ICC Mediation
3/01/2021 by International Arbitration
The Mediation Rules of the International Chamber of Commerce (the “ICC Mediation Rules” or the “Rules“) came into force on 1 January 2014 to replace the ICC’s 2001 Amicable Dispute Resolution Rules.
The ICC International Center for ADR proposes services including expert appraisal and dispute boards, which can be used separately, successively or concurrently. The ICC International Center for ADR has noted that there has been a growing use of the ICC mediation rules due to the pandemic. That said, the use of mediation to resolve international disputes still pales in comparison to the use of arbitration, with 45 ICC mediations registered in 2020 as compared to 946 ICC arbitrations.[1]
The advantages of mediation, as compared to arbitration or litigation, are often overlooked by parties facing a dispute. Mediation proceedings are confidential, less expensive than arbitration or litigation, and will typically resolve disputes far more swiftly than arbitration or litigation while doing less harm to the parties’ existing relationship. However, the primary disadvantage of mediation is that, since the decision depends on the parties themselves, rather than the ruling of a neutral third party, settlement may not arise and the parties may not succeed in resolving their dispute, even with the assistance of a professional mediator.
Thus, mediation is most appropriate when both parties are willing to seek to resolve their dispute with the assistance of a professional mediator, in order to avoid the time and costs of arbitration or litigation, while also minimizing harm to their relationship. Parties with ongoing relationships are particularly well-advised to attempt mediation prior to initiating arbitration or litigation.
The ICC Mediation Rules are available in multiple languages such as English, Chinese, Slovak and Turkish. Mediation guidance notes also exist. Their aim is to offer guidance when choosing and organizing mediations.[2]
Scope of Application of the ICC Mediation Rules
The ICC Mediation Rules can apply where there is an existing agreement between the parties to refer to them. Such clauses may be optional or obligatory.
The ICC’s model, optional mediation clause reads: “The parties may at any time, without prejudice to any other proceedings, seek to settle any dispute arising out of or in connection with the present contract in accordance with the ICC Mediation Rules.”
The ICC’s model, obligatory mediation clause reads: “In the event of any dispute arising out of or in connection with the present contract, the parties agree in the first instance to discuss and consider referring the dispute to the ICC Mediation Rules.“
However, as indicated in Article 3 of the ICC Mediation Rules, mediation can also begin without a pre-existing agreement calling for ICC Mediation between the parties. In this case, the party wishing to propose referring the dispute to be resolved under the ICC Mediation Rules must send a request to the Centre containing the information listed in Article 2 of the ICC Mediation Rules.
Article 2 of the Rules specifies the conditions under which a request for mediation must be made. The request for mediation must include “a description of the dispute including, if possible, an assessment of its value” and “any joint nomination by all of the parties of a Mediator or any agreement of all of the parties as to the attributes of a Mediator to be appointed by the Centre where no joint nomination has been made, or, in the absence of any such agreement, any proposal as to the attributes of a Mediator”.[3]
If the parties do not reach an agreement to refer the dispute to mediation, however, mediation cannot take place.
The Language and Place of Mediation
Pursuant to Article 4 of the Rules, if the parties do not reach an agreement regarding the place and language of the mediation, the Centre or the mediator (after his or her appointment) will determine the location and the language in which the mediation shall be conducted.
Selection of the Mediator
According to Article 5 of the Rules, the parties are invited to jointly nominate one mediator or more (obviously, costs will increase with the appointment of more than one mediator). If they fail to do so, the Centre shall appoint the mediator or propose a list of mediators to the parties. The Centre shall take into account, while appointing the mediator, “the attributes, if any, which have been agreed upon by all of the parties”[4]including “but not limited to nationality, language skills, training, qualifications and experience, and the prospective Mediator’s availability and ability to conduct the mediation in accordance with the Rules.”[5]
Conduct of ICC Mediation Proceedings
Mediation is by nature confidential, unless otherwise agreed by the parties.[6]Commencing mediation does not prevent the parties to refer their dispute to arbitration, should mediation not succeed.[7]
Pursuant to Article 7 of the Rules, the mediator shall meet and confer with the Parties to discuss the conduct of the mediation. The mediator shall treat the parties “with fairness and impartiality”.[8] The parties shall also act in good faith during the entire proceedings.[9]
The termination of the mediation is subject to written confirmation of termination by the Centre to the parties after the occurrence of the earliest of:[10]
the signing by the parties of a settlement agreement;
the notification in writing made to the Mediator by any party, at any time after it has received the Mediator’s note referred to in Article 7(2), that such party has decided no longer to pursue the mediation;
the notification in writing by the Mediator to the parties that the mediation has been completed;
the notification in writing by the Mediator to the parties that, in the Mediator’s opinion, the mediation will not resolve the dispute between the parties;
the notification in writing by the Centre to the parties that any time limit set for the Proceedings, including any extension thereof, has expired;
the notification in writing by the Centre to the parties, not less than seven days after the due date for any payment by one or more parties pursuant to the Rules, that such payment has not been made; or
the notification in writing by the Centre to the parties that, in the judgment of the Centre, there has been a failure to nominate a Mediator or that it has not been reasonably possible to appoint a Mediator.
Cost of ICC Mediation
The fees and cost of ICC mediation are detailed in Article 6 and Appendix of the Rules. The filing fee of USD 3,000.00 is nonrefundable.
As is the case for arbitration, the ICC’s administrative expenses depend on the amounts in dispute:[11]
With regard to the mediator’s fees, which are typically greater than the ICC’s administrative fees, they are calculated on the basis of the time spent by the mediator in the proceedings.[12] These fees are based on an hourly rate fixed by the Centre. Similarly, the expenses of the Mediators are fixed by the Centre.
[1] https://www.globallegalpost.com/big-stories/icc-celebrates-record-year-for-arbitration-and-mediation-caseloads-34471915/: “receiving its 400th request for mediation, having added 77 new cases in 2020, of which 45 were mediations, a new record”.
[2] 2014 Mediation Guidance Notes.
[3] ICC Mediation Rules, Article 2.
[4] ICC Mediation Rules, Article 5.5.
[5] ICC Mediation Rules, Article 5.4.
[6] ICC Mediation Rules, Article 9.
[7] ICC Mediation Rules, Article 10.2.
[8] ICC Mediation Rules, Article 7.3.
[9] ICC Mediation Rules, Article 7.4.
[10] ICC Mediation Rules, Article 8.1.
[11] ICC Mediation Rules, Appendix – Article 2.1.
[12] ICC Mediation Rules, Appendix – Article 3.
Filed Under: ICC Arbitration