Mediation in Focus
Reactions to SIDRA’s International Dispute Resolution Survey
The Singapore International Dispute Resolution Academy (SIDRA) launched its second International Dispute Resolution Survey: Final Report in August 2022 (Final Report 2022). The Final Report 2022 continues SIDRA’s global study into how users of dispute resolution mechanisms, including businesses and their legal representatives, make decisions about resolving cross-border disputes. Specifically, the Report looks at the factors that influence client users and external counsels in choosing whether to litigate, mediate or arbitrate their disputes. The Report also seeks to understand what users consider when choosing an international dispute resolution institution and/or dispute resolution professional (arbitrator or mediator) and their satisfaction with their respective choices.
This series of articles seeks to understand the perspectives of international dispute resolution institutions in Singapore – the Singapore International Arbitration Centre, Singapore International Mediation Centre and Singapore International Commercial Court – regarding the trends in international arbitration, mediation and litigation encapsulated in the 2022 Final Report. The article draws from interviews with representatives of the aforementioned dispute resolution institutions.
International dispute resolution systems have changed and grown over the last few years. These systems continue to evolve rapidly. To understand these changes and map the state of international dispute resolution practice, the Singapore International Dispute Resolution Academy (SIDRA), a research centre that focuses on international dispute resolution theory, practice, and policy, has released the findings of its second International Dispute Resolution Survey encompassing litigation, arbitration, mediation, mixed mode (hybrid), and investor-state dispute resolution mechanisms. The SIDRA Survey enquires into how users of these dispute resolution mechanisms, including businesses and their legal representatives, make decisions about resolving cross-border disputes.
This three-part series of articles shares the perspectives and reactions to the Survey findings of three international dispute resolution institutions based in Singapore – the Singapore International Mediation Centre, the Singapore International Arbitration Centre, and the Singapore International Commercial Court – regarding the trends in international commercial dispute resolution. We conducted qualitative interviews with these institutions to better understand the findings of the SIDRA Survey on international commercial mediation, arbitration, and litigation. In this first article, we focus on mediation – why parties opt to mediate their commercial disputes, how they choose their mediator, whether subject-matter expertise or process-based experience is important in choosing a mediator, and what role a mediation institution can play in this process. But first, we offer some background on the Survey itself.
The SIDRA Survey
The SIDRA Survey is commissioned by the Singapore Ministry of Law and is into its second iteration, with the first SIDRA Survey Report released in 2020. For the second iteration of the SIDRA Survey, Client Users (corporate executives or in-house counsel) and External Counsels (dispute resolution lawyers or corporate lawyers) who engaged in cross-border commercial dispute resolution and investor-state dispute settlement between 2019 and 2020 were invited to participate in the Survey. The second iteration of the SIDRA Survey had 181 responses from 25 countries, with 42.4 per cent of all respondents coming from Singapore. In August 2022, SIDRA issued the Final Report, detailing the findings of the Survey.
The SIDRA Survey is segmented into five sections: international commercial arbitration, international commercial mediation, international commercial litigation, mixed mode (hybrid) mechanisms, and investor-state dispute settlement. The SIDRA Survey also looks into the respondents’ choice of international commercial dispute resolution institution – their most commonly used international commercial mediation, arbitration, and litigation institutions, the factors driving their choice of institution, and satisfaction with such choice.
All respondents of the SIDRA Survey are actual users of cross-border commercial dispute resolution mechanisms or investor-state dispute settlement mechanisms. Views of neutrals, academics, institutional providers, and other non-user stakeholders are not represented in the Survey. Thus, the Survey is based on user experiences and not preferences.
To learn more about the current state of international commercial mediation, we spoke with Joon-Nie Lau, Deputy CEO, and Benatt Lee, Registrar of the Singapore International Mediation Centre (SIMC). The SIMC, an independent and not-for-profit organisation, is an institution geared towards providing case management services to support international commercial mediation. The SIMC is one of several mediation institutions frequently used by the respondents to both the SIDRA Survey Final Report 2022 and the SIDRA Survey Final Report 2020.
Why Parties Choose to Mediate Their Disputes
Respondents to the SIDRA Survey were asked about the factors that contributed to their choice to opt for international commercial mediation to resolve their disputes. The main influence on respondents’ choice to mediate was contractual obligation (67 per cent). Parties may have mandatory mediation clauses, mixed mode dispute resolution clauses, or mandatory mediation before arbitration in their contracts. Sixty-one (61) per cent of respondents noted that it was external counsel’s advice that influenced their choice to use mediation. Saving time and costs may be some of the reasons why external counsels would recommend mediation. With the Convention on International Settlement Agreements Resulting from Mediation or the Singapore Convention on Mediation, which facilitates enforcement of mediated settlement agreements for commercial disputes, coming into force, more counsel may be recommending mediation to their clients in the future.
The top factors that respondents to the SIDRA Survey consider in deciding to mediate their commercial disputes were preservation of business relationship (94 per cent) and confidentiality (89 per cent). This is unsurprising as mediation is known to be a confidential process that brings parties together to enable them to formulate creative solutions to their disputes. Seventy-eight (78) per cent of respondents were satisfied with how mediation facilitates the preservation of business relationships and 72 per cent were satisfied with confidentiality in mediation.
Choosing the Right Mediator
The role of a mediator in the success of the mediation process is key. In Registrar Lee’s view, while parties’ inclination to settle the matter amicably is critical, the second most important factor for a mediation to be successful is having the right mediator for the job. The skills of a mediator and their ability to bring parties together is extremally important.
Choice of mediator and the so-called “reluctant mediator”
Deputy CEO Lau and Register Lee shared that counsel advice plays an important role in mediation. Importance of counsel advice in matters related to mediation concurs with the general findings of the SIDRA Survey Final Report 2022, with 61 per cent of respondents indicating “external counsel advice” as one of the key influences that contributed to their choice of mediation as a dispute resolution mechanism.
In the SIMC’s experience, most parties would, on approaching the SIMC with a matter, already have chosen as their mediator a person based on the recommendation of counsel or a person they are familiar with. In practice, the SIMC has come across a few cases where another mediator might have been more suitable. In some cases, even the parties’ chosen mediators have indicated to SIMC, post-mediation, that they might not have been the best person to mediate a given case, even though they had accepted to act as mediators. The issue of this so-called “reluctant mediator” is becoming increasingly apparent. The mediator that is not entirely at ease with acting in this role might not be the most effective for the parties. Therefore, ensuring that not just the parties, but also the mediators, are comfortable with their choice is crucial.
Industry/issue-specific knowledge v. dispute resolution experience in mediation
Majority of the respondents find dispute resolution experience (94 per cent) and industry/issue-specific knowledge or subject-matter expertise (89 per cent) to be crucial in choosing a mediator. But their satisfaction with these two factors differs. Seventy-two (72) per cent of respondents were satisfied with the dispute resolution experience of mediators while 56 per cent were satisfied with the industry/issue-specific knowledge of the mediators. There is an ongoing debate in the professional mediation community about whether mediators’ expertise should be more process-related or subject matter-related. SIMC Registrar Lee agrees that having industry/issue-specific knowledge is important for certain disputes where technical aspects are at issue. Parties to an investment-related, intellectual property or maritime dispute might need a mediator with expertise in those areas. At the same time, the Registrar believes that subject-matter expertise “may not be as critical as in arbitration”. In his view it is important to choose a mediator that possesses process-related mediation skills, that is, someone who is able to identify the parties’ differences and recognise their interests, rather than focusing on their legal rights. Having a mediator with extensive industry/issue-specific knowledge, according to the Registrar, is “not the key requirement or determining factor as to whether a mediation is successful or not”. After all, it is not the mediators’ job to decide who is right or wrong or to issue any form of legal determination or advice.
How can mediation institutions help in choosing the right mediator?
Mediation institutions respect the choice of the parties in appointing their mediator. It is not the institution’s place to opine on the suitability of the parties’ chosen mediator or propose another candidate for the job. However, institutions can play an important role in helping parties and their counsel in the process of choosing the right mediator for their disputes, where such help is requested. The Deputy CEO and the Registrar believe that mediation institutions should know their mediators well. This applies not only to the names in their respective mediation panels but also to the mediators who are appointed from outside the institutions’ panels. The SIMC devotes significant resources to this important task. In addition to collecting and processing information on various mediator candidates, the SIMC makes sure that there is a designated SIMC employee sitting in on select mediations administered by the Centre, especially where the mediator is mediating at the Centre for the first time. The is one way for the SIMC to effectively see the mediators in action, to observe the way they handle the disputing parties, their style and skill set, and understand the depth of their subject-matter expertise. The Registrar himself sits in on many of these mediations for this purpose. The SIMC also collects feedback from the parties and their counsel, on various aspects of the mediation, including on the mediators’ performance. This feedback is later shared with mediators, so that they can embrace positive comments but also understand areas for improvement. Such feedback is critical in helping mediators to improve their performance and grow as professionals.
The SIMC has accumulated important insights that they can share with the parties and their counsel to help them choose the best mediator for their respective matters. The SIMC has administered mediations on diverse matters, from disputes in traditional industries to those in new fields, such as those related to crypto-assets. The Centre is also known for its diverse panel of mediators and connectedness with other institutions. The SIMC has protocols in place with the Singapore International Commercial Court and the Singapore International Arbitration Centre for litigation-mediation-litigation and arbitration-mediation-arbitration processes respectively. The SIMC also has cooperation protocols with institutions outside of Singapore, such as the Shenzhen Court of International Arbitration and the Japan International Mediation Centre. In practice, however, the resources and expertise of mediation institutions are highly underutilised; parties and their counsel do not often consult mediation institutions to seek important insight into the different mediator profiles.
As the practice of international commercial mediation grows, parties and their counsel need to understand the importance of the role of their chosen mediator in facilitating the amicable settlement of disputes. Choice of mediator is one of the most important decisions in mediation and should not be taken lightly. Parties have found it important to look at the industry/issue-specific or subject-matter knowledge and dispute resolution experience of mediators. While subject-matter expertise is important in certain disputes, process-based experience of mediators, including their skills and styles, is equally important in mediation. Institutions can be of tremendous help to parties and their counsel in identifying the best mediator for their respective matters. SIMC Deputy CEO Lau and Registrar Lee believe that institutions can provide ample support to mediators and counsel, including training, to further develop the entire mediation ecosystem, achieve “higher level of sophistication in mediation” and hopefully, facilitate more settlements as a result.
As the SIDRA Survey gains further traction, we will continue to invite responses to our findings from international dispute resolution institutions to help our understanding of international dispute resolution practice as it develops.
SIDRA is currently running the third iteration of its International Dispute Resolution Survey. The 2023 SIDRA Survey is currently open for participation. It is you – users of international dispute settlement systems (mediation, arbitration, litigation, mixed mode (hybrid) mechanisms), who determine the outcome of the Survey; it is you whose voice is decisive in devising the most efficient and effective dispute resolution processes. Your contributions are highly valuable to us. You are invited to contribute to the ongoing SIDRA Survey, which you will find here.