Authors: David Weiss* and Brian Hodgkinson**
Published: December 2014
Description:
I. INTRODUCTION
This article explores cross-border Mediation Settlement Agreements (“MSAs”) by reviewing national laws implemented to address the enforcement and recognition of such agreements.1 The authors hope to underscore the benefits of legislation that allows a cross-border MSA to be converted into an arbitration award. Such legislation would permit a mediator to adopt specific international dispute provisions, thereby enabling the mediator to become an arbitrator and to enter an MSA as an arbitral award. The authors refer to this process as “adoptive arbitration.” Adoptive arbitration would augment the enforceability of an MSA as an arbitration award in the transnational order, while still maintaining the essential characteristics of mediation, notably its confidentiality, voluntary nature, and non-litigious character. Adoptive arbitration grants fluidity and certainty to resolving international commercial disputes, and marks a jurisdiction providing the approach as an attractive forum for resolving these disputes.
II. CROSS-BORDER AGREEMENTS: ENFORCING AN MSA IN A FOREIGN JURISDICTION
Cross-border Alternative Dispute Resolution (“ADR”) is on the rise. In the complex world of ADR, more parties to international commercial disputes are interested in mediation before arbitration to resolve their affairs. Unfortunately, one of the perils of cross-border mediation is the enforcement and recognition of the written settlement agreement to the underlying commercial dispute. There is often a false assumption that notions of good faith will drive parties to respect mediated settlement agreements, and that failing such, the agreement will be upheld transnationally by a foreign court applying comity. However, issues arising from such assumptions often prove difficult to resolve. Although one objective of international law is the orderly, consistent, and final resolution of disputes, challenging or defending the enforcement of a cross-border mediation agreement is difficult because, unlike an arbitral award, it lacks the designation of a “final judgment” or “final award,” and consequently will often face greater scrutiny in the jurisdiction where enforcement is sought.
Absent a designation as an arbitral award, an MSA must meet the formalities and substantive elements of a contract in order to be enforceable. In the transnational context, however, different legal systems often have varying requirements for proper contract formation. For instance, in common-law systems the minimum requirements for the formation of a contract are offer, acceptance, and consideration. Attendant to these basic elements are more nuanced requirements such as the mutual “meeting of the minds,” which common-law courts look to as indicative of the parties’ intent to form a binding agreement. Moreover, and apart from the issue of whether a contract was actually formed, the recalcitrant party has defenses available under the common law, such as fraud, duress, and undue influence, which can be used to contest the agreement’s …
*David Weiss is currently a visiting Scholar and Co-Director of the new International Mediation Center at New Jersey City University, and an attorney focusing his legal practice in the area of Alternative Dispute Resolution. He is admitted to the bars of the State of New York, New Jersey and District of Columbia. He is also a court appointed mediator and arbitrator in New York.
**Brian Hodgkinson graduated from Touro Law Center in 2014, where he served on the Law Review’s editorial board.