The evolving and creative use of the combined strengths of mediation and arbitration once again reinforces the power of synergy. The development, which is already taking root in some jurisdictions, will appear to give the lie to certain marketing communication which seek to promote one process above the other. Common street wisdom indicates the power of synergy.
It is not unusual to sense a certain rivalry between Arbitrators and Mediators which is unspoken. It pops up when practitioners market their skills or engage prospects in the exploration of options to resolving a dispute. In one such occasion, a practitioner emphatically stated that if it was not mediation, then it would be nothing else, because he would not practise litigation through the back door.
Fast forward to some top-level official meetings where talks about alternative dispute resolution zero in exclusively to Arbitration. And just because conferees are well positioned arbitrators, nothing significant, if any, is said about mediation which is perhaps the fastest growing platform in the ADR sphere today. As a firm believer in the immense possibilities of the various platforms in ADR, I see no reason for mutual suspicion because for good measure, these alternatives to litigation may not be mutually exclusive.
A new hybrid which presents a more welcome approach to enhancing the utility of ADR appears to have been found in the Arb-Med-Arb window. This is a hybrid of arbitration and mediation where mediation is attempted in the course of arbitral proceedings. If the dispute is settled through mediation, the mediated settlement agreement is recorded as a consent arbitration award under the New York Convention. Where the attempt at mediation fails, the matter proceeds seamlessly to the arbitral segment of the ADR loop
What the foregoing entails in practice is that parties who have signed up for arbitration in any contractual agreement may for purposes of flexibility and speed opt for a combined use of both platforms in a manner that will allow the parties a strong voice in the resolution of their dispute during the arbitration. What the process thus achieves is the combined advantages of confidentiality, neutrality, enforceability and finality of the ADR process
What clearly stands out in this hybrid which a writer has described as a flexible and efficient form of alternative dispute resolution is that the intake of the process is arbitration. It is a new variant of arbitration which for purposes of a more robust outcome incorporates mediation within its procedure. Thus, when all preliminary commencement processes of the arbitration have taken off, parties are given the opportunity to try a third party facilitated negotiation of the issues within the arbitral proceedings.
Both arbitration and mediation have glaring areas of weaknesses that patrons of the processes have often been concerned about. Mediation for instance is so flexible that no one is compelled to attend its sittings; thus, it becomes a frustrating exercise to refer a matter to mediation and the respondent pooh-poohs the process without any legal compulsion or sanction. Arbitration on the other hand is attractive to users because of its compulsion and finality once you sign on to it. However, its present processes of delays and escalating costs no longer make it much attractive.
In an article published in December 2019, Edward Liu, Legal Director, Hill Dickinson Hong Kong, noted that: “From the perspective of the global shipping market, arbitration has been widely adopted to resolve maritime disputes. Traditionally, the maritime industry considers that arbitration has more advantages than litigation. However, modern international commercial arbitration, including maritime arbitration, is facing major issues on time and costs. There has been concern that modern arbitration is becoming more and more ‘judicialised’ with sophisticated and regulated procedures. This, in turn, leads to procedural delay and increase in costs. It is in such context that mediation is finding renewed vigour in resolving shipping disputes.”
The rising profile of mediation in the resolution of big-ticket transactions like shipping is bound to suffer a setback in due time if the flexibility of its referrals (summons) is left unaided. The compulsion of the arbitration clause in this hybrid as creatively packaged by the thought leaders, resolves this challenge. It is thus gratifying that the hybrid is the product of three ADR institutions comprising the Singapore International Mediation Centre (SIMC), Singapore International Arbitration Centre (SIAC) and the Singapore Chamber of Maritime Arbitration (SCMA). The value proposition is that a settlement agreement obtained through the Arb-Med-Arb process may be made a consent award. The consent award is accepted as an arbitral award, and, subject to any local legislation and/or requirements, is generally enforceable in 160 countries under the New York Convention. Parties can achieve finality whether through the mediation process or arbitration process.
Arb-Med-Arb, in my humble opinion, recommends itself as a process of drawing the finest from the alternative dispute resolution field and creating a seamless business flow for mediators and arbitrators alike. I stand to be corrected.