August 4, 2023
The UN Commission on International Trade Law (UNCITRAL) is deliberating executing reforms regarding rules on Investor-State Dispute Settlement (ISDS). The outcome of this 56th Session, currently underway in Vienna, serves as an important development for the global dispute resolution mechanisms.
As part of these sessions, there are further reforms to be implemented with regard to the UNCITRAL Model Provisions on Mediation. Though termed in a general sense,these guidelines would ultimately contribute to investment mediation, offering parties useful advice on how to use mediation and describe procedures that should be taken into account in this process. Prima facie, they aim to promote the use of mediation in the settlement of such conflicts, and represent a culmination of the Working Group’s initiative over the years.
In brief, UNCITRAL gave Working Group III a broad mandate to investigate the potential reform of investor-State dispute settlement (ISDS) at its fifty-fifth session in 2017. The Commission applauded the Working Group for considering further forms of ADR, such as mediation as a reform component, at its fifty-fourth session in 2021. The United Nations General Assembly (UNGA) Resolution No. A/CN.9/1075 formulated details on the ‘Draft UNCITRAL Notes on Mediation’. Further to this, UNCITRAL Resolution No. A/76/17 (fifty-fourth session) contains the affirmation towards the ‘UNCITRAL Mediation Rules’, which govern every part of the mediation process, including commencement, termination, pre-conditions, the appointment and function of mediators, and guidelines for conduct and regulation.
Subsequently in 2022, the UNGA made recommendations to assist mediation centres and other interested bodies with regard to mediation under the UNCITRAL Mediation Rules of 2021, as per Resolution A/CN.9/1118. The Commission expressed satisfaction with the Working Group's development in its fifty-fifth session in 2022 and encouraged the Working Group to provide papers on alternative dispute resolution procedures for the Commission's consideration. Further reforms on ISDS were recommended in 2023, as documented by UNGA Resolution No. A/CN.9/WG.III/WP.226, and adjustments to the revised provisions as per the fifty-fifth session are being deliberated under this current session as documented in UNGA Resolution No. A/CN.9/1150. These provisions include:
(1) Availability and commencement of mediation
(2) Information required in an invitation
(3) Relationship with arbitration and other proceedings to resolve the dispute
(4) Use of information in other proceedings
(5) Settlement agreement
In terms of changes, the bodies are keeping in mind that mediation was still being underutilised to resolve investment disputes. Thus, the Working Group has attempted to encourage parties to conduct mediation where appropriate without creating an obligation per se. In view of the existing mediation rules, as previously highlighted, the 56th Session so far has focused on reflecting existing treaty language, as seen in the Singapore Convention on Mediation, the ICSID Mediation Rules 2022, and the IBA Rules for Investor-State Mediation 2012. This would ultimately allow the parties to choose from and refer to existing mediation rules for the conduct of mediation, seemingly encouraging more participation in this process.
The finalisation of these texts would be a worthwhile development, given that over time, UNCITRAL Model Law in general has become well known and influential on a global scale. They are now a well recognised framework for international business dispute resolution since it has been used as the basis for or an effect on legislation in many nations. While the efforts began with international commercial arbitration, the expansion of this work is pertinent. This pro-dispute-resolution lens brings consistency and predictability to the framework for international dispute resolution, where such Model Law strives to harmonise these principles across various jurisdictions. Overall, State Parties to the negotiations would be able to resolve cross-border conflicts with ease by adopting the Model Law and synchronising their local legislation into compliance with international norms.
These sessions mark an important milestone for UNCITRAL, as the Working Group is in its third phase of work to develop relevant solutions for the Commission. It further contributes to UNCITRAL’s overall mission is to gradually modernise and harmonise trade-related legal provisions, as well as lessen legal barriers to global trade. Though UNCITRAL engages in a variety of other tasks, such as internet commerce, insolvency,international payments, etc, their role in technical assistance aids Member States to evaluate their legal reform requirements and draft the legislation necessary to ultimately effectuate them.