Mediation is a voluntary dispute resolution process, conducted in private between two parties willing to resolve their disputes without going to arbitration or court litigation. A third-party, neutral person called mediator will assist the parties reach their settlement; once a settlement is achieved, the parties will enter into a settlement agreement.
In December 2018, the United Nations General Assembly adopted the United Nations Convention on International Settlement Agreements Resulting from Mediation, also known as the "Singapore Convention". The Singapore Convention effectively allows mediation settlement agreements to be enforced in countries of the convention state parties, quite similar to the enforcement of arbitral awards under the New York Convention 1958.
Contrary to some misconceptions, a mediator does not adjudicate the parties’ dispute but only facilitate their discussion, akin to a guided negotiation process. A mediator is not an arbitrator or judge whereas mediation does not typically involve submission of pleadings, discovery process, oral examination, etc, common in arbitration or litigation. Hence, mediation can presents the parties with a calm and composed atmosphere to negotiate and consider possible settlement of their disputes.
Parties may jointly agree to empower the mediator to be much more proactive in assisting them but the mediator will always need to be wary not to overstep his/her authority, also to be impartial in not siding any of the parties, or to pressure the parties to enter into a settlement agreement.
Advantages of Mediation
Mediation is gaining importance in part due to international arbitration becoming much more complex, costly and lengthy in terms of process. Not all disputes should be ideally referred to arbitration, for instance, if the claim is not substantial or if the claimant’s case is not guaranteed of success if referred to arbitration. As such, parties should consider mediation under such circumstances.
Mediation comes with greater flexibility, for instance, the parties could terminate the mediation should they feel that it is in their best interest to refer the dispute to arbitration. Costs tend to be low too. In the event that the parties achieve a settlement, this can be recorded in the form of a written settlement agreement capable of enforcement under the Singapore Convention.