International Mediated Settlement Agreements: An Overview
International business disputes can be complex and time-consuming, often resulting in costly litigation. However, there is an alternative way of resolving disputes that is gaining popularity among businesses worldwide: mediation.
Mediation is a form of alternative dispute resolution (ADR) in which a neutral third party, the mediator, helps the parties involved in a dispute reach a mutually acceptable solution. The mediator does not make decisions on behalf of the parties, but rather facilitates communication and negotiation between them.
In recent years, there has been a growing trend towards the use of mediation in cross-border disputes. This is partly due to the increasing number of international agreements and conventions that promote and facilitate ADR, such as the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Mediation and the Singapore Convention on Mediation.
One important aspect of international mediation is the use of mediated settlement agreements (MSAs). An MSA is a written agreement between the parties involved in a dispute that reflects the terms of their settlement. MSAs are typically drafted by the mediator, who ensures that the terms of the agreement are clear and unambiguous.
One advantage of using an MSA is that it can be enforced in a court of law. In fact, the Singapore Convention on Mediation, which came into force in September 2020, provides for the recognition and enforcement of MSAs across borders. This means that parties to an MSA can have the same level of legal certainty and protection as they would have if they had gone through arbitration or litigation.
Another advantage of MSAs is that they allow parties to maintain control over the outcome of their dispute. Unlike in a court of law, where a judge or arbitrator makes the final decision, parties in mediation have the power to shape the terms of their settlement. This can lead to a more satisfactory outcome and a better long-term relationship between the parties.
However, it is important to note that not all disputes are suitable for mediation. In some cases, such as those involving a clear-cut legal issue or where one party is unwilling to negotiate, litigation or arbitration may be the better option.
In conclusion, international mediation and mediated settlement agreements can be a cost-effective and efficient way of resolving cross-border disputes. With the increased use of ADR and the growing number of international agreements promoting its use, businesses can benefit from the legal certainty and control over the outcome that MSAs provide. As such, it is worth considering mediation as a viable alternative to traditional dispute resolution methods.