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.2 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,3 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.4 In the

complex world of ADR, more parties to international commercial disputes are

interested in mediation before arbitration to resolve their affairs.5 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.6 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.7

 

 

Absent a designation as an arbitral award, an MSA must meet the formalities

and substantive elements of a contract in order to be enforceable.8 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.9 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.10

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