DR RAM MANOHAR LOHIYA NATIONAL LAW UNIVERSITY

TOPIC - EXAMINATION OF INSTITUTIONAL ARBITRATION-

MEDIATION- ARBITRATION PROTOCOLS

SUBMITTED TO – SUBMITTED BY-

Dr. Prasenjit Kundu Vaishnavi Singh
Assistant Professor Enrollment no-210101162
DR. RMLNLU VII Semester
The Documented Success of the Arb-Med-Arb Procedure

The combination of mediation and arbitration can take many forms and go by
many names. The form addressed here—the incorporation of a mediation
window into the arbitral process and the recording of any negotiated settlement
as an arbitral award—is most commonly referred to by its procedural sequence,
Arb-Med-Arb.

If the parties are successful in resolving the entire dispute during the mediation
window, the arbitration is reconvened simply to enter the negotiated settlement
as a consent award. If the parties are unsuccessful, or successful only in part,
then the arbitration is resumed to resolve remaining issues and to issue an
arbitral decision and award.

How Arbitral Institutions Have Implemented Arb-Med-Arb Procedure

Article 34 of the United Nations Commission on International Trade Law

(“UNCITRAL”) Arbitration Rules provides that in the event of a settlement
reached before the issuance of an arbitral award, “the arbitral tribunal shall
either issue an order for the termination of the arbitral proceedings or, if
requested by both parties and accepted by the tribunal, record the settlement in
the form of an arbitral award on agreed terms.

Arbitral Institutions: Institutional arbitration is typically handled by

organizations like the International Chamber of Commerce (ICC), the London
Court of International Arbitration (LCIA), the American Arbitration Association
(AAA), and the Singapore International Arbitration Centre (SIAC). These
institutions manage and facilitate arbitration proceedings, including appointing
arbitrators, setting schedules, and ensuring that the proceedings are in
compliance with agreed rules.

Arbitration Rules: Each institution has its own set of arbitration rules that
parties must adhere to, such as the ICC Rules of Arbitration, the LCIA
Arbitration Rules, and the SIAC Rules. These rules generally cover procedural
matters like the selection of arbitrators, the conduct of hearings, and the
enforcement of awards.

Enforceability of Awards: One of the most significant advantages of

institutional arbitration is the global enforceability of arbitral awards. Under the
New York Convention (1958), arbitration awards made in one country are
enforceable in any of the 170+ member states of the Convention.

Most prominent on the formalized end of the spectrum is the Singapore

International Arbitration Centre (“SIAC”) and Singapore International
Mediation Centre.

Under the SIAC SIMC AMA Protocol, parties submit disputes to SIAC pursuant
to an Arb-Med-Arb dispute resolution clause, or based on agreement by the
parties to submit their dispute under the Protocol, which can happen before or
during arbitration Under the Protocol, parties agree that any settlement reached
at SIMC falls within the scope of their arbitration agreement.
The party commencing arbitration files a Notice of Arbitration with the
Registrar of SIAC (the SIAC administrator).

Within four working days of the commencement of arbitration (or agreement by

the parties to mediate), the Registrar of SIAC informs SIMC and sends to SIMC
the Notice of Arbitration.

SIAC constitutes the arbitral tribunal, and, after the tribunal receives the
Response to the Notice of Arbitration, it stays arbitration proceedings and
informs the Registrar of SIAC that the case can be submitted for mediation at
SIMC.

Upon SIMC’s receipt of the Notice of Arbitration and the Response, SIMC in-
forms the Registrar of SIAC when mediation commences. The mediator will
generally be a different person (i.e., not one of the arbitrators), independently
appointed by SIMC, unless the parties agree otherwise.

Parties must conclude mediation within eight weeks of commencement,unless

that time is extended through consultation between the Registrar of SIAC and
SIMC.20

At the conclusion of mediation or when the time has expired, SIMC informs the
Registrar of SIAC of the outcome of the mediation. If the dispute has not been
settled, the Registrar of SIAC then notifies the tribunal that the arbitration
proceeding shall resume as of the date of the Registrar’s notification.
If the dispute was successfully settled in mediation, the parties may request the
tribunal to record their settlement as a consent award, which the tribunal may
render.23 Thus, parties can achieve finality whether through the mediation
process or arbitration process.
The International Chamber of Commerce (“ICC”) takes a similar, but softer
approach. The ICC published its 2021 Arbitration Rules as a single document
with its 2014 Mediation Rules “in answer to the growing demand for a holistic
approach to dispute resolution techniques. In that vein, Appendix IV to the ICC
Arbitration Rules, which lists permissible case management techniques, notes
that the tribunal may “encourage the parties to consider settlement of all or part
of the dispute either by negotiation or through any form of amicable dispute
resolution methods.

The Arbitration Rules promulgated by the China International Economic and

Trade Arbitration Commission (“CIETAC”) envision the “Com- bination of
Conciliation41 with Arbitration” in Article 47. These rules address conciliation
by the arbitral tribunal directly, though the parties may also conciliate on their
own or with assistance from CIETAC. The parties may not use any statements
during the conciliation process in the arbitral proceedings. CIETAC also allows
parties to provide a settlement agreement reached prior to the commencement of
arbitration to form the basis of an arbitral award.

The London Court of International Arbitration (“LCIA”) Rules contain the

typical provision mirroring the UNCITRAL rule on consent awards but
otherwise do not address hybrid proceedings.
III. Goals and Issues to Consider When Designing Arb-Med-Arb
Procedures

A. Enforceability and Confidentiality

Combining the arbitration process with the mediation process presents obvious
areas of opportunity and concern.
Mediation affords the parties the ability to retain control over the terms of any
mediated outcome, including its confidentiality. However, unless mediated
settlements become enforceable awards, much of the benefit is lost, as
mediation settlements are enforceable only in the sense that any contract is
enforceable, according to its terms. Generally, the parties agree to arbitrate
in order to benefit from the confidentiality and efficiency of the ADR process,
while ensuring that the arbitral award will be enforceable. The trick to designing
an appropriate Arb-Med-Arb protocol for arbitral institutions is to ensure that
the parties will be able to enjoy the benefits of the ADR process whether or not
the mediation succeeds.

By interweaving mediation with arbitration, the parties can capitalize on

the confidentiality and flexibility of mediation while also enjoying the
finality and international enforceability of arbitration. Arbitration enjoys
widespread enforceability as a result of the 1958 Convention on the
Recognition and Enforcement of Foreign Arbitral Awards, commonly known as
the “New York Convention,” which gives force to arbitral awards in 168
member states, subject to limited challenges.

That said, once in Arb-Med-Arb, parties will not generally have the option of
allowing mediation to fail and returning to the status quo, because walking
away from mediation means walking directly into arbitration. Therefore, if the
parties envision more flexibility or engaging in more relaxed mediation (e.g., to
preserve relationships), then Arb-Med-Arb may be too blunt a tool.

B. Efficiency (Timing, Costs, and Duration)

Combining arbitration and mediation into a streamlined process, such as that

contemplated by the AAA-ICDR rules, can result in both time and cost
efficiencies as compared to separate mediation and arbitration procedures.
An early settlement can also save business relationships degree of these savings
depends in large part on when the mediation win- dow opens (and of course,
whether it settles). Mediators’ experiences reflect parties’ desire to settle as early
as possible. The fact that a size able minority of disputes settle even after
submissions or after disclosure suggest that any protocol should allow for
mediation to take place at any time during the course of an arbitration under
prescribed situations that ensure against unwarranted delay.
Mediation during the pendency of an arbitration may have benefits in terms of
efficiencies gained, even if the mediation is unsuccessful. Parties will have
much more insight into their exposure both in terms of time to a resolution and
expenditure of legal fees. This efficiency is often lost where mediation is
required prior to the commencement of arbitration.

C. Delay
Any arbitration requires administrative effort to enforce timely hearings and
timely awards. Parties may have reasons to delay arbitration hearings, and
arbitrators are not endowed with the same powers as a presiding judge to force
adherence to schedules. This concern requires sensitivity when designing
protocols respecting the timing and duration of the mediation component of an
Arb-Med-Arb procedure. Creating guardrails for the mediation window avoids
indefinite delay, which can be abused. On the other hand, flexibility should be
acknowledged in any protocol, because strict time limits may interfere with a
mediation that is progressing toward settlement.

D. Confidentiality and Neutrality (Identity of Neutral)

Confidentiality and neutrality are two essential elements of any ADR
proceeding. Whether an arbitration may convert to a mediation raises the issue
of whether the same neutral can wear both hats. The cost and time efficiencies
of a single neutral are obvious, and some jurisdictions, like Germany and China,
have historically blended the two roles. That said, there are serious differences
in the two roles for achieving their respective goals. Indeed, a mediator’s
obligation to disclose potential conflicts are materially different than for an
arbitrator .

The manner of conducting a mediation is also different than an arbitration.

Mediations typically involve ex parte submissions and or causes with each
party, or “shuttle diplomacy.” The success of a mediation relies on the
mediator’s assurance that they will treat as confidential all information provided
by a party during the proceeding, unless the disclosing party gives authorization
to share it.

Ex parte communications are integral to the mediation process. These ex parte

caucuses provide an opportunity for parties to inform the mediator what drives
their negotiation position so that the neutral, theoretically with a window into
the soul of each party, can facilitate a compromise more likely to be accepted by
everyone. The ability to speak openly and frankly with the mediator, with the
assurance that the information will remain confidential from the counterparty
and will not otherwise be used against the party in a subsequent proceeding, is
critical to the productivity of these sessions. The mediator’s goal is resolution
above all else. To the extent the mediator expresses any view of the merits of the
parties’ claims, it is a means to settlement and not an end in itself.

Arbitration, by contrast, is solely concerned with objectively evaluating the

parties’ legal claims on their merits. That evaluation must be impartial, without
influence from any subjective interests or motivations, and with each party fully
able to refute any material assertions of fact. To that end, arbitrators are not
permitted to have ex parte communications with the parties, as this would raise
an issue of due process

These two neutral roles act in pursuit of distinct goals facilitated by distinct
processes tailored for those goals.63 Indeed, the process for each runs nearly
counter to the goal of the other. Because these processes are in such tension, it
can be difficult for a single neutral to wear both hats without sacrificing the
efficacy or legitimacy of one or both proceedings. Specifically, a party faced
with a mediator who may become an arbitrator must decide whether or not to
share confidential information that could be useful in achieving resolution but
detrimental in an evaluation on the merits. On the other hand, an award issued
by an arbitrator who was once a mediator may cast a shadow of doubt as to
whether confidential ex parte information played some improper role in the
arbitrator’s decision- making. Of course, parties can agree to various protections
against these issues, such as mediating without ex parte communication,
disclosing any ex parte information prior to resuming arbitration, replacing an
arbitrator who has acted as a mediator, and/or waiving challenges to any
arbitrator for having acted as a mediator, among others, but these solutions
concede much of the benefits of one or both proceedings.
IV. Best Practices for Arbitral Institution Arb-Med-Arb Protocols

There are numerous competing considerations that arbitral institutions are

equipped to handle if the Arb-Med-Arb protocols are properly designed.
The considerations we have identified include:
• The need to ensure enforceability of a consent award.
• The ability to maximize efficiency in administering both procedures.
• The need for flexibility in creating a window for mediation while an
arbitration is pending—in terms of both the timing and duration of the
mediation.
• The differing disclosure obligations for mediators and arbitrators.
• The risk that confidential mediation communications could taint an
arbitrator and render an award unenforceable.

These considerations are best served if two essential provisions are adopted by
the arbitral institution, akin to those promulgated by the SIAC-SIMC AMA
Protocol.
First, the arbitral institution should require that the arbitrators and mediator are
selected from its panel of neutrals, and that the mediator be different than the
arbitrators. Second, the arbitral institution should maintain administrative
responsibility over the Arb-Med-Arb protocol.
With separate neutrals, parties in mediation are not incentivized to withhold
information with one eye toward arbitration, for fear that the information may
be disclosed to the other party or that it might lead to bias in a subsequent
arbitral decision. Having separate mediators and arbitrators also removes a
claim that an award should not be enforced because of taint or bias. Although
there is some cost and time efficiency lost, the benefits of each procedure
working to its full potential and each neutral acting in full accordance with their
distinctive goals are worth the trade-off.

When the arbitral institution is responsible for the administration of both the
arbitration and the mediation, the administrator will be in a position to balance
the need for the arbitration to proceed in a timely and efficient manner and the
need for the mediation to proceed organically so that it has the best chance to
achieve settlement.

Union of India v. McDonnell Douglas Corporation (1993, India)

Case Summary:
The Supreme Court of India addressed the enforceability of a foreign arbitral
award under the New York Convention. The arbitration was conducted under
the ICC rules, and McDonnell Douglas sought to enforce the award in India.
The court upheld the award and enforced it, emphasizing the principle of comity
among nations and the international legal framework of the New York
Convention.

Key Legal Points:

• The case reaffirmed the enforceability of foreign arbitral awards under
Section 48 of the Arbitration and Conciliation Act, 1996.
• It underscored the principle that arbitral awards issued by recognized
institutions such as the ICC are legally binding and enforceable, unless
the party can establish valid grounds for refusal as per Section 48.
Minmetals Development Co. Ltd v. Ferco Steel Ltd (1999, UK)

Case Summary:
In this case, the English House of Lords dealt with a dispute about whether an
arbitration tribunal had jurisdiction over a claim. Ferco Steel contested the
jurisdiction of the arbitral panel set under the London Court of International
Arbitration (LCIA) rules. The court upheld the tribunal's jurisdiction, stressing
that under the Arbitration Act 1996, a tribunal can rule on its own jurisdiction.
Key Legal Points:
• The court reinforced the competence-competence principle under
Section 16 of the Arbitration Act 1996, where an arbitral tribunal can
decide on its own jurisdiction without judicial interference.
• Institutional arbitration rules, such as those of the LCIA, are valid and
should be respected in resolving jurisdictional disputes.

Cigna Insurance Co. v. Amara (2005, USA)

Case Summary:
In this case, the court enforced a settlement agreement reached during mediation
between Cigna and Amara, even though the defendant later sought to back out
of the settlement. The court held that the mediation agreement could be
enforced as a binding contract.
Key Legal Points:
• This case demonstrated that mediation agreements can be enforced as
legally binding if they are clear and specific about the terms of the
settlement.
• The case reinforced the enforceability of mediated agreements once
formalized, even if the mediation process itself is non-binding.
CONCLUSION

The evolving case law demonstrates that institutional arbitration is

particularly well-suited for complex international disputes, offering
enforceable results that are recognized globally. Similarly, mediation, with
its emphasis on voluntary settlement, provides parties with the opportunity to
resolve conflicts amicably, and its resulting agreements, when formalized,
can be just as enforceable as those arrived at through arbitration.
Ultimately, the legal certainty provided by arbitration protocols,
the flexibility of mediation, and the judicial support for ADR principles
create a robust framework for resolving disputes efficiently and effectively.
As global commerce and international relations become increasingly
complex, the continued development and enforcement of institutional
arbitration rules, mediation procedures, and arbitration protocols will be
pivotal in ensuring that these alternative dispute resolution mechanisms
remain viable, trusted, and effective tools for dispute resolution worldwide.