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How caucusing and other elements of mediation fit into International Commercial Arbitration


A major issue that has been raised in the context of International Commercial Arbitration (ICA) recent years is that arbitration proceedings have become increasingly costly and time consuming.1

For comparably small disputes the introduetion of so-cailed expedited procedures by several arbitral institutions is regarded as a possible means to make arbitrations more efficient again.2

In the context of larger and more complex arbitrations, efficiency is more likely to be improved by a proactive involvement of the arbitral tribunal trying to facilitate an amicable resolution ofthe dispute.3

Dispute resolution mechanisms that incorporate mediative elements may start as ordinary arbitrations that result in enforceable arbitral awards. Such processes are generally known as Arb-Med proceedings.4 In contrast, parties to a Med-Arb process first try to settle their dispute by mediation and entitle the mediator to subsequently act as arbitrator if no settlement can be reached.5 Given the requirement of a pre-existing litigious clairn, it is questionable whether an agreement reached during the preiiminary mediation stage of a Med-Arb process can be validly converted into an internationally enforceable arbitral award.6 This issue does not arise in the context of Arb-Med where parties first initiate arbitration proceedings. lt is this kind of hybrid procedure the following considerations will therefore focus on.

lt will first be examined whether the integration of caucusing as one of the main features of “classic mediation“ into arbitration proceedings is an appropriate means to encourage parties to settle their dispute. Following these considerations, a short outline is given of other forms of Arb-Med processes that are sometimes used in the context of ICA. lt will be explained why the goals of hybrid processes are overall most likely to be achieved where arbitral tribunals offer a preliminary evaluation of the case. Finally, the questions of how mediation elements seem to be best integrated into arbitration will be addressed in the light of this evaluative approach.

The following considerations are based on the assumption that the disputes are generally suitable to be resolved by settlement.7 The term “mediation“ and expressions related thereto are understood in a broad sense. For the purpose of this essay, “mediation“ is therefore used as synonym for “facilitation“ as weil as “conciliation“. Also, for the sake of ease, reference is generally made to “the arbitrator“ although arbitral tribunals are often composed of several arbitrators (usually three).8

1 Luke Nottage and Richard Garnett (eds), International Arbitration in Australia (201 0) at 150, 222; Loukas A. Mistelis and Julian D.M. Lew (eds), Pervasive Problems in International Arbitration (2006) at [5-2].

2 See for instance the ACICA Expedited Arbitration Rules (2008) or the Expedited Procedure according to Art 42 of the Swiss Rules of International Arbitration (2006).

3 Nottage and Garnett, above n 1 at 223; Mistelis and Lew, above n 1 at [5-43].

4 Nottage and Garnett, above n 1 at 179.

5 Alan L. Limbury, ‘Hybrid Dispute Resolution Processes - Getting the Best while Avoiding the Worst of Both Worlds?‘ (2010) at 5, available on http://www.cedr.com/?Iocation=/library/ articles/201 001 28 274.htm (last accessed on 20 May 2011).

6 Gino Lörcher, Enforceability of Agreed Awards in Foreign Jurisdictions (2001)17(3) Arbitration International 275 at 280.

7 See Gabrielle Kaufmann-Kohler, When Arbitrators Facilitate Settlement: Towards a Transnational Standard - Clayton UtzlUniversity of Sydney International Arbitration Lecture (2009) 2 5(2) Arbitration International 187 at 193-194, 200 where sports disputes, due to third party interests involved, are mentioned as an example of disputes ine)igible for mediation.

8 Nigel Blackaby, Constantine Partasides, Alan Redfern and Martin Hunter, Redfern and Hunter an International Arbitration (5“ ed, 2009) at [4.1 8].

How caucusing and other elements of mediation fit into International Commercial Arbitration


Dr Niklaus J. Zaugg, LL.M.