18 Jul 2023
The focus of the Ciarb European Branch’s 2023 Annual Conference was to review the efficiency and flexibility of the routes that lead to the recognition and enforcement of decisions and the settlement of complex international disputes. These decisions and settlements stem from various methods, including dispute boards, emergency arbitration, mediation, arbitration, domestic state courts and international state courts.
The need for such a review arose firstly from a renewed array of tools for the recognition and enforcement of a foreign decision. In addition to the 1958 New York Convention, two other international conventions on the recognition and enforcement of foreign decisions or settlements have entered the picture: the 2019 Singapore Convention on Mediation (SCM) and the 2019 Hague Judgments Convention. But the changing panorama can also be attributed to the continued development of the “international courts”.
The topic was discussed by academics, practitioners, third-party funders and consultants at the conference, and the following key takeaways arrived at:
For complex international disputes, arbitration is considered by experts to be the most efficient method, especially in terms of recognition and enforcement of the decision. However, the more complex the international dispute, the more international mediation becomes appreciated. Yet, one must consider that as the SCM is not, at present, widely ratified (it is currently ratified by 11 countries), there is not sufficient support from this instrument. Supposedly, mediation will be used more often once the SCM has had a level of ratification similar to that of the New York Convention. Panellists with mediation expertise reminded delegates that a proper mediation agreement entered into by the parties should not need enforcement. Still, the Singapore Convention is a welcome marketing tool to promote the use of international mediation.
The 2019 Hague Judgments Convention is also considered a useful instrument, although it too is not yet sufficiently widespread. It is currently ratified by Ukraine and acceded by the European Union, coming into force on 1 November 2023. It should be noted that the New York Convention took some time before becoming the most widespread international convention worldwide.
While the UK has signed the Singapore Convention relatively quickly, it has yet to sign or ratify the Hague Convention (a Government consultation on whether the UK should sign and ratify the Convention closed on 9 February 2023). The EU acceded to the Hague Convention relatively quickly. Yet, it neither signed nor ratified the Singapore Convention. One might infer that the EU is pushing to support judiciary methods to resolve disputes while the UK seems keener to support private, more flexible methods.
The two instruments, the 1958 New York Convention and the 2019 SCM may interplay when multi-tier clauses on methods to resolve disputes operate or when there are:
However, areas might exist where the two conventions do not complement each other.
The decisions of the international courts fall within the scope of the Hague Convention. The international courts, which compete with international arbitration, may progressively increase the number of administered cases if the Hague Convention is ratified by more countries in the future.
The decision of a dispute board does not fall within the scope of any of the aforementioned conventions.
The decision stemming from an Investor-State dispute would fall within the Singapore Convention.
Even in an international contract, a large company may prefer to use a state court if the amount in dispute is low.
All methods have their downsides. However, rephrasing a famous quote from Winston Churchill, it could be said that international arbitration is “the worst form of dispute settlement except for all those other forms that have been tried from time to time”. That is due to the support given by the NY Convention and the UNCITRAL Model Law, two sources that, at present, are not found, to the same or similar extent, in international litigation and mediation.
For complex international disputes, mediation is an excellent tool, subject to the occurrence of the typical requirement that a settlement agreement resulting from mediation is spontaneously executed and does not need any legal instruments to be enforced. The success of the 2019 Singapore Convention is growing, and over a few years, it may be the instrument that enhances the use of international mediation.
State courts may struggle to manage a complex international dispute. This could lead to the conclusion that they should not be used in such circumstances. However, it must be recognised that in most international contracts, the selected method to resolve any disputes remains the state court. Hence, it should also be accepted that the operators prefer state courts to arbitration. Provided that, currently, it is often very troublesome to enforce a state court’s decision abroad, the 2019 Hague Convention will be crucial to make a state court’s international litigation efficient in terms of its outcome.
Although it is well known that a multi-tier clause on the resolution of disputes could include, in broad terms, mediation plus arbitration or mediation plus litigation, some cases were discussed at the Conference where these three tools may interplay: mediation, arbitration and litigation.
The Ciarb Europe Branch 2023 Annual Conference was held on 21-22 April 2023 in Venice, Italy. The Branch thanks all of the speakers, delegates, sponsors and organisers for a successful and insightful Conference.
About the author:
Jacopo Monaci Naldini LLM FCIArb is Chair of Ciarb European Branch and a qualified lawyer. He obtained an LL.M. from University College of London, is a Fellow of the Ciarb and a member of its Faculty. Jacopo deals with international transactions and disputes, focusing on industrial sectors such as energy, oil and gas, and real estate. He is the regional representative of the Italian Chamber of International Lawyers and a member of ArbIt, CEA, DRBF, SCL, and AIA. Jacopo is based in Florence, Italy.
 To date (July 2023), 56 countries have signed the Singapore Convention on Mediation and 11 countries have ratified it.
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