Business Day - Business Law and Tax Review - - BUSINESS LAW & TAX REVIEW -

Con­ven­tion) is the key in­stru­ment in fa­cil­i­tat­ing cross-bor­der ar­bi­tral awards. The New York Con­ven­tion has more than 145 sig­na­tory coun­tries and im­poses an in­ter­na­tional obli­ga­tion on state courts of sig­na­tory coun­tries to re­fer par­ties to ar­bi­tra­tion in lieu of state court pro­ceed­ings and to grant recog­ni­tion of awards aris­ing out of such agree­ments. How­ever, there is no com­pa­ra­ble cross-bor­der in­stru­ment gov­ern­ing me­di­a­tion pro­ceed­ings or their out­comes.

In the fu­ture, how­ever, me­di­a­tion is bound to fea­ture more fre­quently be­cause of the reg­u­la­tory re­quire­ments in the UK and Euro­pean Union (EU). The English Civil pro­ce­dure rules of 1999 in­tro­duced the con­cept of “ac­tive case man­age­ment” which is de­fined as en­cour­ag­ing par­ties to use an al­ter­na­tive dis­pute res­o­lu­tion pro­ce­dure. The power of the court goes as far as to order ad­verse costs de­spite a lit­i­gant be­ing suc­cess­ful at trial, be­cause they had un­rea­son­ably re­fused to fol­low the court’s sug­ges­tion to me­di­ate the dis­pute.

This ap­proach was demon­strated in the case of Dun­net v Rail­track.

Court-man­dated me­di­a­tion is also a part of other com­mon law ju­ris­dic­tions in­clud­ing Aus­tralia and Sin­ga­pore. The EU has also is­sued di­rec­tives in terms of cross-bor­der me­di­a­tion and consumer me­di­a­tion, which com­pels each mem­ber state to deal with me­di­a­tion in na­tional leg­is­la­tion.

Pic­ture: iS­TOCK

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