Med-arb or Arb-med: Ethical and practical considerations for single neutrals

1. Donna Ross
September 8, 2015
MED-ARB OR ARB-MED:
ETHICAL AND PRACTICAL
CONSIDERATIONS
FOR SINGLE NEUTRALS

2. TERMINOLOGY
• ADR
• Alternative Dispute Resolution
• Amicable Dispute Resolution.
• More common to hear Arbitration and ADR.
• Med-Arbiter or Med-Arbitrator or Mediator-Arbitrator

3. DEFINITIONS
• Mediation
• Voluntary
• Parties Control the Process
• Main Types of Mediation
• Facilitative
• Evaluative
• Transformative

4. DEFINITIONS
• Conciliation
• Statutory
• Civil Law Countries
• Arbitration
• Determinative
• Binding – Private judge
• Enforceable as judgment
• (Internationally under New York Convention)

5. ICC STEP CLAUSE
• Any and all disputes arising out of or related to this Agreement, the
arbitrability thereof and/or to the relationship between the parties,
shall be finally settled under the Rules of Arbitration of the
International Chamber of Commerce by a sole arbitrator appointed in
accordance with said Rules. The place of arbitration shall be Paris,
France and the language of the arbitration French.
• In the event of any such dispute, the parties shall first submit the
matter to settlement proceedings under the ICC ADR Rules. If the
dispute has not been settled pursuant to the said Rules within forty-
five (45) days following the filing of a Request for ADR or within such
other period as the parties may agree in writing, such dispute shall be
finally settled as set forth in this paragraph.
• It is the intent of the Parties that, barring extraordinary
circumstances, arbitration proceedings will be concluded within ninety
(90) days from the date of the arbitrator's appointment. Each party
shall pay its own attorney’s fees, expenses and costs.

6. THE MAIN HYBRID PROCESSES
• Med-Arb
• First the parties mediate.
• Whatever issues aren’t resolved will be determined by arbitration.
• Arb-Med
• An arbitration is conducted and the award drafted.
• Then the parties mediate, and either settle on their own or the
award resolves their dispute.
• Arb-Med-Arb
• Used primarily to enable a consent award in the Med-Arb scenario.

7. VARIATIONS ON A HYBRID THEME
Early Neutral Evaluation
Mini-trials
Summary Trials
Expert Determination
Executive Appraisal
Private Judging
Adjudication
Dispute Review Boards
Early Case Evaluation
Case Management
Pendulum Arbitration
Arbitration (Bracketed, Last
Offer, Final Offer, Bifurcated
FOA, Baseball, Night Baseball,
Non-binding)
Eval-Med-arb
Co-Med-arb
Braided Med-arb
MEDALOA
Shadow Mediation
Mediation Assisted Settlement
Mediator’s Proposal

8. INTERNATIONAL AND DOMESTIC USE
Institutions
• ICC ICDR CEDR SIAC HKIAC WIPO CPR JAMS CIArb
• “unless otherwise agreed by the parties”.
• More frequently, an “Opt-In” process.

9. INTERNATIONAL AND DOMESTIC USE
Countries
Asia
• China Japan India Bangladesh Hong Kong Singapore
Other civil law countries
• Germany Switzerland Austria Sweden Italy Brazil Chile
• Common law countries
• US Canada UK South Africa Australia
• Domestically
• Labor/Employment Family Will Contests

10. INTERNATIONAL AND DOMESTIC USE
Australia
• CAA NSW Article 27D
• (3) Mediation proceedings in relation to a dispute terminate if:
• (b) withdrawal of consent by party
• (c) withdrawal of consent by the arbitrator
• (4) without the written consent
• (7) the med- arbitrator must disclose to all other parties f the
information the arbitrator considers material to the arbitration
proceedings.
• IAA –does not allow for Med-Arb.
• Section 23D(4) only deals with confidential information.

11. • Efficiency
Cost and Time
• Flexibility
Party Control, Relationship Preservation
• Finality
Arbitral Award
ADVANTAGES

12. • MSAs - Mediated Settlement Agreements
• In most countries, only enforceable as contracts
Europe: EU Directive 2008/52/EC
• Initiative for a “New York Convention” for MSAs
• Consent Awards
• Enforceable under the New York Convention, the rules of
major arbitral institutions, Model Law Article 31
Some jurisdictions the tribunal must be constituted before the
mediation.
ADVANTAGES

13. RISKS
• Challenges to Enforceability
• Bias/Lack of Impartiality
• Coercion of Parties
• Breach of Confidentiality
• Non-Compliance with Rules or Laws
• The main culprit:
Caucussing or Private Sessions

14. SAFEGUARDS
• Choice of neutral
• Trust
• Skill set/expertise
• Impartiality
• Rules and Laws that Govern the Process
• Institutional
• General – UNCITRAL Model Law
• Local – Law of the Seat or Place of Enforcement
• Adopt IBA Guidelines?
• Professional/Ethical Rules

15. SAFEGUARDS
• Process Design and Conduct
• Pre-Mediation or Arbitration Conference
• Ensure Parties’ Understanding – not just Counsel
• Med/Arb agreement/Procedural Order/Terms of
Reference
• Set forth detailed process
• Clear Delineation Between Mediation and Arbitration
• Caucussing or Not?
• If so, disclose or disregard information?

16. SAFEGUARDS
• Process Design and Conduct
• Consent, Consent, Consent
• Clear, Informed and Written
• Waiver
• Waive right to challenge the award
• Opt-out
• For Parties
• For Neutrals

17. SAFEGUARDS
Reasoned Award
• Based only on facts and law submitted during the arbitration phase.
• Use of information learned during mediation could expose the
award to vacatur, even if the parties consent in some jurisdictions.
• Include description of process, consent and waivers in the award.
• Include issues agreed by the parties during the mediation phase
(partial consent award).
Consent Award
• If mediation is successful memorialize the agreement in an
award rather than an MSA.

18. MED-ARB OR ARB-MED:
ETHICAL AND PRACTICAL
CONSIDERATIONS
FOR SINGLE NEUTRALS
THANK YOU FOR YOUR ATTENTION