinity Lane, CB2 1TL, Cambridge, UK

    Neil Andrews

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Correspondence to Neil Andrews .

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Andrews, N. (2012). Connections Between Courts, Arbitration, Mediation and Settlement: Transnational Observations. In: The Three Paths of Justice. Ius Gentium: Comparative Perspectives on Law and Justice, vol 10. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-2294-1_11

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