Success rates of mediation typically exceed seventy percent, sometimes reaching eighty percent or more. Arbitration clauses increasingly require a mediation to be conducted as a preliminary step prior to arbitration. Medarb clauses are increasingly frequent, and it is probable that they will become generalized.
If nearly all disputes have to go through a preliminary mediation, the number of arbitration cases may be substantially reduced. It remains to be seen, however, whether the success rate of mediation will remain as high if nearly all arbitration cases go first to mediation, including those that are arguably harder to mediate.
In any event, it follows from this evolution that one needs to deal not only with arbitration law, but also with medarb law.
Switzerland's tradition of mediating arbitration cases is reflected in her statutes, court decisions and practice. The practice is evidenced by a relatively large number of arbitrators and counsel having dual skills, as a result of the tradition of conciliating or mediating court cases. One example that has influenced Swiss lawyers is the highly successful "report hearing" where the commercial court (in Zurich) expresses a preliminary view after a first set of submissions, so that the parties can then be guided by this view to settle the case (if the view appears sound) or to pursue the case (if the court's preliminary view appears likely to be changed through supplementing the court's information).
Mediation rules that can be combined with arbitration in a medarb clause include those of the WIPO Mediation Center in Geneva (http://www.wipo.int/amc/en/mediation/index.html). Also in Geneva, for instance, the Chamber of Commerce administers mediation and arbitration cases (http://www.ccig.ch/pages/arbitrage.asp?lang=en) under uniform rules adopted by the main Swiss chambers of commerce for mediation ( https://www.sccam.org/sm/en/index.php) and arbitration (http://www.swissarbitration.ch/).
The law of medarb still needs development, for instance where the same person is acting as mediator and arbitrator (independence, waiver, due process). However, the Swiss Supreme Court's practice is generally to make up for the scarcity of its decisions reviewing international arbitral awards (typically 12 to 15 each year) by including ample didactic obiter dicta whenever the opportunity arises to clarify the law.
One can predict that the Court will follow its usual pragmatic approach to solving international arbitration issues. In particular, the Court is likely to be broad minded about issue conflict, as it has already made clear that an arbitrator will have lost the independence required only if she has stated a clear and irrevocable view as to the legal consequences of the concrete fact situation at hand.
Regarding the enforcement of medarb clauses, there seems to be little doubt that the Court will enforce medarb clauses strictly as agreed (see our last article posted here). Generally, when faced with agreed pre-arbitration time limits or conditions, the Court has enforced them strictly according to the parties' intent. The ball is therefore in the camp of those drafting arbitration clauses: if they wish to include a mandatory mediation prior to arbitration they should so state clearly. Providing a time limit for the mediation, before arbitration may be commenced, is helpful in that sense.
The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.
