The Advantages of Mediation and the Special Challenges to Its Utilization in Investor State Disputes

Abstract

Mediation has become increasingly accepted as a useful dispute resolution mechanism. It has had great success in the United States and the United Kingdom and, in recognition of its value, the European Union adopted the Mediation Directive in 2008 to encourage the use of mediation procedures. With today’s global economy and the tremendous growth of cross border commerce, mediation is coming to the fore as it has long been a part of the societal culture in many nations. Moreover, the recent economic downturn, which has caused all parties to look for cost saving measures, is increasingly leading to greater utilization of mediation. The very success of mediation as a dispute resolution tool is itself creating its own momentum and leading to significant growth in the use of mediation in the resolution of private commercial disputes. The success of mediation has led to consideration of whether the application of mediation techniques should be encouraged and developed in the context of investor state disputes. This article reviews the many advantages mediation offers over direct negotiation and adjudication in arbitration or court, how those advantages apply to investor state disputes and the special challenges that investor state disputes present to the success of a mediation.