With the Singapore Convention on Mediation now open for signature, ICSID senior legal counsel Frauke Nitschke details how ICSID is working to support parties in the mediation of their investment disputes.*
The past decade has seen increasing interest in mediation as a means to resolve international investment disputes. This is seen in the inclusion of mediation in the dispute settlement provisions of a growing number of investment treaties. It is also reflected in the new multilateral framework for the recognition and enforcement of mediated settlements—the Singapore Convention on Mediation—which opened for signature in August 2019.
ICSID, which administers the vast majority of international investment disputes, has carefully considered how best to support investors and States who wish to avail themselves of mediation as a dispute settlement option. Three primary pillars have emerged.
First is providing facilities and administrative services, similar to those that ICSID is well-known for in the areas of arbitration and conciliation. These services include identifying qualified mediators, facilitating communication between the parties and the mediator, handling the organisation of mediation sessions, and managing the finances of the process. ICSID is also in the unique position to offer state-of-the-art conference facilities at the World Bank Group's offices around the world.
Second is building the capacity of prospective investor-state mediators, counsel and government officials. There are a number of experts that are specialised in investment mediation. However, there is a much larger pool of those who are professional mediators but who have not applied their skills to international investment disputes. And then there are those who are expert in investor-state dispute settlement—most often in the form of arbitration—but who are less familiar with the specific techniques and approaches of a successful mediation. ICSID's mediation courses bridge these respective knowledge gaps.
Third is the creation of the first-ever institutional rules for investor-state mediation. Developed as part of a broader amendment to ICSID's rules of procedure, the new mediation rules are a complement to the Centre's rules for arbitration, conciliation, and fact-finding (each of which is also going undergoing extensive revisions). Overall, the goal is for ICSID to provide parties with a range of effective dispute settlement options which may be used on their own, or in combination with each other.
The initial draft of the mediation rules was unveiled in ICSID's first working paper on the rule amendments in August 2018. The rules have since been refined thanks to input from States and arbitration and mediation practitioners. A third iteration of the mediation rules will be published in mid-August, as part of ICSID's latest working paper.
The mediation rules are designed to adapt to the needs of the parties and the circumstances of the dispute. This flexibility extends to the timing of a mediation. In some cases, a mediation procedure is required by a multilateral treaty prior to the institution of an arbitration. However, mediation may also be conducted in parallel with an ICSID arbitration, provided that the parties agree in writing. In practice, any arbitration is likely to be suspended by party agreement while the mediation is ongoing.
If the parties reach an amicable settlement through mediation during an arbitration under the ICSID Convention, the settlement may be embodied in an award pursuant to ICSID arbitration rule 43(2). The settlement agreement would then benefit from the simplified enforcement mechanism that is unique to the ICSID Convention. The mediation rules also align with the Singapore Convention on Mediation, so that a settlement agreement reached through the mediation process meets the Singapore Convention's requirements for enforceability.
Once finalised and approved by ICSID Member States, the mediation rules will add a valuable dispute settlement option to states and investors—one that complements the many other initiatives that States and practitioners are taking to nurture the development of investor-State mediation.
*This article was originally published in Global Arbitration Review.