At any given moment, multinational corporations are involved in thousands of cross-border legal disputes around the world. Big companies like Shell have 10,000 disputes going on at any given time, many of which are international, according to Doug McKay, vice president of international organizations at Shell.

Since going to court takes time and costs money, companies find alternative dispute resolution (ADR) outside of courts increasingly attractive for disputes. One form of ADR, mediation, in which a third party mediator assists the disputants to negotiate a settlement, offers companies an efficient way to resolve cross-border disputes.

On May 28, the International Chamber of Commerce (ICC) held a promotional event to celebrate the North American launch of its revised mediation rules, hosted by the law firm Simpson Thacher in New York City. Administered by the ICC International Center for ADR, the new rules were drafted by the Commission on Arbitration and ADR, a task force of dispute resolution specialists and company representatives from 29 countries. The new mediation rules replace the former ICC ADR rules, a name-change that “reflects the reality that 90 percent of cases are mediation cases,” said Andrea Carlevaris, secretary general of the ICC International Court of Arbitration®.

“The main value of the ICC mediation rules is they can help parties overcome hurdles,” said Hannah Tümpel, senior counsel and manager at the ICC International Center for ADR, during a panel discussion. Tümpel was involved in the revision of the new mediation rules.

She said that the new rules make it easier for parties to overcome common obstacles that thwart mediation. Such hurdles include how to start a mediation if it’s not included in a prior contract clause, where to mediate and in what language if both parties come from different countries, how and where to find the right mediator with the appropriate experience and language skills, and how the parties bear the cost of mediation.

The new rules address all those obstacles. If one disputant wishes to mediate, but is wary about approaching the other party for fear of showing weakness, the disputant can contact the ICC International Center for ADR, and the center will assist the parties in considering a proposal to mediate even if there is no prior mediation clause in their contract. The ICC will also help pick a neutral mediator, and can even provide a list of qualified mediators that both parties agree upon. Once both parties agree to mediate, the new rules describe the conduct of mediation and stipulate that both parties must bear the cost of mediation in equal parts, unless agreed upon otherwise.

Finally, “the true added value of institutions are emails and phone numbers,” Tümpel joked. Disputants may contact the ICC at any time for mediation guidance and assistance.

“If you’re not into mediation, you’re not the right lawyer for us”

During the event, the first panel discussion covered mediation’s relevance to businesses today. Speakers included Teresa Garcia-Reyes, senior counsel, litigation, GE Oil & Gas at General Electric; Deborah Masucci, former head of the Employment Dispute Resolution Group at AIG and chair of the International Mediation Institute; and Doug McKay, vice president of international organizations at Shell. The participants noted that mediation has become a more common and important form of cross-border dispute resolution, and companies are increasingly interested in law firms’ success rates with mediation.

“If you’re not into mediation, you’re not the right lawyer for us,” said Garcia-Reyes.

Masucci noted that organizations like ICC help add credibility to the mediation process, particularly when disputants involve an American corporation in foreign jurisdictions where the foreign party may be distrustful of a U.S. mediator.

The evening’s second panel discussion focused on the new mediation rules and how they help disputants initiate, conduct and pay for mediation proceedings. Carlevaris and Tümpel explained the new rules and their attendant guidance notes, while Robert Smit, partner and co-chair of the International Arbitration and Dispute Resolution Practice at Simpson Thacher; and Jason Fry, co-head of the International Arbitration Group at Clifford Chance LLP; offered the American and European perspective on the new rules, respectively.

While the new rules aren’t relevant for purely domestic U.S. disputes, Smit explained that for the U.S. market, “the real value of ICC mediation rules lies in international disputes.”  He said that under the new rules an American corporation can ask the ICC center to contact the other disputant to get the ball rolling on mediation, which is “valuable assistance indeed.” Smit also cited the benefit of having the ICC pick the location and language of the mediation, which eliminates the burden of leaving those contentious choices up to the mediator. Also, most American disputants don’t know where to find a qualified mediator in jurisdictions outside the United States, so Smit appreciates that the ICC can provide a list of qualified mediators to the disputants.

“Mediation has imposed itself as the main form of amicable dispute resolution,” Carlevaris concluded. The new ICC rules facilitate the mediation process, helping to avoid common obstacles and stalling.

USCIB is the American affiliate of the ICC.

Staff Contact: Josefa Sicard-Mirabal

In a ruling with important ramifications for global investment, the U.S. Supreme Court on March 5 ruled that arbitrators, as opposed to local courts, have authority to resolve jurisdictional disputes under bilateral investment treaties (BITs). USCIB had submitted a friend-of-the-court brief urging the court to rule in favor of arbitrator authority in such matters.

In a 7-2 decision, the justices upheld a $185 million award of an UNCITRAL (UN Commission on International Trade Law) tribunal in a dispute brought by BG Group of the UK under the UK-Argentina BIT, reversing an earlier circuit court ruling. Although the dispute was between British and Argentine parties, the appeal was filed in U.S. courts since the arbitration was conducted in Washington.

The outcome was in line with earlier Supreme Court rulings in commercial arbitration cases, under which arbitral tribunals have enjoyed broad discretion to determine whether contractual preconditions to arbitration have been satisfied.

Specifically, the Court noted that a treaty is a contract “between nations” and that, as a result, arbitral tribunals interpreting procedural provisions in treaties should be afforded the same level of deference as arbitral tribunals interpreting procedural provisions in contracts.

In its brief, USCIB argued: “This Court has consistently emphasized the central importance of protecting the decision of parties to a contract to resolve their disputes through arbitration. Applying that basic principle, federal courts have repeatedly held that where parties agree that a dispute should be submitted to arbitration pursuant to one of certain sets of arbitral rules – rules that include provisions delegating to the arbitral tribunal the authority to determine questions as to its own jurisdiction over the dispute – then the parties have agreed that the arbitral tribunal has the authority to resolve disputes as to arbitrability.”

By virtue of our affiliation with the International Chamber of Commerce, USCIB works closely with the ICC International Court of Arbitration®, the world’s leading forum for the settlement of cross-border commercial disputes. To learn more about ICC arbitration and ADR services on ICC’s website, please click here.

Staff contacts: Josefa Sicard-Mirabal