Under the Convention, “mediation” means a process “whereby the parties attempt to reach an amicable settlement of their dispute with the assistance of a third person or persons lacking the authority to impose a solution upon [them]”. Provided certain conditions are satisfied (considered below), most agreements to resolve international commercial disputes resulting from a mediation, which are concluded in writing will be enforceable in the courts of any signatory state. However, the Convention does not spell out who qualifies as a mediator for this purpose.

Settlement agreements relating to family, inheritance or employment law or those where one party is a consumer are not covered by the Convention. In addition, the Convention will not apply to settlement agreements that have been approved by a court or concluded during court proceedings (and which are therefore already enforceable as a judgment) and to settlement agreements that have been recorded and are enforceable as an arbitral award.

Moreover, signatory states may declare that the Convention will not apply to public contracts involving the government or any of its agencies. Belarus and Iran have already made such a declaration. States may also stipulate that the parties to the settlement agreement to be enforced have to have agreed to the Convention’s application; Iran has again made a declaration to that effect.

First, the settlement agreement must have been concluded after the Convention entered into force for the state concerned, result from mediation (as defined above) and be concluded in writing, which may be electronically concluded.

Second, the dispute must be international in nature. This will be the case where:

• at least two parties to the settlement agreement have their places of business in different states, or
• where the state in which the parties have their places of business is different to the state in which the substantial part of the obligations under the settlement agreement is performed or the state with which the subject matter of the settlement agreement is most closely connected.

Third, parties applying to have their settlement agreement recognised under the Convention must supply a number of documents to the competent authority of the state in which they wish enforcement to take place, including the settlement agreement signed by the parties and the mediator and evidence that the settlement agreement had resulted from mediation, also signed by the mediator.

Commentators have noted that in some jurisdictions, mediators may be reluctant to sign the settlement agreement as to do so may be seen as endorsing an agreement in which the mediator is supposed to remain neutral, or that it may breach the mediator’s duty of confidentiality. The Convention therefore includes the possibility that a party may provide “any other evidence acceptable to the competent authority” to prove validity of the settlement agreement.

The competent authority may nevertheless refuse enforcement under the Convention. Grounds for refusal include that:

• a party to the settlement was under some form of incapacity;
• the settlement agreement is technically ineffective, is not binding or not final, or has been subsequently modified;
• the obligations in the settlement agreement have already been fulfilled or are not clear or comprehensible;
• granting relief would be contrary to the terms of the settlement agreement itself;
• 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;
• there was a failure by the mediator to disclose circumstances that raise justifiable doubts as to his or her impartiality or independence and that failure had a material impact or undue influence on a party which would not otherwise have entered into the settlement agreement;
• it would be contrary to the public policy of the state where enforcement is sought (for example, fulfilment of the underlying contract would amount to fraud or would be otherwise illegal);
• the subject matter of the dispute is not capable of settlement by mediation under the law of the state where enforcement is sought.

In practice, demonstrating the existence of a ground on which to challenge enforcement may be difficult. For example, there is no explanation or guidance of when a breach by a mediator will be “serious” enough to enable a party to argue it would not have entered the agreement but for the breach. Nor is any indication given in the Convention of what “standards” will be applicable to the mediator. There are no internationally accepted standards of conduct for mediators or mediations, and regulation is left to local law and practice. As will be seen from this Review of mediation practice across the globe, in many jurisdictions mediators must undergo training and be formally accredited. In others, mediators agree voluntarily to self-regulation. In yet others, however, there is no regulation at all. While doubtlessly most mediators conduct themselves to the highest principles, the lack of applicable standards could provide a basis for challenge. In addition, the process of challenging the enforcement of a settlement on the grounds of serious mediator misconduct or bias is likely to involve examination of the mediation process itself, displacing the fundamental confidentiality of that process.

While anything that encourages mediation has to be a good thing, the Convention is not a “quick fix” for mediation. Despite its laudable aims, uncertainty remains about how the Convention will operate in practice. There is currently substantial leeway both in how mediations are conducted and how settlements reached are later to be enforced. The text provides that signatory states will enforce settlement agreements in accordance with their own rules of procedure. Much will therefore depend on local implementation processes. For although a major benefit of mediation is its ability to find inventive solutions to disputes, if a court’s own rules of procedure do not permit the agreed solution, the agreement may not be enforced. The onus is likely to be on the parties to self-monitor compliance with their agreement while local courts determine how to approach new situations over time. Parties will still need to seek local advice on exactly how enforcement will take place in any given jurisdiction.