ICDR Offers Concurrent Mediation/Arbitration Clause - Chapter 24 - AAA/ICDR Handbook on International Arbitration and ADR - 2nd Edition

Steven K. Andersen is Vice President of International Development of the American Arbitration Association’s international division the International Centre for Dispute Resolution. Since 2001 he has had direct responsibility for the organization’s activities, programs and developments including mediation in Canada, United States and the ICDR Mexico City office that opened in 2006. He has mediated numerous disputes and is a recent addition to the NAFTA 2022 committee. Please send any comments about this chapter to the author at andersens@adr.org.

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Mediation is said to be widely accepted by attorneys who counsel companies that engage in international commerce and the outside counsel they retain to represent them in connection with disputes.1 Yet there appears to be a vast difference between the number of lawyers who advise clients concerning the benefits of mediation and those who actually mediate regularly. This disparity could be due in part to challenges encountered while negotiating an agreement to mediate. The challenging issue negotiators face is whether to agree to mediate before or after a dispute arises.

This chapter discusses a new clause developed by the International Centre for Dispute Resolution (ICDR) that makes it possible for parties to agree to mediate disputes at the same time that they agree to arbitrate. The new clause is not the same as the conventional “step” clause that is negotiated at the time of a deal. In the conventional clause, the parties agree to use one or more dispute resolution processes to resolve disputes that could arise out of, or in connection with, the transaction. The term “step” means that one process must be completed before the next one begins. Earlier steps call for one or more non-binding processes (e.g., mediation or negotiation) with the last step being a binding process (e.g., arbitration). The binding process is used only if earlier steps fail to produce a voluntary settlement.