Current Issues in International Commercial Mediation: Short Note on the Nature of Agreement Resulting from Mediation in the Light of the Singapore Convention

Abstract

This paper deals with the present debate in the context of the current mediation scene within the scope of international commerce. Recently we have witnessed a number of initiatives aimed at improving and increasing the use of mediation. Various prominent organizations, traditionally providing the background for international arbitration adopted mediation rules reflecting the growing demand for mediation services. In EU, the Directive on certain aspects of mediation in civil and commercial matters was adopted and various subsequent steps to increase the use of cross-border mediation were taken. International commercial disputes often tend to be high-value cases with a considerable level of complexity and therefore more time and cost consuming compared with domestic commercial disputes. Despite the fact that arbitration remains indisputably the most preferred mean of international commercial dispute resolution, it also faces a strong criticism. It´s said that international commercial arbitration became too costly, slow and too formalized. Parties to the complex commercial disputes therefore look for new dispute resolution mechanisms that would be easier, faster and less expensive. It would seem that nothing prevents mediation from taking the place of the most popular method of resolving international commercial disputes and therefore becoming a successor of arbitration. However, serious doubts exist whether mediation can serve as an adequate substitute for arbitration, in particular within the scope of international commerce. One of the most common complaints is that mediation lacks the international legislative framework, such as international arbitration may benefit from. This view is based on the claim, that parties to the cross-border commercial conflicts would find mediation more appealing if the settlements resulting from mediation were subject to legal regime providing for direct enforceability. This paper further discusses this issue with particular focus on the nature of agreement resulting from mediation in the light of the proposal of the new international legal instrument prepared by UNCITRAL Working Group II, i.e. the Singapore Convention. It is argued that by granting the settlement agreements, that fall within the scope of this new legal instrument, a specific legal status, behavioral pattern of the parties involved in the international commercial disputes may change dramatically.