The United Nations Commission on International Trade Law’s (“UNCITRAL”) Working Group II approved final drafts for a Convention on the Enforcement of Mediation Settlement Agreements (hereinafter “the draft Convention”) and for a Model Law on International Commercial Mediation and International Settlement Agreements Resulting from Mediation (hereinafter “the Mediation Model Law”). While these instruments need to be adopted and ratified by States, they may one day strengthen the role of mediation as an alternative to arbitration for international commercial dispute resolution.
Mediation has gained increasing popularity among corporate counsel, who have sought mediation as an alternative means of resolving international disputes to arbitration, which has been criticized for being “too expensive” and “taking too long”. However, one of the biggest downsides of mediation, until now, is that there was no mechanism for the enforcement of international settlement agreements. Once settlement is reached and both parties sign an agreement, if one party later violates the mediated agreement, the other party will have to initiate a cause of action for a breach of contract claim in domestic courts or through arbitration, with its inherent costs and delays.
Thus, these two documents attempt to create “a framework for international settlement agreements resulting from mediation that is acceptable to States with different legal, social and economic systems”, similar to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (“New York Convention”).
The Draft Convention
The draft Convention applies to all international agreements resulting from mediation and concluded in writing by parties to resolve commercial disputes. Excluded from the scope of application of the draft Convention are settlement agreements a) arising out of transactions for personal, family or household purposes, relating to family or inheritance matters, or arising out of employment law issues, as well as b) settlement agreements that are approved by a court or have been concluded in the course of proceedings before a court, or those that have been recorded and are enforceable as arbitral awards.
As General Principles, each Party to the draft Convention shall enforce international settlement agreements resulting from mediation in accordance with its rules of procedure and under the conditions laid down in this Convention and if a dispute arises concerning a matter that has already been resolved by a settlement, a Party may invoke that settlement agreement, in accordance with those same rules of procedure and conditions, in order to prove that the matter has already been resolved.
The draft Convention requires that a party relying on the mediated settlement agreement will need to supply the competent authority of a Contracting State with the signed settlement agreement and with evidence that the agreement was the result of international mediation and complies with the requirements of the draft Convention.
Like the New York Convention, the draft Convention and Mediation Model Law set forth a list of comprehensive situations based on which the competent authority can refuse to grant relief. The list includes grounds that are factual and depend on the manner in which the settlement agreement was created or drafted, and requires that the party against whom the settlement agreement is sought to be enforced provides proof that:
- (a) a party to the settlement agreement was under some incapacity;
- (b) the settlement agreement sought to be relied upon (i) is null and void, inoperative or incapable of being performed under the law to which the parties have validly subjected it or, failing any indication thereon, under the law deemed applicable by the competent authority of the Party to the Convention where relief is sought; (ii) is not binding, or is not final, according to its terms; or (iii) has been subsequently modified;
- (c) the obligations in the settlement agreement (i) have been performed; or (ii) are not clear or comprehensible.
- (d) granting relief would be contrary to the terms of the settlement agreement;
- (e) there was a serious breach by the mediator of standards applicable to the mediator or the mediation without which breach that party would not have entered into the settlement agreement; or
- (f) there was a failure by the mediator to disclose to the parties circumstances that raise justifiable doubts as to the mediator’s impartiality or independence and such failure to disclose had a material impact or undue influence on a party without which failure that party would not have entered into the settlement agreement.
In addition, two other grounds may be invoked by the competent authority of the Contracting State where the agreement is sought to be enforced, which may refuse to grant relief if it finds that granting relief under the agreement would be incompatible with the public policy of the Contracting State, or if the subject matter of the dispute is not capable of settlement by mediation under the domestic law of that Contracting State.
The draft Convention allows Contracting States to make certain reservations or later withdraw from the convention by a formal written notification.
The Draft Mediation Model Law
The draft of the Mediation Model Law consists essentially in the adaptation of the existing Model Law to the draft Convention, with the inclusion of a Section 3 – International Settlement Agreements, as well as the inclusion in its scope of application international settlement agreements (Article 1) and the substitution of the term “conciliation” with “mediation”. 
One issue extensively debated by Working Group II was the “Internationality” of the mediation and of settlement agreements. The Working Group considered whether the internationality of a settlement agreement should be assessed at the time of the conclusion of the agreement to mediate or at the time of the conclusion of the settlement agreement, as set forth in Article 1 of the draft Convention.
The Working Group noted that the internationality of the settlement agreement at the time of its conclusion (i) would be more in line with the approach of the draft Convention, (ii) would cater for situations where there might not be an agreement to mediate between the parties and (iii) that assessment of internationality as provided for in article 16(4)(b), referring to the obligations of the parties under the settlement agreement, would not be feasible at the time of the conclusion of the agreement to mediate as the place of performance of such obligation would not be known at that time. Contrary to this solution, it was pointed out that (i) parties to international mediation might expect the settlement agreement resulting from that process to be subject to enforcement under section 3 of the Mediation Model Law and, thus, it might be unadvisable to entirely disconnect the internationality of the settlement agreement from the mediation process itself and that (ii) referring to the agreement to mediate would also make it possible to determine the applicability of the law at the time the mediation was initiated, thereby providing more legal certainty to the parties.
After discussion, Working Group II decided to include a footnote to Article 16(4)(b), incorporating the possibility that a “State may consider broadening the definition of ‘international’ settlement agreement by adding the following subparagraph to paragraph 4: ‘A settlement agreement is ‘international’ if it results from international mediation as defined in article 3, paragraphs 2, 3 and 4.’”
The approval of these instruments will undoubtedly add credibility and awareness to international commercial mediation. The creation of a harmonious enforcement process for settlement agreements achieved through international mediation should benefit and place mediation as a real alternative method of international dispute resolution.
Ana Constantino, Aceris Law LLC
 Draft Convention on the Enforcement of Mediation Settlement Agreements, Preamble (Uncitral document A/CN.9/942).
 Draft Convention on the Enforcement of Mediation Settlement Agreements, Article 1, paras. 2 and 3 (Uncitral document A/CN.9/942).
 Draft Convention on the Enforcement of Mediation Settlement Agreements, Article 3 (Uncitral document A/CN.9/942).
 Draft Convention on the Enforcement of Mediation Settlement Agreements, Article 4 (Uncitral document A/CN.9/942).
 Draft Convention on the Enforcement of Mediation Settlement Agreements, Article 5 (Uncitral document A/CN.9/942).
 Draft Convention on the Enforcement of Mediation Settlement Agreements, Article 8 (Uncitral document A/CN.9/942).
 See footnote 2 of the Draft Mediation Model Law (Uncitral document A/CN.9/943): “In its previously adopted texts and relevant documents, UNCITRAL used the term “conciliation” with the understanding that the terms “conciliation” and “mediation” were interchangeable. In preparing this Model Law, the Commission decided to use the term “mediation” instead in an effort to adapt to the actual and practical use of the terms and with the expectation that this change will facilitate the promotion and heighten the visibility of the Model Law. This change i n terminology does not have any substantive or conceptual implications.”
 Report of Working Group II (Dispute Settlement) (Uncitral document A/CN.9/934).
 Report of Working Group II (Dispute Settlement) (Uncitral document A/CN.9/934), p. 18.