BIT’s and BAT’s

Rainbow Warrior in Auckland Harbour after bombing by French secret service agents.Gary Born, Chair of the International Arbitration Practice Group at Wilmer Cutler Pickering Hale and Dorr LLP, was in New Zealand this week as part of his appointment as the Inaugural Senior Visiting Research Fellow at Victoria University Law Faculty’s New Zealand Centre for International Economic Law.

His visit marked the 30 year anniversary of the Rainbow Warrior case that shook a nation (those of us old enough to remember will recall the case of two French secret agents who blew up a Greenpeace ship in Auckland harbour). Mr Born acted as counsel for Greenpeace.

In addition, I was lucky enough to catch Gary speaking on his most recent initiative around a Bilateral Arbitration Treaty Regime, that aims to provide a default arbitration mechanism for the resolution of defined international commercial disputes.

The mechanism (fondly known as a BAT) would utilize the UNCITRAL Arbitration Rules, providing a means of resolving commercial disputes when nationals from contracting states had not agreed upon an alternative means of dispute resolution. Awards would be subject to recognition in the contracting states under the New York Convention and, subject to additional arrangements, in all New York Convention contracting states.

And the connection with mediation?

Bilateral Investment Treaty (BIT) investor-state dispute settlement (ISDS) relies heavily on arbitration and traditionally mediation has not figured. But, there is a feeling that this is changing since the International Bar Association published its Rules for Investor State Mediation in late 2012 – much has been written in the past year or so on whether investor state-mediation really is one of the last great unexplored tracts of the mediation landscape.

Gary’s initiative takes this one step further and all power to him – the challenge for those of us in the international mediation community is to find how the mediation process can be included in these regimes to add value to both BITs and BATs.

More to come on this topic … and special thanks to Dr Petra Butler who was instrumental in Gary’s visit to NZ.

Further information;

A draft Model BAT can be seen here. A commentary on the Model BAT’s provisions can be got from here. Further details about the Model BAT and its rationale can be found in an article here

Quiet times for mediation anoraks? Just you wait…

It seems to be all quiet in England and Wales for mediation anoraks, at least for the civil and commercial kind.

Mediators don’t seem to be being dragged to court to give evidence and the Farmassist[1]  issue seems to have gone back to sleep for the time being. Predictably there is no sign of anybody making use of the new rules for cross-border mediation introduced on the back of the EU directive on mediation[2]. (If anybody is aware of a limitation period being extended or settlement agreement being registered as a judgement please do write in. Any news from elsewhere? Scotland?)

There is the usual scattering of decisions rearranging the Halsey[3] furniture in increasingly attractive formations. But it’s still the same three-piece-suite however you look at it. Nothing really to excite the afficionado.

Well, civil and commercial mediators should glance across at the employment law world for what might be a glimpse of the future.

Two seismic events have occurred there in the last two years. First a massive increase in tribunal fees (which provoked an unsuccessful judicial review by Unison, now on appeal). Second a requirement as of May 2014 that all tribunal cases must have been the subject of at least an attempt at conciliation with ACAS. Time limits are suspended while the ACAS process continues. But without an ACAS certificate confirming the attempt has been made the claim simply cannot be filed.

Result: tumbleweed blows through the employment bar as tribunal cases undergo a dramatic decline. It probably also blows through the ranks of the private mediators who specialise in employment cases. But for the government a huge reduction in the financial burden of the tribunal system presumably beckons.

In civil and commercial litigation we have just had the first of these experiences: a massive hike in civil filing fees came into force on 9th March 2015. Mediators (along with everybody else) anxiously wait to see what will happen next. The concern is of course that having been discouraged from litigating parties won’t get around to mediating either. Might they not resort to what Lord Neuburger once remarked was “that much neglected form of dispute resolution: capitulation”?

My local MP recently defended the big increase in court fees on the basis that more people would be encouraged mediate. (As he is also the Prime Minister this is quite an important conversion to the cause.) But as to what will actually happen on the ground, we shall see.

And what are the chances that we will also experience the second seismic change appropriately adjusted to the civil context:  compulsory pre-action conciliation/mediation? Far from negligible I would have thought, though if the government wants to raise revenue through these measures it presumably wants some claims issued.

The Ministry of Justice lies in that zone of unhappiness which surrounds any government department that has not had its budget ring-fenced for the next two years. It shares this small condemned cell with the police, possibly the armed services and very few others. Every option will have to be considered.

So hold on tight. Of course we have no civil equivalent of ACAS. But compulsory mediation information sessions in civil litigation could be coming to your town soon. And will the CMC’s much-expanded accreditation process come just in time to supply the neutrals of confirmed standing who will provide these  services?

Government intervention has had a radical effect on dispute resolution in the employment (and family) worlds in the last two years. Maybe things aren’t going to be so quiet on the civil/commercial front after all.

[1] Farm Assist v DEFRA [2009] EWHC 1102 (TCC) upholding a witness summons issued against a mediator against her objections.

[2] THE EU Mediation Directive came into force on 13th June 2008 requiring national governments to ensure compliance by 20th May 2011.

[3] Halsey v Milton Keynes [2004 1 WLR 3002] Court of Appeal guidance as to when it is appropriate to impose a costs sanction on a party which, though successful, had refused or failed to mediate. See now for example PFG v OMFS [2013] 1 WLR 1386

Clever Thinking Out of Dubai

Dubai, February 2015: DIFC Courts Practice Direction No. 2 of 2015 – parties can now choose to refer their DIFC money judgments for enforcement through the DIFC-LCIA Arbitration Centre, effectively converting their judgement to an arbitral award.

Having done that, the arbitration award should be enforceable in all New York Convention countries thereby avoiding limitations of state court judgments that they are not normally enforceable outside of the home jurisdiction absent the usual and limited reciprocal enforcement mechanisms.

To some extent this mirrors the efforts by some in the mediation community, including the IBA, to find a mechanism to turn a cross border mediated settlement into an arbitral award which would then be enforceable internationally under the New York Convention.

For more, see two short Kluwer articles The Handbrake on Global Mediation and The Race towards a New York Convention for Cross-border Mediated Settlement Agreements: the Fable of the Tortoise and the Hare Revisited?

This lack of any coherent method of enforcement is widely seen as a major impediment to further globalisation of mediation, the argument being how can we expect parties involved in large international commercial disputes to embrace mediation if there is a risk that any outcome might be, to all intents and purposes, unenforceable.

DIFC’s innovative Practice Direction issued in February and subject of much discussion since late 2014, is the first of its kind globally – it offers parties the advantages of both litigation and arbitration since it allows the DIFC-LCIA Arbitration Centre to provide an additional remedy to the judgment creditor if the parties choose to submit any disputes they may have about the payment of money judgments to arbitration under the auspices of the DIFC-LCIA Arbitration Centre. In this way the judgment creditor obtains an arbitral award for their unpaid money judgment that can be enforced in the 150 plus New York Convention countries providing greater enforcement internationally.

As Michael Hwang, Chief Justice of the DIFC Courts, says

 we have developed an important tool to synthesize litigation and arbitration by giving concurrent remedies for enforcement and thereby resolve one of the great problems of international litigation

DIFC Courts Practice Direction No. 2 of 2015 – Referral of Judgment Payment Disputes to Arbitration

DIFC Courts – Chief Justice’s Explanatory Lecture on Referral of Judgment Payment Disputes to Arbitration – November 2014

CJC’s Report Into Online Dispute Resolution Out Today

cjclogo2The Civil Justice Council Online Dispute Resolution Advisory Group’s report is out today. The Group’s remit was to explore the potential for ODR for civil disputes less than £25,000 and recommends an online court to be known as Her Majesty’s Online Court.

Brick Court Mediator and Advisory Group member, Bill Wood QC, was delighted to be a signatory to such a far reaching report.

Chair of the Advisory Group, Professor Richard Susskind, said;

This report is not suggesting improvements to the existing system. It is calling for a radical and fundamental change in the way that our court system deals with low value civil claims. Online Dispute Resolution is not science-fiction. There are examples from around the world that clearly demonstrate its current value and future potential, not least to litigants in person.

Judges would decide cases online, interacting electronically with the parties. Early resolution of cases would be achieved via ‘facilitators’.

Two major benefits are predicted – an increase in access to justice (more affordable and user-friendly service) and substantial savings in cost of the court system.

Full Report

Media Release

The Role of Mediation in the DIFC Courts

Published with the kind permission of the author – Natasha Bakirci, Assistant Registrar – Dubai International Financial Centre Courts

DIFC logoLondon, 5 January, 2015.

The DIFC Courts, Dubai’s commercial and civil common law jurisdiction, were established in 2006 to hear disputes concerning the Dubai International Financial Centre and those doing business in, with or from the Centre. The Courts’ jurisdiction was later extended by Dubai Law No. 16 of 2011, which amended Law No. 12 of 2004 and allowed for external parties to opt-in to the Courts’ jurisdiction in writing either before or after a dispute has arisen[1]. Mediation already plays a role in the Courts’ procedure and it is envisaged that there will be more of a focus on encouraging early settlements of disputes in the future.

The Small Claims Tribunal (SCT)

The Small Claims Tribunal (SCT) of the DIFC Courts, which drew inspiration from the Singaporean model, features a formal session of mediation as part of its procedure. Claims with a maximum value limit of 500,000 AED (UAE Dirhams) can be considered by the SCT if both parties agree, or in the context of employment related matters without a value limit provided both parties agree in writing to the SCT’s jurisdiction [2].

Approximately 90% of applications before the SCT settle at the “consultation” phase which is a mandatory Court–guided mediation session. Only if the parties are unable to reach a settlement will a judge of the DIFC Courts go on to hold a hearing and deliver a Court judgment. SCT proceedings are confidential and parties are not normally legally represented.

Part 27 of the Rules of the DIFC Court (RDC) on Alternative Dispute Resolution 

Mediation is also provided for in Part 27 of the RDC which makes provision for Alternative Dispute Resolution, which was previously referred to by the term “Justice by Reconciliation” (JBR) prior to the amendment of the RDC in April 2014[3].

RDC Part 27.1 emphasises the Courts’ “primary role as a forum for deciding civil and commercial cases” whilst encouraging “parties to consider the use of alternative dispute resolution (such as but not confined to mediation and conciliation) as an alternative means of resolving disputes or particular issues.” RDC Part 27.2 highlights that alternative dispute resolution can significantly help parties to save costs, save parties the delay of litigation, enable parties to achieve settlement of their disputes while preserving their existing commercial relationships and market reputation, provide parties with a wider range of solutions than those offered by litigation and would also contribute to the more efficient use of judicial resources. Part 27 provides for judges to invite parties to consider whether their disputes could be resolved through alternative dispute resolution, either at the Case Management Conference stage or at another juncture if deemed appropriate. Furthermore, legal representatives are exhorted to consider with their clients and the other parties concerned, the possibility of attempting alternative dispute resolution and to ensure that their clients are fully informed as to the most cost effective means of resolving their dispute[4]. Despite ample provision being made in the RDC for alternative dispute resolution, there are few examples of Part 27 being implemented in practice. Specific case examples in which Part 27 of the RDC has been used include, inter alia,  the case of Dr Aziz Kurtha v. Bin Shabib & Associates (BSA) LLP & ORS (CFI 004/2008) Order of 19 January 2009 on Mediation – Justice by Reconciliation, in which Sir Anthony Colman ordered the parties to select a neutral mediator and to “take such serious steps as they may be advised to settle their dispute by JBR”; and a number of Court case management orders including that of H.E. Justice Shamlan Al Sawalehi of 2 June 2014 in the case of BGC Brokers L.P. v. Mourad Abourahim (CFI 027/2013) where the parties were ordered to exchange lists of three neutral individuals who were available to conduct ADR procedures by a certain date, and subsequently to in good faith endeavour to agree a neutral individual from the lists so exchanged and provided.

The Establishment of the Dispute Resolution Authority (“DRA”)

Dubai Law No. 7 of 2014, amending Dubai Law No. 9 of 2004, which was issued on 21 May 2014 established the Dispute Resolution Authority (“DRA”). The DRA will comprise of the following entities: (i) the DIFC Courts; (ii) the Arbitration Institute; and (iii) any other tribunals or ancillary bodies established in accordance with Article 8 (5) (b) of this Law, which empowers the Chief Justice of the DIFC Courts in his new role as Head of the DRA to set up such ancillary tribunals and establishments. There is discussion at the current moment as to whether this might allow for Court-ordered mediation through the eventual establishment of a DIFC Mediation Centre, which would in fact form part of the DIFC Arbitration Institute.

A potential future DIFC Mediation Centre 

Singapore, which the DIFC Courts often looks to as an exemplary common law system has its Singapore Mediation Centre (SMC). The SMC was established in 1997 to promote and facilitate the settlement of disputes through alternative dispute resolution. The SMC is a not-for-profit organisation structured as a company limited by guarantee by the Singapore Academy of Law. The DIFC Courts are currently considering the creation of a separate DIFC Academy, very much akin to the Singaporean model, which would cover all of the DIFC Courts’ activities which are not specifically related to litigation. As the Courts’ caseload increases, it may well be that certain cases which a judge feels would be suitable for an attempt at settlement would be sent for mediation before the Court would consider entertaining an application. This would achieve a number of the purposes set out in RDC 27.2 cited above.Continue Reading