International Mediation
The Comparative Law Yearbook of International BusinessSpecial Issue, 2020
PUBLISHED UNDER THE AUSPICESOF THE CENTER FOR INTERNATIONAL LEGAL STUDIES

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Christian Campbell
Assistant Director
Center for International Legal Studies
Salzburg, Austria

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Table of Contents
How the Brain’s Neural Encoding Function
Contributes to Communication and Conflict Dynamics
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Neural Encoding Function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Some Key Characteristics of Neural Function . . . . . . . . . . . . . . . . . . . . . 9
Implications for the Resolution of Conflicts . . . . . . . . . . . . . . . . . . . . . . 22
What Does This Mean for Mediation Practice? . . . . . . . . . . . . . . . . . . . 28
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
The United Nations Convention on International Settlement
Agreements Resulting from Mediation: Its Genesis, Negotiation
and Future
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
UNCITRAL’s Previous Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Genesis: The Need for a Rational Enforcement Means
After a Mediated Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
The Deliberations of Working Group II:
From a Rocky Start to Final Adoption . . . . . . . . . . . . . . . . . . . . . . . . . 45
Issues and Prospects for the Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Enforcement of Mediated Settlement Agreements
under the Singapore Convention and the UNCITRAL
Model Law: An Argument for the Opt-In Model
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Article 5(1)(b)(ii), (c)(ii) and (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Article 5(1)(b)(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Article 5(1)(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Spectrum of Sophistication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Opt-Out Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Opt-In Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

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Enforcement of MediatedSettlement Agreements under
the Singapore Convention andthe UNCITRAL Model Law:
An Argument for the Opt-In Model
Koji Takahashi1
Doshisha University Law School
Kyoto, Japan___________
Introduction
The Singapore Convention (United Nations Convention on International
Settlement Agreements Resulting from Mediation, hereafter referred toas “the Convention”) was adopted in 2018.2 In the same year, the
UNCITRAL Model Law on International Commercial Conciliation(2002) (hereafter referred to as “the Model Law 2002”) was amended withthe addition of a new section on international settlement agreements andtheir enforcement (Section 3). With the amendment, it was renamed as
The UNCITRAL Model Law on International Commercial Mediation andInternational Settlement Agreements Resulting from Mediation (2018)(hereafter referred to as “the Model Law”). A bulk of the Convention’s
provisions found their way into the new section of the Model Law. This
article will refer mostly to the Convention but the analysis will equally
apply to the Model Law except otherwise noted.
The Convention is applicable to international commercial mediations(Article 1(1)). Its primary aim is to facilitate the enforcement of settlementagreements resulting from mediation (hereafter “MSAs” or “mediatedsettlement agreements”). The Convention obliges the contracting States
to enforce MSAs under the conditions it lays down (Article 3(1)). Subject
to certain grounds for the refusal to grant enforcement (Article 5), theConvention treats MSAs as directly enforceable like the judgments ofdomestic courts or arbitral awards subject to the New York Convention__________________________________________________________
Koji Takahashi is a Professor at the Doshisha University Law School (Kyoto, Japan)
and an Adjunct Professor at the Michigan State University (USA). He has previously
taught as a full-time faculty member at the University of Birmingham and the
University of Southampton (Institute of Maritime Law).
2 At the official signing ceremony on 7 August 2019, the Convention received
signatures from 46 States. How many States will actually ratify it remains to be seen.

164Comparative Law Yearbook of International Businesson the Recognition and Enforcement of Foreign Arbitral Awards (1958)(hereafter “the New York Convention”).
Outside the regime of the Convention, an MSA may only be relied on
as a contract and accordingly may only be adduced as evidence. It is but
one piece of evidence to help the plaintiff establish its claim. If theplaintiff obtains a favorable judgment, the latter will then be directly
enforceable.
The Convention allows the parties to an MSA to opt out of its regime
by so indicating in their MSA. This follows from Article 5(1)(d), which
provides that the enforcement of an MSA may be refused if the enforcement is contrary to its terms. Unless the parties opt out, the Convention isapplicable to all MSAs resulting from international commercial mediations. The Convention, however, permits the contracting States to elect toenter the reservation under Article 8(1)(b) in favor of the opt-in model bydeclaring that they will apply the Convention only to the extent that theparties to an MSA have agreed to its application. An MSA may only be
enforced in the States that have made the reservation if the parties to the
MSA have agreed to opt into the Convention’s regime.
Unlike an international convention, the Model Law is only a model fordomestic legislation. When the States implement it by domestic legislation, they may modify it as they like, although the recommended practicewould be to avoid making extensive modifications. The Model Law
expressly contemplates certain modifications, including a modificationin favor of the opt-in model. Thus, its footnote 6 says that a State may
consider enacting Section 3 to apply only where the parties to the MSA
agreed to its application.
This article argues that the States ratifying the Convention3 or
implementing the Model Law should adopt the opt-in model.4 We will__________________________________________________________The Convention scarcely offers any economic incentives for ratification. Since it
facilitates the enforcement of MSAs in the contracting States, the assets situated insuch States become exposed to seizure for execution. In any State, the companies andindividuals of that State tend to own more assets there than do foreign companies andnationals. From this perspective, the Convention works to the detriment of the interestof the contracting States. The same might be said of the New York Convention, but
the latter’s option to require reciprocity, which a large number of contracting States
have adopted by way of declaration under Article I(3), offers an alternative incentive.
The Singapore Convention has no such built-in incentives. It relies on the States’ good
will to promote international mediation.
4 For the opposite view, see, e.g., O’Neill, “The new Singapore Convention: will it be
the New York Convention for mediation?” (2018) (http://disputeresolutionblog.
practicallaw.com/the-new-singapore-convention-will-it-be-the-new-york-conventionfor-mediation/); Schnabel, “The Singapore Convention on Mediation: A Framework for
the Cross-Border Recognition and Enforcement of Mediated Settlements” (2019) 19(1)3Koji Takahashi

65

start with an examination of some of the grounds for non-enforcement
laid down in Article 5(1)(b)(i) and (ii), (c)(ii), (d) and (e) to reveal thedifficulties and problems which may arise from their application. We willthen note that there is a spectrum of sophistication for internationalcommercial mediations and will consider how the Convention would lookfrom the opposite ends of the spectrum.
Building on the preceding analysis, we will proceed to consider how
the opt-out option will actually work and evaluate the opt-in model.
Finding that the opt-out option does not adequately protect the interest ofparties in some situations and that the opt-in model would operate well inall situations, we will conclude that the opt-in model should be adopted.

___________________________
Article 5(1)(b)(ii), (c)(ii) and (d)Under the Convention, the court before which the enforcement of an
MSA is sought may refuse to grant the relief if the MSA is not binding
according to its terms (Article 5(1)(b)(ii)) or the obligations in the MSA
are not clear (Article 5(1)(c)(ii)) or granting relief would be contrary to
the terms of the MSA (Article 5(1)(d)). Given that mediation is a processof self-determination, these provisions are of central importance. As will
be examined below, they may not, however, be interpreted broadly
enough to carve out all the MSAs that the party resisting enforcement did
not expect or assume to be treated as directly enforceable.
Expectation or Assumption of the Parties
The direct enforcement under the Convention is a special treatment thatwould not result naturally from the fact that an MSA is a contract. Given
that mediation is a process of self-determination, an MSA should be
subject to the Convention only where both parties to it have an expectation
or assumption that it should be given the special treatment.
It is not impossible for an MSA to state that it should be treated as
directly enforceable. But in a vast majority of cases, an MSA will containno statement as to whether it should be so treated. What is the intentionof the parties then?
Unless being aided by competent lawyers, the parties engaged in amediation may not have a good grasp of the difference between the direct__________________________________________________________(footnote 4 continued from previous page)
Pepperdine Dispute Resolution Law Journal 1, at p. 58. Mr. Schnabel proposed andnegotiated this Convention on behalf of the United States but wrote this article in his
personal capacity to express his personal view.

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Comparative Law Yearbook of International Businessenforcement under the Convention and the effect of an MSA as a contract.
Such parties may not have an expectation or assumption that their MSA
should be treated as directly enforceable. Even where the parties are wellinformed, the examples below will demonstrate that the parties in manycases would not have such an expectation or assumption.
Many MSAs contain non-monetary obligations. While it is not impossible to directly enforce such obligations by way of specific performance,
it may not be consistent with the parties’ expectation or assumption
because the monetary relief of damages is often more practicable thanspecific performance.5
The terms of MSAs resulting from commercial mediations are usually
not as simple as saying that X shall pay Y a certain sum of money by acertain date. They are often complex and contain many conditional undertakings. As with any contract, the more complicated an MSA is, the harder
it is to be directly enforced since more room is left for interpretations orcontingencies. The parties to such an MSA may not have an expectation
or assumption that it should be treated as directly enforceable.
The parties engaged in a mediation sometimes decide to cast aside
their respective legal arguments and construct a future-oriented arrangement in furtherance of their wider interests. What they undertake to do isessentially the negotiation of a new contract of which an agreement toterminate the dispute forms part, possibly a small part. The parties to theresulting MSA may have no expectation or assumption that it should
receive any different treatment from an ordinary contract.
Where the parties intend to design a framework for long-term relationships, they may use vague or nuanced languages in their MSA. Such an
MSA may contain, for example, an agreement to agree, an undertaking to
make best efforts, or an obligation to be performed in a reasonable manneror to the satisfaction of the other party. The parties using such languages
may have no expectation or assumption that the MSA should be treatedas directly enforceable. Rather, they may conclude an MSA in the spirit“any agreement is better than no agreement” as even such an MSA may
turn out to work well.
Interpretation and Application
Where enforcement is sought of an MSA that the party resisting enforcement did not expect or assume to be treated as directly enforceable, thatparty may rely on sub-paragraphs (b)(ii), (c)(ii), or (d) of Article 5(1).
__________________________________________________________
5

In this connection, it is interesting to note that the primary remedy for breach ofcontract is the award of damages rather than the relief of specific performance in thelegal systems of the common law tradition.

Koji Takahashi

67

There is, however, a great deal of uncertainty over how the courts willinterpret these grounds for non-enforcement. Take, for example, an MSA
containing an agreement to agree, an undertaking to make best efforts,
or an undertaking conditioned on a certain contingency. It is not certain
whether such an MSA will be deemed to be binding under Article
5(1)(b)(ii). Nor is it certain whether obligations to be performed in areasonable manner or to the satisfaction of the other party will be deemed
to be clear under Article 5(1)(c)(ii).
The uncertainty over interpretation may work to the disadvantageof the party resisting enforcement because the Convention puts theburden of proof on that party.6 Even if that party manages to discharge
the burden of proof, the Convention allows the courts to enforce the MSA
by discretion.7
The plight of the party resisting enforcement deepens if a narrow
reading is given to these provisions. It has been suggested that the“according to its terms” restriction under Article 5(1)(b)(ii) should beread as meaning that a court may only look at what is explicitly statedwithin the four corners of the MSA;8 that Article 5(1)(c)(ii) should beconsidered to apply only in what will be a fairly unlikely situation where
the MSA is so confusing or ill-defined that the court could notconfidently enforce it;9 and that Article 5(1)(d) should be considered toapply only to the situations where enforcing an MSA would be directlyinconsistent with its terms.10
If the courts take such a narrow reading, many of the MSAs that the
party resisting enforcement did not expect or assume to be treated as
directly enforceable may end up being so treated by the courts under theConvention.

__________________________________________________________
See the introduction of Article 5(1).
As indicated by the permissive word “may” in the introduction of Article 5(1). See
also Schnabel, “The Singapore Convention on Mediation: A Framework for the CrossBorder Recognition and Enforcement of Mediated Settlements” (2019) 19(1)Pepperdine Dispute Resolution Law Journal 1, at p. 42.
8 Schnabel, “The Singapore Convention on Mediation: A Framework for the CrossBorder Recognition and Enforcement of Mediated Settlements” (2019) 19(1)Pepperdine Dispute Resolution Law Journal 1, at p. 45.
9 Schnabel, “The Singapore Convention on Mediation: A Framework for the CrossBorder Recognition and Enforcement of Mediated Settlements” (2019) 19(1)Pepperdine Dispute Resolution Law Journal 1, at p. 48.
10 Schnabel, “The Singapore Convention on Mediation: A Framework for the CrossBorder Recognition and Enforcement of Mediated Settlements” (2019) 19(1)Pepperdine Dispute Resolution Law Journal 1, at p. 48.
6
7

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Comparative Law Yearbook of International Business______________
Article 5(1)(b)(i)Under the Convention, the court before which the enforcement of an
MSA is sought may refuse to grant the relief if the MSA is null and void
(Article 5(1)(b)(i)). As with any contract, an MSA may be null and void
if the parties’ consent to it is vitiated with mistake, misrepresentation,
fraud, duress, coercion, undue influence, unconscionability, or the like.
As will be examined below, there is a great deal of uncertainty over
how the courts will interpret this provision. A further problem with thisprovision is that it may undermine the confidentiality of mediation, as it
would induce the party resisting enforcement to seek and obtain a court
order compelling the mediator to testify as a witness.
Uncertainty over Interpretation
The interpretation of Article 5(1)(b)(i) involves uncertainty over (1) what
law is applicable to determine the validity of an MSA and (2) how theapplicable law will be interpreted.
The uncertainty may work to the disadvantage of the party resisting
enforcement since the burden of proof lies with that party. It may also
work to the detriment of the party seeking enforcement since it may
generate ancillary disputes and make the process of enforcement morelengthy and costly.
Law Applicable to an MSA
The validity of an MSA, like any contract, must be determined byreference to the law applicable to it. The Convention provides that theapplicable law is the law to which the parties have subjected the MSA(Article 5(1)(b)(i)). Thus, if an MSA contains a choice-of-law clause, itwill be given effect. To this extent, the law applicable to an MSA is certain.
Where the parties have made no indication of the law to which they
have subjected their MSA, its validity is to be determined by “the law
deemed applicable” by the court before which enforcement is sought(Article 5(1)(b)(i)). The court will apply its own choice-of-law rules todetermine what law is applicable. As an MSA is a contract, the court
will apply the choice-of-law rules for contract regardless of whether theunderlying dispute is contractual. There may, however, be uncertainty
over how a given set of choice-of-law rules will be applied.
To begin with, since MSAs are not a major type of contract, it isunlikely that there exists a choice-of-law rule specifically tailored forKoji Takahashi

69

them. The Rome I Regulation,11 for example, lists specific choice-of-law
rules for certain types of contracts, such as contracts for the sale of goods
and for the provision of services (Article 4(1)). The list does not contain
MSAs. Under the Regulation, where the contract in question is notcovered by the list, it is to be governed by the law of the country where
the party required to effect the “characteristic performance of thecontract” has his habitual residence (Article 4(2)). Since MSAs often
contain mutual concessions, it may be unclear which performance ischaracteristic. For the cases where the applicable law cannot be
determined pursuant to paragraphs 1 or 2 of Article 4, the Regulation
provides for a fall-back rule, which says that the contract is to be governedby the law of the country with which it is most closely connected (Article
4(4)).
This rule, too, raises a difficult issue of interpretation, when applied to
MSAs. While the evaluation of closeness depends on all the circumstances of the case, the places where the mediation was conducted orwhere the MSA was concluded would not be significant. The country
whose law governs the underlying dispute would be a more significant
factor but will not be determinative. While the illustration above is basedon the Rome I Regulation, it is not difficult to imagine that other sets ofchoice-of-law rules would also involve uncertainty over how they are tobe applied to MSAs.12
Interpretation of the Applicable Law
Even where the difficulty in ascertaining the applicable law is overcome,there may be uncertainty over how the applicable law is to be interpreted.
Under Japanese law, for example, the Civil Code provides that acontract in general is null and void for mistake under certain conditions(Article 95). This provision is also applicable to MSAs. With respect to acontract for settlement, in particular, the Civil Code provides that its terms
override any contradicting pre-existing facts (Article 696). Exactly how
these two provisions square with each other is a question of interpretationthat involves some difficulty.
__________________________________________________________
11 Regulation No 593/2008 of the European Parliament and of the Council of 17 June2008 on the law applicable to contractual obligations.

12 At an early stage of preparation for the Convention, the Working Group of the

UNCITRAL noted uncertainty regarding the law applicable to MSAs (“Report on
the work of sixty-third session” A/CN.9/861 (2015)). It doubted whether the place ofmediation and the place of conclusion of the MSA would have any relevance to thedetermination of the law applicable to the MSA (paragraph 100) and noted that thelaw governing the underlying contract might be different from the law applicable to
the MSA (paragraph 101).

70

Comparative Law Yearbook of International BusinessIn the United States, the contract law principles of many jurisdictions
are not fit to take into account the impact of the third-party mediator on
the meeting of minds of the two negotiating parties.13 The same feature ispresumably shared by a number of other legal systems. Such legal systems
may not yield a clear answer to the validity of an MSA concluded insituations like the following scenario.
A hypothetical scenario: A mediation is conducted over the amountof damages owed by the respondent to the claimant. The claimant tells
the mediator in a caucus that it is ready to settle at $50,000. At the sametime, the claimant indicates a lower figure as its bottom line but askes
the mediator to keep it secret from the respondent. Suspecting that the
respondent will always try to settle for less than the figure conveyedfrom the claimant, the mediator tells the respondent in a caucus that theclaimant will settle at $60,000. Hearing that figure, the respondent offers
to settle at $50,000. The claimant accepts the offer and an MSA is accordingly concluded at $50,000.
Later, the respondent comes to suspect that the mediator may havemanipulated figures in the caucus sessions. Forming the view that settlement at a lower figure may have been possible, the respondent refuses
to honor the MSA. The claimant brings proceedings to enforce it under
the Convention. The respondent resists enforcement, alleging that the
MSA is null and void because his consent to $50,000 was vitiated by the
mediator’s manipulation.
Risk of Undermining the Confidentiality of Mediation
Since the party resisting enforcement has the burden of proof under theConvention, if the dispute turns on the facts, that party may seek a court
order compelling the mediator to give testimony as a witness of the facts.
Thus, for example, the respondent in the hypothetical scenario above may
seek the mediator’s testimony concerning the bottom line of the claimant,
if it is a point of relevance under the law applicable to the MSA.
The mediator may resist being called as a witness by citing his duty of
non-disclosure. That duty may be founded on a statute or a contractconcluded with the parties. It is often a key to enhancing the chance ofsettlement as it enables each party to share candidly the facts, views, andsentiments with the mediator.14 No similar feature exists in other procedures__________________________________________________________
13 Anderson, “Supporting party autonomy in the enforcement of cross-border mediatedsettlement agreements: A brave new world or unchartered territory?” (2018)
Privatizing Dispute Resolution and Its Limits 1 (https://ink.library.smu.edu.sg/sol_
research/2909), paragraphs 35–39.
14 Mr Justice Briggs, “Mediation privilege?” (2009) 159 New Law Journal 550.

Koji Takahashi

71

of dispute resolution like arbitration or litigation. The mediator’s dutyof non-disclosure is one dimension of the confidentiality of mediation,i.e., the confidentiality of information communicated in the course of
mediation.15
It must be noted that the confidentiality of mediation is far fromabsolute. Whether, and in what circumstances, mediators are compelled
to testify before a court are a matter of procedure and accordingly depends
on the lex fori (the law of the forum). Thus, in the jurisdictions of theUnited States where the Uniform Mediation Act has been adopted,16
mediators may decline to testify in proceedings to enforce an MSA.17
The Model Law, on the other hand, provides that the confidentialityof mediation is subject to an exception where disclosure is required forthe purposes of enforcement of a settlement agreement.18 A similar
exception is provided in the EU Mediation Directive.19 The rationale isthe notion that where there is an allegation that fraud or duress vitiates an
MSA, the need to ascertain the truth outweighs the need to uphold theconfidentiality of mediation.
It has thus far not been a frequent occurrence for mediators to becompelled to appear in court as a witness.20 It may be because where theplaintiff relies on an MSA merely as a contract, the goal is to substantiate
its claim and the MSA is but one piece of evidence. Where the defendant
alleges that the MSA is null and void, the plaintiff may not make it the
focal point of dispute if other evidence supports its claim.
Where, on the other hand, the enforcement of an MSA is sought under
the Convention, the validity of the MSA may become the focal point.
Since the party resisting enforcement has the burden of proof, it would
have no hesitation to seek a court order compelling the mediator with__________________________________________________________
15 SeeBoulle, “International Enforceability of Mediated Settlement Agreements:
Developing the Conceptual Framework” (2014) 7(1), Contemporary Asia Arbitration
Journal 35, 63.
16 It is enacted in twelve States as of the time of writing (July 2019).
17 Uniform Mediation Act, Section 6(c). The parties are, on the other hand, compellable
to provide evidence in certain circumstances: Uniform Mediation Act, Section 6(b)(2).
18 Model Law, Article 10.
19 Article 7(1)(b) of the Directive 2008/52/EC of the European Parliament and of theCouncil of 21 May 2008 on certain aspects of mediation in civil and commercial
matters. In the United Kingdom, this exception was implemented by Rule 78.26(3)(c)of the Civil Procedure Rules. For case law to a similar effect, see, e.g., Unilever Plc
vs. The Procter & Gamble Co. [2000] 1 WLR 2536 and Farm Assist Limited vs. The
Secretary of State for the Environment, Food and Rural Affairs (No. 2) [2009] EWHC
1102.
20 Lang, “Mediator — Subpoenaed?” (2012) (https://www.mediate.com/articles/
LangM3.cfm), introduces an episode where the author was compelled to give evidence
on the mediation process he had conducted as the mediator but notes that theexperience was the first time in thirty years.

72

Comparative Law Yearbook of International Businessa view to obtaining testimony to support its allegation that the MSA isnull and void. Consequently, in a greater number of cases, mediators
will be compelled to appear in court as a witness. The confidentiality of
mediation may thus be undermined.

____________
Article 5(1)(e)The court before which the enforcement of an MSA is sought may refuse
to grant the relief where there was a serious breach by the mediator ofstandards applicable to the mediation, without which breach the party
resisting enforcement would not have entered into the MSA. The
standards of mediation may cover issues such as the independence andimpartiality of the mediator, confidentiality, and fair treatment of theparties.21
As will be seen below, this provision is problematic. Firstly, whether
it is needed is questionable. Secondly, there is a great deal of uncertainty
over how the courts will interpret it. Thirdly, it may have deleterious
effects on the important attributes of mediation: thus, it may breed “dueprocess paranoia”; it incubates the risk of depriving mediation of diverse
approaches; and it may undermine the confidentiality of mediation.
Need for this Provision
It is questionable whether Article 5(1)(e) is needed.22 Unlike an arbitralaward, which is binding on the parties irrespective of whether they like it,
an MSA is a product of voluntary agreement of both parties who had thefreedom to walk away at any time for whatever reasons. While the binding
character of an arbitral award necessitates the ex post verification of due__________________________________________________________
21 Schnabel, “The Singapore Convention on Mediation: A Framework for the Cross-

Border Recognition and Enforcement of Mediated Settlements” (2019) 19(1)Pepperdine Dispute Resolution Law Journal 1, at p. 51.
22 Anderson, “Supporting party autonomy in the enforcement of cross-border mediatedsettlement agreements: A brave new world or unchartered territory?” (2018)
Privatizing dispute resolution: trends and limits 1 (https://ink.library.smu.edu.sg/sol_
research/2909), at paragraphs 39–55, considers it apt and prudent for the Convention
to include this grounds for non-enforcement because the current contract law of many
jurisdictions in the United States is unfit to be applied to MSAs. Though this might bea good observation from the U.S. perspectives, the provisions of an international
convention cannot be defended as compensating for the inadequacy of any particularlegal system.

Koji Takahashi

73

process,23 the voluntary nature of an MSA may be considered to cure any
deficiencies or inadequacies in the conduct of the procedure.
It is arguable that to treat an MSA as directly enforceable, it should in
principle be enough if (A) neither parties’ consent is vitiated,24 (B) bothparties intend it to be treated as directly enforceable, (C) it does not violate
public policy and (D) the subject matter of the dispute is capable ofsettlement by mediation. Under Article 5 of the Convention, condition (A)is reflected in sub-paragraphs (a) to (d) of paragraph (1); condition (C) isreflected in paragraph (2)(a); and condition (D) is reflected in paragraph(2)(b). It is the position of this article that an opt-in agreement should be
required, which would satisfy condition (B). Nothing in this paradigm ofthinking, therefore, would require the additional ground for nonenforcement stipulated in Article 5(1)(e).25
In a majority of contracting States, the Convention will take effect without
any implementing legislation. If, however, a State implements the Convention through legislation, it would do well to omit Article 5(1)(e). To do sowould not constitute a violation of the Convention, since the word “may” in
Article 5 may be interpreted as indicating that the refusal of enforcement
under the stipulated grounds is permissive rather than mandatory.26
Uncertainty Over Interpretation
In General
There is a great deal of uncertainty over how the courts will interpret
Article 5(1)(e). Specifically, the uncertainty concerns (1) what standards
are applicable; (2) how the applicable standards will be interpreted; and(3) how causation may be established between the breach of the standards
and the parties’ decision to enter into the MSA.
As noted earlier, uncertainty over the interpretation of grounds for
non-enforcement may work to the disadvantage of the party resisting__________________________________________________________
23 See sub-paragraphs (b) and (d) of Article V(1) of the New York Convention.
24 An alternative model would be to introduce a scheme of ex ante accreditation of themediator or mediation institution as a substitute for verifying the validity of an MSA.
It would, however, not be possible for an international instrument like the Convention
and the Model Law to rely on the accreditation scheme of any specific country. Thismodel would not, therefore, be viable unless an internationally recognized accreditation
scheme is firmly established.
25 The same may be said of Article 5(1)(f), which makes a failure to disclose information
relating to a mediator’s independence another ground for non-enforcement.
26 Schnabel, “The Singapore Convention on Mediation: A Framework for the CrossBorder Recognition and Enforcement of Mediated Settlements” (2019) 19(1)Pepperdine Dispute Resolution Law Journal 1, at p. 42.

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Comparative Law Yearbook of International Businessenforcement since the burden of proof lies with that party. It may also
work to the detriment of the party seeking enforcement since it may
generate ancillary disputes27 and make the process of enforcement morelengthy and costly.
Set of Standards Applicable to a Mediation
It has been suggested that a serious breach of the standards applicableto the mediation may only be relied upon to resist enforcement if there
are in fact “applicable” standards.28 While this interpretation would not
be impossible, it is not obvious from the text of Article 5(1)(e), which
may be read as presupposing that every mediation is subject to somestandards.
The Convention makes no indication as to what specific set ofstandards is applicable. Since mediation is a consensual procedure, itwould be safe to assume that where the parties choose a specific set ofstandards by which the mediator agrees to abide, the chosen set ofstandards will be applicable. The parties engaged in an ad hoc mediation
may choose, for example, the UNCITRAL Conciliation Rules (1980). The
parties engaged in an institutional mediation will be deemed to havechosen the mediation rules of the given institution, which may cover
mediation standards.29
Where the parties have made no choice, it is not clear what specific setof standards is applicable. If the mediator is affiliated with a professional
body that provides for an ethical code of conduct applicable to its members, would it be deemed to be the source of the standards applicable tothe mediation? If all the sessions of the mediation are held in one place,
would the law of that place be deemed to be the source of the applicablestandards?30 What if the mediation sessions occur in a number of places?
These questions remain open.
The uncertainty over what specific set of standards is applicable exists
partly because the concept of “seat of mediation” is not as well__________________________________________________________
27 Seealso Maia, Mason, and Masucci, “The passage of a Convention on theenforcement of mediation settlements for cross-border commercial disputes” (2018)(https://www.ibanet.org/Article/NewDetail.aspx?ArticleUid=C1D7D436-D5B8-44DFBBB9-0C399EE4A176), who observe that Article 5(1)(e) may become a future
quagmire.
28 Schnabel, “The Singapore Convention on Mediation: A Framework for the CrossBorder Recognition and Enforcement of Mediated Settlements” (2019) 19(1)Pepperdine Dispute Resolution Law Journal 1, at p. 51.
29 For example, the CEDR Code of Conduct for Third Party Neutrals (2018).
30 If that legal system has adopted the Model Law or the Model Law 2002, these
instruments will become the source of the mediation standards.

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established31 as that of “seat of arbitration”. The absence of establishedpractice of designating such a place is in fact cited as a reason for notusing it as the basis for triggering the application of the Model Law
2002.32 It has resulted in there being no objective way of determining
when the Model Law is applicable.33
Interpretation of the Applicable Standards
Even where the difficulty in ascertaining the applicable set of standards
is overcome, uncertainty over how the applicable standards are to beinterpreted may remain.
The well-known sets of standards use broad expressions. Thus, forexample, the Model Law speaks of “fair treatment of the parties”,34 the
UNCITRAL Conciliation Rules speak of “independent and impartial
manner” and “principles of objectivity, fairness and justice”,35 theEuropean Code of Conduct for Mediators36 speaks of acting “withimpartiality”,37 and the Model Standards of Conduct for Mediators38
speaks of “impartial manner”.39 With these broad expressions, they allseem to tolerate a wide range of mediator’s conducts, embracing both theevaluative and facilitative approaches.
These sets of standards also allow a mediator to meet and communicate with each party separately.40 It is indeed usual for a mediator to haveseparate meetings (caucus sessions) with each party.41 This is a reflectionof the difference between mediation and arbitration with respect to theconception of fairness. Since a mediator does not have to be impartial in__________________________________________________________
31 The concept is, however, not unknown. See, e.g., Article 16 of the Swiss Rules ofCommercial Mediation (2007).
to Enactment and Use of the UNCITRAL Model Law on International
Commercial Conciliation (2002), paragraph 30.
33 For critical observations, see Binder, International Commercial Arbitration andMediation in UNCITRAL Model Law Jurisdictions (4th ed., 2019), at p. 567; and Van
Ginkel, “The UNCITRAL Model Law on International Commercial Conciliation: A
Critical Appraisal” (2004) 21(1) Journal of International Arbitration 1, 14.
34 Model Law, Article 7(3).
35 UNCITRAL Conciliation Rules (1980), Article 7.
36 Developed under the auspices of the European Union.
37 European Code of Conduct for Mediators (2004), Clause 2.2.
38 Adopted jointly by the American Arbitration Association and the Association for
Conflict Resolution and approved by the American Bar Association.
39 Model Standards of Conduct for Mediators (2005), Standard II.B.
40 Article 8 of the Model Law; Article 9 of the UNCITRAL Conciliation Rules (1980);
clause 3.1. of the European Code of Conduct for Mediators (2004); and Standard
VI.A.3. of the Model Standards of Conduct for Mediators (2005).
41 Guide to Enactment and Use of the UNCITRAL Model Law on International
Commercial Conciliation (2002), paragraph 57.
32 Guide

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Comparative Law Yearbook of International Businessthe same way as an arbitrator,42 a mediator is not required to devote equalamount of time to caucus sessions with each party.43
These sets of standards, however, lack precision. If, for example, amediator acts in the way described in the hypothetical scenario above,it is uncertain whether it would constitute a serious breach of the standards
under any of these sets of standards.
How to Establish Causation
To resist the enforcement of an MSA under Article 5(1)(e), it is notenough to show a serious breach of the applicable standards but it is also
necessary to prove that the party resisting enforcement would not haveentered into the MSA without the breach.
It has been suggested that this proof of causation should be viewed asa high bar that may only be overcome in extraordinary circumstances.44
It may, however, be wondered what the basis for this interpretation is.
There is, in fact, no objective yardstick for establishing the causation.
Unlike an arbitral award or a court judgment, which is produced throughthe application of law to the facts, an MSA is merely an agreement.
Whether or not to enter into an MSA can depend on a myriad of
considerations. Whether the terms of the MSA truly reflect the strengthof each party’s legal positions will not always be decisive. Depending on
the circumstances, a more significant factor may be whether the terms will
promote wider interests of each party. An emotion, too, may play a part.
The party resisting enforcement would not necessarily need to offer arational law-based explanation for saying that, had it not been for a serious
breach of the applicable standards, it would not have entered into the
MSA. To prove that, it might just be sufficient in some situations to allude
to the possibility of a change of mind.
For example, in the hypothetical scenario above, assuming that themediator’s conduct constitutes a serious breach of the applicable standards, if the respondent wants to prove that it would not have entered into
the MSA had it not been for the breach, it might possibly be enough to__________________________________________________________
42 See Schnabel, “The Singapore Convention on Mediation: A Framework for the Cross-

Border Recognition and Enforcement of Mediated Settlements” (2019) 19(1)Pepperdine Dispute Resolution Law Journal 1, at p. 50. The equal treatment of parties
is a strict requirement in arbitration. See, e.g., Article 18 of the UNCITRAL Model
Law on International Commercial Arbitration (1985).
43 Guide to Enactment and Use of the UNCITRAL Model Law on International
Commercial Conciliation (2002), paragraph 55.
44 Schnabel, “The Singapore Convention on Mediation: A Framework for the CrossBorder Recognition and Enforcement of Mediated Settlements” (2019) 19(1)Pepperdine Dispute Resolution Law Journal 1, at p. 52.

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say that if it had been informed that the claimant was ready to settle at$50,000, it would have been motivated to try to settle at a lower sum.
Risk of Breeding “Due Process Paranoia”
The possibility of review under Article 5(1)(e) may give the mediatorsconcern that their conduct of mediation could be criticized later by the
courts at the enforcement stage. The concern may be compounded by theuncertainty over how the courts will interpret this provision. Risk-averse
mediators would be led to stay in the safe zone, confining themselves totake only conservative approaches.
The state of mind just described would be the mediation version of“due process paranoia”, a phenomenon which is widely known in arbitration.45 In arbitration, it is considered to be a cause for the prolongation ofproceedings and the escalation of costs. The same problem would infest
mediation if such paranoia sets in. Since the strength of mediation lies in
its speed and cost-effectiveness, “due process paranoia” would be moredamaging in mediation than in arbitration. Such paranoia could also
diminish the prospect of settlement, since the mediator may be inhibitedfrom trying out innovative steps that may be necessary to break a deadlock.
Risk of Depriving Mediation of a Diversity of Approaches
Once it is widely recognized that “due process paranoia” may be
exacerbated by the uncertainty over how the applicable mediation
standards will be interpreted, the framers of mediation standards may
come under pressure to use more precise expressions to describe therequired and permissible conduct of mediators. It could eventually lead tothe convergence of mediation standards.46 That would not be a salutarydevelopment because it would deprive mediation of diverse approaches.
The success of mediation often depends on the flexible use of diverse
approaches since different approaches are effective in different
circumstances. Thus, a bit of arm-twisting may facilitate a settlement and__________________________________________________________
45 See, e.g., Queen Mary University of London, White & Case, “2015 International

Arbitration Survey: Improvements and Innovations in International Arbitration”, at
p. 10.
46 Anderson, “Supporting party autonomy in the enforcement of cross-border mediatedsettlement agreements: A brave new world or unchartered territory?” (2018)
Privatizing Dispute Resolution and its Limits, paragraph 51, predicts that theConvention could provide momentum for mediation standards to converge(https://ink.library.smu.edu.sg/sol_research/2909).

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Comparative Law Yearbook of International Businessso may a kind of manipulation as described in the hypothetical scenario
above. There is even a research47 concluding that “hostile mediators” canincrease the likelihood of settlement.
Risk of Undermining the Confidentiality of Mediation
Since the party resisting enforcement has the burden of proof under theConvention, Article 5(1)(e) may induce that party to seek a court ordercompelling the mediator to testify how he conducted the mediation. Thus,
for example, the respondent in the hypothetical scenario above may seek
to uncover whether the mediator truthfully conveyed the figure he hadheard in a caucus with the claimant. As mediators may be compelled totestify in court in a greater number of cases, the confidentiality of
mediation may be undermined.

_______________________
Spectrum of Sophistication
The Convention is only applicable to international commercial mediations.48 Consumer or employment disputes, in particular, are excluded.49
Many international commercial mediations are highly sophisticated, withboth parties being aided by a competent team of lawyers and other experts.
It should not, however, be forgotten that there are various shapes and sizes
to international commercial mediations. Towards the other end of the spectrum, there are less sophisticated mediations, involving small businesses
represented by inexperienced counsels. As explained below, the Convention would look very different from the opposite ends of the spectrum.
Thus, with the support of competent experts, the parties engaged in ahighly sophisticated mediation are capable of crafting their MSA in
legally tight terms. If they conclude such an MSA, they are likely to expect
it to be treated as directly enforceable and would wish to avail themselvesof the regime of the Convention. Depending on the circumstances, they
are also capable of deliberately using ambiguous or nuanced terms withthe contrary intention. On the other hand, the parties engaged in a lesssophisticated mediation tend not to be so well advised of the legal niceties
and accordingly are less likely to have an expectation or assumption that
their MSA should be treated as directly enforceable.
__________________________________________________________
47 Zhang, Gino, and Norton “The Surprising Effectiveness of Hostile Mediators” (2017)

63(6) Management Science, at p. 1972.

48 Convention, Article 1(1).
49 Convention, Article 1(2).

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Where an MSA results from a highly sophisticated mediation, theuncertainty over how the courts will interpret Article 5(1)(b)(i) may be
abated. Being aided by skilled lawyers, the parties would be competent todraft an impeccable MSA with a full understanding of its implications. It
would hardly be convincing for them to maintain that their consent to the
MSA is vitiated. Where, on the other hand, the MSA results from a lesssophisticated mediation, if the party resisting enforcement argues that its
consent has been somehow vitiated, the argument cannot be dismissed as
fanciful.
The parties engaged in a highly sophisticated mediation would becapable of taking steps to avert some of the difficulties or problems arisingfrom the application of the Convention. Thus, they could mitigate theuncertainty over the interpretation of Article 5(1)(b)(i) by inserting an
express choice-of-law clause in their MSAs. They could also commence
their mediation with an agreement to a specific set of mediation standards
with a view to alleviating the uncertainty over the interpretation of Article
5(1)(e). If they so wish, they could also agree, before or after reaching an
MSA, to waive any violation of the applicable standards. The parties
engaged in a less sophisticated mediation would not have the foresight totake such steps.
When evaluating the Convention, it is important to take into accountthe perspectives from both ends of the spectrum. With that in mind, we
will now turn to consider how the opt-out option will actually work andevaluate the opt-in model.

______________
Opt-Out Option
As mentioned earlier, the Convention effectively allows the parties to opt
out of its regime by so indicating in their MSA under Article 5(1)(d). This
opt-out option is largely unproblematic when viewed from the perspectiveof highly sophisticated mediations. As will be seen below, however, it
will not adequately protect the interest of the parties who prefer to stayoutside the Convention’s regime but fail to procure the agreement of theircounter party. Nor will it adequately protect the interest of the parties who
are not well informed.
Party Who Fails to Procure Counter Party’s Agreement to Opt Out
Since the intention to opt out must be indicated in an MSA, the opt-out
option can only be taken by an agreement of both parties. This means that

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Comparative Law Yearbook of International Businesseven where one of the parties prefers to stay outside the regime of theConvention, it is applicable if the other party does not agree to opt out.
It seems contrary to the character of mediation as a process of selfdetermination that the regime of the Convention cannot be derogated fromwithout the consent of both parties. The default position should be that an
MSA only has the effect as an ordinary contract because that is the effectthat the parties to any contract would expect. The direct enforcement
under the Convention is a special treatment that would not result naturally
from the fact that an MSA is a contract.
Parties Who Are Not Well Informed
The opt-out option does not adequately protect the interest of the parties
who are not well informed. The idea of opting out of the Convention may
not occur to such parties. Even if it does, they may not be able to make an
informed decision to opt out by properly weighing up the benefit of theConvention against the difficulties and problems sketched out earlier inthis article.
Thus, they may find themselves in the position of resisting enforcement without ever having contemplated that possibility or ever having
been advised of the meaning of direct enforcement as distinguished fromthe normal effect of a contract. They may find themselves in the positionof grappling with the uncertainty over how some of the grounds for nonenforcement may be interpreted without ever having expected the
difficulty. And they may find themselves in the position of struggling todischarge the burden of proof without ever having anticipated that theburden will be imposed upon them.

____________
Opt-In Model
As seen earlier, the contracting States may elect to enter the reservation
under Article 8(1)(b) in favor of the opt-in model by declaring that they
will apply the Convention only to the extent that the parties to an MSA
have agreed to its application. The reservation may be entered into at thetime of ratification or thereafter.
The opt-in model would obviously protect the interest of the parties
who prefer to stay outside the Convention’s regime. As seen below, it
would also serve well the interest of the parties who wish to submit to theConvention’s regime. Even in the situations where there are parties who
fail to opt in, this model is defensible.

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Parties Who Wish to Opt In
The opt-in model will serve well the interest of the parties who wish to
submit to the regime of the Convention. As seen earlier, such parties arelikely to be engaged in a highly sophisticated mediation. The opt-in model
would not get in their way since concluding an agreement to opt in would
only be a short step for them. Aided by competent lawyers, such parties
should be able to opt in with a full appreciation of what the application of
the Convention will entail.
Thus, they would be conscious that the uncertainty over how the courts
may interpret some of the grounds for non-enforcement might generate
ancillary disputes, making the process of enforcement lengthy and costly.
They would also be aware that the confidentiality of mediation would
not be absolute as they should be able to anticipate that the party resisting
enforcement may seek and obtain a court order compelling the mediator
to testify as a witness. They should also be able to embrace the possibility
that the “due process paranoia” might set in, with the result that the mediatormight shy away from taking anything but a conservative approach.
Parties Who Fail to Opt In
A party may fail to opt in if it is unaware of the need to opt in or if itcannot procure an agreement of the other party to opt in. The parties who
fail to opt in will obviously miss out on the benefit of the Convention. Itshould not, however, be regarded as a sufficient or good reason to criticize
the opt-in model.
In the first place, an MSA is not in as much need for direct enforcement
as an arbitral award. Unlike an arbitral award, which is binding on theparties, an MSA is a product of a voluntary agreement of both parties.
They will, therefore, usually honor it unless they come to regret the terms
they have agreed to or they have signed it purely as a delaying tactic.
Secondly, the direct enforcement under the Convention is a special
treatment given to the qualifying MSAs. It would be consistent with thecharacter of mediation as a process of self-determination to require a fully
informed consent from both parties as a condition for obtaining the special
treatment.
Thirdly, the benefit of the Convention does not come free. As seen
earlier in this article, there are a number of difficulties and problems that
may arise from the application of the Convention. The Convention should,
therefore, be applied only where both parties elect to submit to its regime
with a full appreciation of its implications. It may accordingly be said thatthe opt-in model safeguards the interest of the parties who are unaware of

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Comparative Law Yearbook of International Businessthe need to opt in50 as well as the interest of the parties who do not wish
to submit to the Convention’s regime.

__________
Conclusion
The Convention aims to promote mediation by facilitating theenforcement of MSAs. The promotion of mediation is a worthy cause
particularly today as arbitration has become slow and costly. Mediation
can serve as a faster and less expensive alternative to arbitration.
The Convention is, however, not free from difficulties and problems.
Thus, the provisions laying down the grounds for non-enforcement may
not be interpreted broadly enough to carve out all the MSAs that the party
resisting enforcement did not expect or assume to be treated as directly
enforceable. There is a great deal of uncertainty over how the courts willinterpret some of the provisions, which may work to the disadvantage
or detriment of both parties. There is a danger that the application of someof the provisions may have the effect of undermining the important
attributes of mediation such as confidentiality, the efficiency ofprocedure, and the diversity of approaches.
Given that the Convention offers benefit in the form of facilitating theenforcement of MSAs, but its application may also give rise to somedifficulties and problems, it is important to ensure:(1) Where both parties engaged in a mediation wish to avail themselvesof the benefit of the Convention, they will do so with the fullawareness of the difficulties and problems that may arise;(2) Where either of the parties engaged in a mediation prefers to stayoutside the Convention’s regime, it will be able to do so, so that it
will not, against its will, be put in the position of having to resist
enforcement under the Convention; and(3) Where either of the parties engaged in a mediation is not
sufficiently well informed to properly weigh up the benefit against
the difficulties and problems, it will be left outside the Convention,
so that it will not be unwittingly put in the position of having toresist enforcement under the Convention.
The parties engaged in a highly sophisticated mediation will findthemselves often in situation (1) but maybe sometimes in situation (2).
__________________________________________________________
50 See also Deason, who stresses the need to protect parties with less sophisticatedattorneys from unfair surprise, in “Agreements in International Commercial
Mediation: A New Legal Framework”, 22 Disp. Resol. Mag. 32, 36 (2015).

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The parties engaged in a less sophisticated mediation may find themselvesin situation (3).
The opt-out option available under Article 5(1)(d) will give rise to no
difficulty in situation (1) since the parties in that situation would not wish
to take that option. The opt-out option, however, does not adequately
protect the interest of the parties in the situations (2) and (3).
On the other hand, the opt-in model, which the contracting States may
adopt by entering into the reservation under Article 8(1)(b), would operatefine in all these situations. It is accordingly concluded that when States
ratify the Convention, they should enter into the reservation in favor of
the opt-in model. Likewise, when States implement the Model Law intheir legal systems, they should modify it to adopt the opt-in model.