TRANSNATIONAL MEDIATION: LEVERAGING OPTIONS AND INTERSECTIONS FOR RESOLVING DISPUTES IN AFRICA
Being Keynote Address delivered by Chief Bayo Ojo, SAN, CON* at the ICMC 2020 Annual Conference on 1st December 2020
Let me start by thanking the President of ICMC, Chair Conference Planning Committee and the organisers of this Conference for inviting me to give this keynote address. Though the theme for the Conference is “Transnational Commercial Mediation: Leveraging Options and Intersections in Africa”, I was given the liberty to choose my topic provided it is analogous to the theme. I have therefore decided to speak on the topic ‘Transnational Mediation: Leveraging Options and Intersections for Resolving disputes in Africa’.
The mediator’s role is to help parties reach an agreement whose terms are acceptable to them, even if the mediator disagrees with the wisdom or fairness of the resolution. One difficult task for beginning a mediation is for the mediator to purge from his or her vocabulary and mannerisms those unconscious words and gestures that may be regarded as judgmental. We are all familiar with the intensive active listener’s effort to encourage further talk by nodding vigorously in response to a narrative tale. While the nods signal encouragement to the response of the talker, they also may suggest to another watching disputant that the mediator believes every lie and half-truth the opposite party is spewing out.
The mediator must be able to appreciate the fears, history and perceptions of every party that underlay the discussion. Only then will the parties have confidence that the alternative solutions developed by a mediator will not be blind to their needs.
The parties must feel that the mediator has clearly heard their presentations. From the parties’ perspective, a person who is constantly talking or asking questions may have some purpose in mind, but whatever it is, it is probably not consistent with that of the parties.
The parties do not want to be treated by the mediator in a fashion similar to the one accorded them by the faceless bureaucracy. They want someone who will assist them no matter how long it takes.
While all of these interpersonal qualities are essential for ensuring and maintaining effective communication, mediation involves much more. Disputants look to the mediator for intellectual qualities, as well as sensitivity, and expect the mediator to also be intelligent, flexible, imaginative, resourceful and persuasive.
Parties consciously or unconsciously expect the mediator to help them resolve their dispute. While they must educate the mediator about their problem, they do not want to be handicapped by a mediator’s slowness of mind; nor do they expect to have to educate the mediator about the world in which they live and operate.
The fluidity of the discussion between the parties must be enhanced, not retarded by the mediator’s presence.
If the mediator cannot add fresh ideas or perspectives to the problem, then his or her presence contributes little to the discussion.
The mediator must be able to convince or persuade parties to demonstrate flexibility. That does not mean that the mediator must talk a lot; rather, when he or she talks, it must be effective.
Finally, there are some intangible aspects the parties to a dispute expect to find in a prospective mediator. They must be respected persons in the society and none defensive
Everybody thinks his or her problem is important. If the mediator is intoxicated when he or she appears for the hearing, then that reflects not only on the mediator’s character but also on the program of mechanism offering the mediation services. The signals, in such a case, are clear; the problem is unimportant. On the other hand, if the mediator is well trained and treats the parties as he or she would his or her own family then the parties feel that they are getting the kind of attention they deserve.
The mediator cannot be putty in the parties’ hands. Rather, the mediator is often someone who bears the brunt of the parties’ healthy ventilation of spleen and frustration. If a party makes a derogatory remark about the courts or the competence of the mediator and the mediator responds defensively, then the goal of promoting effective dialogue is vitiated. Indeed, the mediator quickly may become a party to a new dispute.
Mediationis a quasi-formal process for handling conflict, subject to certain ground rules and structure, which it is the function of the mediator to apply evenly and effectively.
The mediator’s presence introduces new dynamics to the discussion of a dispute by the parties. The skill of mediation is to make those dynamics a positive and productive one.
Each party has needs, aspirations, and frustrations. The mediator’s function is to make certain that each side understands the constraints of the other.
Progress in developing mutually satisfactory resolutions to parties’ needs, frequently hinge on the ability to discuss issues and possible settlement in objective and non-judgmental terms that only the mediator can articulate in the passion of a heated dispute.
The mediator sometimes identifies or provides access to information or support services of which the parties are unaware.
No agreement will emerge if proposed solutions are inflated. The mediator’s function is to confront the proponents of such proposals with an understanding of their consequences in the real world.
That soaks up the parties’ feelings and frustrations and helps them channel their energies into positive approaches to the issues.
(h) A scribe
This is one who writes or assists in the writing of the agreement, checking that all issues are covered and that all terms of the agreement are clear.
“Many times, the leaders of by standing countries are tapped to play mediator roles because of their acceptability to the parties rather than their prior mediation experience. While all experienced diplomats understand at least the rudiments of mediation, most are not skilled in the art or science of the process”.
An acceptable definition of Transnational Commercial Mediation will depend on the particular approach and the discipline from which it is viewed. However, a common denominator is that it is an engagement both at the inter and intra state conflicts levels by an external actor such as the AU, ECOWAS etc. or even private individuals. Another denominator is that it is integral to peacemaking and has the potential to be instrumental in preventing, managing and ending conflicts in Africa.
For the above reasons, they are reluctant to engage in peace talks even when they have begun to contemplate a resolution of their conflict.
“the enmity between Taylor and Nigeria was the main impediment to securing a lasting peace agreement.”
The question to ask and which is discussed next is whether in the first place, there is any good reason for Transnational Commercial Mediation in Africa.
The 2010 ICC chart for instance, compared the average cost and time of international commercial arbitration and mediation. The findings as to the time components related to mediation are as follows:
Preparation: 3-5 days
Hearing: 1-2 days
Overall Resolution Time: 2-3 months
The same 2010 ICC chart also noted the average total Costs for an international arbitration with 3 arbitrators to be US$2,836,000.00, while that of international mediation with one mediator to be US $120,000.00. Furthermore the AAA International survey of 2006 of the Fortune 1000 companies noted that in seventy-seven (77%) percent of mediated cases, the overall costs of resolving the dispute were reduced and that in eighty (80%) percent of the cases mediated, mediation also reduced the total time to resolve disputes.
The view is that mediation, being a conciliatory process, provides parties with the opportunity to reach an agreed settlement of their dispute resulting in a solution acceptable to both sides. This aspect of mediation also allows for and enhances future business relationships between them. Mediation by its nature requires each side to understand and negotiate with the opposite party. With the assistance of the mediator, parties are able to re-establish the trust that was compromised as a result of the dispute. Their firm view is that Mediation, unlike arbitration, is more about how parties can make their business relationship work better in the future.
iii. It Enables Parties Gain Control over the Process.
Since Mediation is less formal when compared to Arbitration, parties are able to work together to select the mediator; the location and language of the mediation; the rules they wish to apply; the method of mediation they prefer to use i.e. evaluative, facilitative, etc; whether or not to engage in negotiations during the mediation, to what extent and for how long to do so; whether to exchange information, documents and experts’ reports during the mediation, and to what degree; whether to choose to accept or reject proposals or respond to proposals as they please; whether to choose to terminate the mediation process whenever they want to; and whether or not to craft the terms and conditions of a mediation settlement agreement (among several others).
iv. It Enable Parties Gain Control over the Outcome and Remedies
In contrast to arbitration which can offer only a limited range of remedies to resolve a dispute, proponents of transnational commercial mediation are of the view that there are virtually no limits on what kinds of remedies and conditions the parties can agree to in their Mediated Settlement Agreement (MSA) as long as the terms and conditions are not illegal, or against the public policy of the jurisdiction.
The enforceability of contractual agreements to mediate will obviously go a long way to contribute not only to the development, but success of transnational commercial mediation in Africa. For example, a mediation agreement which sets out the specific conditions and time for triggering and/or terminating the mediation; the name of the international mediation service provider; the mediation rules to be used (e.g., ICDR, ICCADR Rules, LCIA, CPR, UNCITRAL Conciliation Rules); the substantive law to be applied during mediation; the location where the mediation will take place; and, the language in which the mediation will be conducted (among others), will be of significant consideration in the enforceability of such an agreement by a court and will certainly facilitate a more efficient and streamlined mediation in Africa.
The terms of the agreement to mediate should however set out with specificity the procedure parties have to follow in setting up and commencing the mediation; indicate at what point in the dispute the mediation ought to commence; commit parties to participate in mediation; set out the location, language and which mediation rules to use; the substantive law to be applied during the mediation; and specify at what point and under what circumstances the mediation efforts will be considered fulfilled and terminated.
Selecting an experienced mediator is very crucial in preparing for a transnational commercial mediation in order to increase the chances of a successful mediation process. Knowledge by the mediator of the substantive aspects of the dispute and the mediator’s prior experience, degree of trans-cultural sophistication and familiarity with the cultural, commercial and legal issues involved in the particular dispute is equally important. If parties are unable to agree on the choice of a mediator, they can consider the recommendations and methods of selection that may be offered by existing ADR institutions.
Another important consideration for parties and counsel in preparing for transnational commercial mediation is the method of mediation to be used by the mediator; that is, should the mediator be “facilitative” or “evaluative” in his/her approach; and, how proactive should he/she be in so far as presenting settlement proposals. The answer to these questions may well depend to some degree, on which mediation rules are used. For example, Rule 7 of the ICDR Mediation Rules gives the mediator the option to make oral or written recommendations for settlement. Likewise, Article 7 (4) of the UNCITRAL Conciliation Rules allows the conciliator to make a proposal for settlement at any stage of the proceedings.
It is advised that in any transnational mediation, the role and authority of the mediator, mediation rules selected and the method of mediation to be used should be set out and clarified upfront by parties in their dispute resolution agreement or by mutual agreement during the dispute. The power and scope given to mediators pursuant to some of the international mediation rules include the power to recommend settlements, to investigate the facts and law of the dispute, and to issue a written report with the mediator’s recommendations.
The language of the mediation is significant in any transnational commercial mediation particularly in the selection of the mediator and even in the terms of the agreement to mediate.
The mediator is expected to be proficient in the language selected for the mediation and is also expected to be able to communicate effectively with parties and their counsel. If this important item is not addressed in the parties’ agreement to mediate, it may be decided by the mediation rules selected. As an example, Rule 18 of the ICDR Mediation Rules provides that “… if the parties have not agreed otherwise, the language(s) of the mediation shall be that of the documents containing the mediation agreement.” Under Article 5.5 of the LCIA Mediation Rules, the mediator decides “… the language(s) in which the mediation will be conducted.” Under Article 5.4 of the ICC ADR Rules, the agreement of the parties control the language to be used in the mediation but if there is no agreement, the mediator then decides the language or languages to be used and Rule 3.4(c) of the CPR European Mediation Procedure Rules provides that “…. unless otherwise agreed by the parties, the mediator decides the language in which the mediation is to be conducted and whether any documents should be translated.”
Parties and their counsel should always anticipate and prepare for potential language factors. Furthermore, qualified interpreters should be used if they require assistance with accurate verbal communications.
It is essential to investigate, anticipate and prepare for cultural factors before attending the mediation. The reason is that a person’s culture and legal training (i.e., common law vs. civil law), and the “legal culture” of his/her practice experience is very likely to have an impact (positive or negative) on his/her approach and attitude towards the process.
The parties and their counsel, as part of their preparation, need to have an understanding of the communication patterns and norms (verbal and nonverbal) of the opposing party and their counsel. Areas of concern include “high context cultures” (information found in context which may not always be verbal), and of “low context cultures” (communicating directly and in straightforward manner as well as relying on verbal communication).
In deciding at what point in the dispute the mediation should commence or in proposing mediation during an arbitration process, parties need to consider the timing for the commencement of the mediation, the availability of documents and evidence as well as the cost of making that evidence available.
Knowledge of the law applicable to the dispute could also affect the timing of when the mediation is held. For instance, an early mediation of a dispute that is otherwise subject to arbitration may not allow for the parties to develop an in-depth analysis of the legal principles applicable under the law of the contract to the facts and legal issues of the dispute and this may in turn diminish the likelihood of a successful mediation.
Knowledge of the law should also include knowledge of the law of the jurisdiction where the mediation is held and/or where an MSA that is converted into an arbitration award by consent would be enforced. This is essential because there might be the need to determine whether an MSA reached by parties in a dispute otherwise subject to arbitration but reached before an arbitrator is appointed, which is then turned into a consent arbitration award by the mediator appointed as arbitrator, would be recognized and enforced under the law of the jurisdiction where the mediation was held and/or under the law of the jurisdiction where the agreed arbitration award would be enforced.
Contractual transactions have become much more complex in international business transactions. For instance, there could be: (i) a single contract with bilateral relationships; or (ii) a single contract with multiparty relationships; or (iii) multi contracts with multiparty relationships; or (iv) multi contracts with bilateral relationships. Several contracts or agreements such as (i) contract of sale; (ii) licensing agreement; (iii) contract of carriage; (iv) contract of insurance; (v) agreement of payment; and (vi) agreement for dispute resolution (to mention just a few) may also need to be reached for that singular transaction.
This address will not be complete if the problems associated with Transnational Commercial Mediation in Africa are not considered and/or discussed.
The extent of the effectiveness of an agreement to mediate is limited in its efficiency by the parties’ willingness to negotiate in good faith.
Mediation, by its very nature, gives the parties control over the negotiation process but this control also allows either of them to terminate the mediation at whatever time they desire. The risk of one party walking away from mediation always exists and this often discourage them from making good faith effort to attempt resolving all or some of the components of their dispute.
Confidentiality is critical in any process of mediation. In a transnational commercial mediation, the scope and extent of confidentiality protection can and does vary from country to country as well as among the various international mediation rule providers. This consideration takes greater importance if the mediation effort does not succeed because the information shared during mediation is then known to the other party even if that information is not admissible in a court or in a tribunal. Besides, the mediator would have become aware of confidential information from each of the parties during private caucuses.
The issue of confidentiality is a risk factor in international commercial mediation that must be considered especially in Med-Arb proceedings where the mediator may also be the arbitrator. This is an area that must be carefully investigated and considered by counsel; i.e.: counsel should find out what law applies to confidentiality of mediation in the jurisdiction where the mediation is held; and, what do the international mediation rules chosen by the parties provide about the confidentiality of mediation communication.
In transnational commercial disputes, additional attention needs to be given to how a mediation settlement agreement (MSA) will be enforced outside the jurisdiction where the mediation takes place. This is because pursuing enforcement of a transnational mediation settlement agreement on a breach of contract basis in the local court of a foreign country can take significant time or be expensive and can be a much less reliable enforcement tool.
Mediation is often underutilized at the transnational level because of uncertain enforcement practices of MSAs in various jurisdictions. While some nations have promoted legislation for the summary enforcement of mediation settlement agreements obtained by parties in the context of a transnational commercial mediation or arbitration, these nations differ as to the degree of the “arbitral context” required in their legislation to record a settlement agreement as an arbitration award.
Some of the practices put in place to enable enforcement of an MSA include:
The Arb-Med-Arb approach begins as arbitration but at some point in the process, parties try to settle the dispute through the use of mediation. A suggestion was recently made that arbitral institutions should consider incorporating into their arbitration rules a short “window” of time to permit the parties seek a resolution of their dispute outside the arbitration process by requiring a temporary suspension of the arbitration so that a settlement may be attempted through mediation.
Under this method, if the parties are not able to reach an agreement (in whole or in part) during the mediation effort, the arbitration process will then be continued so that the arbitrator can hear and determine the matter and enter an award based on adjudication. Any issues that may have been resolved at mediation would be incorporated by consent into the arbitration award. If the parties do reach an agreement of the entire dispute at mediation, their agreement will then be entered by the arbitrator, by consent, as an arbitration award enforceable under the New York Convention.
In other words, for greater likelihood of the enforcement of an arbitral award under the Arb-Med-Arb process, the mediation settlement agreement should be reached as a result of a process which commenced as an arbitration of an existing dispute, and not a process which began as a mediation, and was later turned into an arbitration process after an MSA was reached for the sole purpose of entering an agreed award.
Med-Arb is a method wherein the arbitrator can act as an arbitrator and/or a mediator during the same procedure. One advantage of this method is that parties can settle the entire matter at mediation, or in the alternative, come to an agreement at mediation on certain components of the dispute. As to those components, the arbitrator can function as a mediator, resolve those specific issues by agreement and incorporate the mediated settlement agreement into the arbitral award rendered by the “arbitrator” at the conclusion of the process.
In Med-Arb, the arbitrator is able hear both sides of a dispute during an adversarial hearing with presentations of legal evidence and if the arbitrator feels he/she has obtained sufficient information, the arbitrator can then assume the role of a mediator to assist the parties obtain a settlement on part of, or the entire dispute. As to the components of the dispute not settled during the mediation phase, the arbitrator will hear and decide those as part of the arbitration phase of the process and incorporate his decision on those issues into the arbitral award.
Given the shift in Africa’s relationship with international and regional organizations, the time has come to pursue more advanced mediation strategies and tactics in order to prevent, manage and resolve conflicts in the continent. The time has also come to adopt specialized and systematic approach to mediation; institutionalize mediation; establish measures to learn from experiences; record lessons for future best practice; and, make an in-depth discussion to inform the development of a comprehensive transnational mediation strategy. The United Nations Convention on International Settlement Agreements Resulting from Mediation otherwise known as the Singapore is a very useful instrument in this regard. Similarly, the dispute resolution mechanism that is being developed under the African Continental Free Trade Area Agreement will also compliment this.
I thank you all for listening and wish you all a successful conference.
*Chief Bayo Ojo, a Senior Advocate of Nigeria,was called to the Nigerian Bar in 1978 after graduating from the University of Lagos in 1977. He obtained a LL.M from the London School of Economics and Political Science, University of London in 1982 and later got admitted as a Solicitor of the Supreme Court of England and Wales. He is a former Attorney General and Minister of Justice of Nigeria, past President of the Nigerian Bar Association and past Chairman of the Chartered Institute of Arbitrators, Nigeria Branch, past member of the Board of Trustees of the Chartered Institute of Arbitrators, London, former member of the ICSID Panel of Arbitrators, Washington, the Permanent Court of Arbitration, Hague and the United Nations International Law Commission in Geneva, President of the African Users’ Council of the LCIA and alternate Chairperson of the UNESCO Appeals Board in Paris. He is a Chartered Arbitrator who has acted as counsel, sole arbitrator and member of panel in numerous domestic and international commercial arbitrations including at the ICC, ICSID, LCIA and AAA. He is a Fellow of the Institute of Chartered Mediators and Conciliators of Nigeria and President of the African Arbitration Association. He is the Editor-in-Chief of the Nigerian Journal of Arbitration and Mediation, African Journal of Arbitration and Mediation and a Patron of the Nigerian Society of International Law. He is a recipient of the National Honour of Commander of the Order of the Niger (CON).
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