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      Proskauer on International Litigation and Arbitration:
       Managing, Resolving, and Avoiding Cross-Border Business or Regulatory Disputes
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  1. Mediations (or conciliations, as they are frequently referred to internationally) are informal negotiations, conducted by a trained mediator. The proceedings are confidential, and the mediator does not have the authority to make binding decisions as to fact or law.
  2. While boasting an impressive settlement record in the United States domestically, mediation has not become as widely-used a technique for resolving international business disputes. Unfamiliarity might be one cause, but there are other practical obstacles where mediations are international.
  3. For instance, initiating a mediation session in an international context can be costly and burdensome, given the geographic distances and language barriers that might exist. Interpreters might be needed, adding additional costs to the mediation. Further, selecting a neutral mediator who is familiar with cross-cultural differences that might be contributing to the disagreement makes the selection process more difficult than in domestic disputes.
  4. However, the possibility for the parties to engage in a confidential and intensive settlement process that is overseen by someone who is not the ultimate decisionmaker can favor settlement. Also, mediations offer a forum to parties in which they can better understand the other side’s position, which may well lead to a resolution of the disagreement. The more relaxed and informal nature of a mediation may also favor the continuation of the business relationship between the parties. Finally, because mediations are non-binding, parties can simply walk away if they think no resolution will come from the proceeding.
  5. Parties interested in initiating an international mediation or conciliation have a host of choices available to them with regard to applicable rules. The list of institutional organizations that have developed rules governing mediations includes the International Chamber of Commerce (ICC), the American Arbitration Association (AAA), the Quebec National and International Commercial Arbitration Centre (QNICAC), and the Camara de Comercio de Santiago (Santiago Chamber of Commerce Arbitration and Mediation Center), to name a few.
  6. The ICC’s “ADR Rules” are the result of discussions between dispute resolution experts and representatives of the business community from seventy-five countries. These ADR Rules allow for the maximum amount of flexibility by the parties. For instance, parties to a dispute can choose the method of dispute resolution that is the most suitable to reaching a settlement; absent an agreement, though, the default method is mediation.
  7. Under the ADR Rules, the parties first select a “Neutral” to act as a facilitator in any negotiated settlement discussions. These discussions are non-binding and do not result in a decision or award that is enforceable at law. As such, the Neutral does not offer any opinion as to the merits of the dispute. However, the Neutral does offer (non-binding) opinions as to issues of fact, issues of law, issues concerning the application of the law to the facts, issues of contract interpretation, and the like.
  8. If the ADR proceeding does not succeed in resolving the dispute, the parties are free to refer it to arbitration.

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