Comments by the secretariat of UNCITRAL on the draft decree on commercial mediation proposed by the government of vietnam

25 June 2015 Comments by the Secretariat of UNCITRAL on the draft Decree on Commercial Mediation proposed by the Government of Vietnam We are grateful for the opportunity to provide comments on the draft Decree on Commercial Mediation (“draft Decree”) Indeed, UNCITRAL has adopted in 2002 a Model Law on International Commercial Conciliation (“Model Law”) and the scope of the two texts is similar The initiative of preparing the draft Decree is welcome, as mediation is being increasingly used in dispute settlement practice in various parts of the world Legislation on mediation is useful to encourage the development of mediation and ensure that it becomes a dispute resolution option preferred and promoted by government agencies, as well as in community and commercial spheres The Model Law was conceived as an effective tool for States to modernize their legislation It is a short text, which provides for default rules on the mediation procedure It does not address questions of accreditation of mediators, or mediation service providers, which are matters better organized at the level of the States Therefore, the comments of the UNCITRAL Secretariat will be limited to the sections of the draft Decree addressing the mediation procedure The draft Decree reflects the important principle that mediation is a fully consensual process, and that the parties are free to determine the most appropriate procedure It could provide a good basis for development of mediation in Vietnam There are, however, a few matter highlighted below that would require careful consideration The UNCITRAL Secretariat stands ready to provide further clarification as may be required Structure of the draft Decree Regarding the structure of the draft Decree, it may be advisable to place chapter IV after chapter II, so that (1) the main principles on mediation (chapter I), commercial mediators (chapter II) and the mediation procedure (chapter IV) could form a first part of the Decree addressing the mediation procedure, and (2) service providers (chapter III), foreign organizations (chapter IV) and State management (Chapter V) could form a second part of the Decree addressing the institutional framework for mediation In terms of substance, there are important provisions that are missing in the draft Decree Those provisions are the following Missing provisions: Article 1(3) of the Model Law on definitions could be included under chapter I of the draft Decree, as follows: “‘Mediation’ means a process whereby parties request a commercial mediator to assist them in their attempt to reach an amicable settlement of their dispute arising out of or relating to a contractual or other legal relationship The commercial mediator does not have the authority to impose upon the parties a solution to the dispute.” Such a provision would clarify the scope of the draft Decree The provision that the commercial mediator does not have the authority to impose upon the parties a solution to the dispute is a key feature of mediation That provision would be a useful addition that would permit to differentiate arbitration from mediation Article of the Model Law on the commencement of conciliation proceedings provides that : “ Conciliation proceedings in respect of a dispute that has arisen commence on the day on which the parties to that dispute agree to engage in conciliation proceedings If a party that invited another party to conciliate does not receive an acceptance of the invitation within thirty days from the day on which the invitation was sent, or within such other period of time as specified in the invitation, the party may elect to treat this as a rejection of the invitation to conciliate.” It is recommended to add a provision on the date of commencement of the mediation proceedings because deadlines may start running from that date That provision would be used in the event the parties did not agree on the matter It could be added in chapter IV of the draft Decree 10 Article 10 of the Model Law on admissibility of evidence in other proceedings reads as follows: “1 A party to the conciliation proceedings, the conciliator and any third person, including those involved in the administration of the conciliation proceedings, shall not in arbitral, judicial or similar proceedings rely on, introduce as evidence or give testimony or evidence regarding any of the following: (a) An invitation by a party to engage in conciliation proceedings or the fact that a party was willing to participate in conciliation proceedings; (b) Views expressed or suggestions made by a party in the conciliation in respect of a possible settlement of the dispute; (c) Statements or admissions made by a party in the course of the conciliation proceedings; (d) Proposals made by the conciliator; (e) The fact that a party had indicated its willingness to accept a proposal for settlement made by the conciliator; (f) A document prepared solely for purposes of the conciliation proceedings Paragraph of this article applies irrespective of the form of the information or evidence referred to therein The disclosure of the information referred to in paragraph of this article shall not be ordered by an arbitral tribunal, court or other competent governmental authority and, if such information is offered as evidence in contravention of paragraph of this article, that evidence shall be treated as inadmissible Nevertheless, such information may be disclosed or admitted in evidence to the extent required under the law or for the purposes of implementation or enforcement of a settlement agreement The provisions of paragraphs 1, and of this article apply whether or not the arbitral, judicial or similar proceedings relate to the dispute that is or was the subject matter of the conciliation proceedings Subject to the limitations of paragraph of this article, evidence that is otherwise admissible in arbitral or judicial or similar proceedings does not become inadmissible as a consequence of having been used in a conciliation.” 11 Article 10 aims at preventing the use of certain information in subsequent judicial or arbitral proceedings It provides for two results with respect to the admissibility of evidence in other proceedings: an obligation on the parties not to rely on the types of evidence specified in article 10 and an obligation of courts to treat such evidence as inadmissible 12 It is crucial to include in a legislative text on mediation provisions modelled on article 10 for the following reasons In mediation proceedings, the parties may typically express suggestions and views regarding proposals for a possible settlement, make admissions or indicate their willingness to settle If, despite such efforts, the mediation does not result in a settlement and a party initiates judicial or arbitral proceedings, those views, suggestions, admissions or indications of willingness to settle might be used to the detriment of the party who made them That risk may discourage parties from actively trying to reach a settlement during mediation proceedings Thus, article 10 is designed to encourage frank and candid discussions in mediation by prohibiting the use of information listed in paragraph in any later proceedings Article-by-article comments: Chapter - General provisions Article - Principles of dispute settlement by commercial mediation 13 Paragraph of article could more clearly provide for the freedom of parties to agree on the mediation procedure, and a first sentence, modelled on article 6(1) of the Model Law could be added as follows: “The parties are free to agree, by reference to a set of rules or otherwise, on the manner in which the conciliation is to be conducted Commercial mediators shall respect ( ) social ethics.” 14 It could be complemented by a provision on the manner in which mediation would be conducted if there is no agreement between the parties For instance, article 4(1) could be complemented by the following provision: “Failing agreement on the manner in which the mediation is to be conducted, the commercial mediators may conduct the mediation proceedings in such a manner as they considers appropriate, taking into account the circumstances of the case, any wishes that the parties may express and the need for a speedy settlement of the dispute.” That matter is addressed in article 20(1) of the draft Decree, but may deserve a clarification under article Missing principle in article 4: 15 It could be added in article that “the commercial mediator may, at any stage of the conciliation proceedings, make proposals for a settlement of the dispute.” This is an important clarification, and a feature that distinguishes arbitration from mediation This would complement the principle contained in article that the parties may settle the dispute at any time Chapter II - Commercial mediators Article - Making a list of commercial mediators, registration for conducting ad hoc commercial mediation 16 The provisions of article 9.2 are problematic for international commercial mediation, as they would prevent a party to choose a foreign commercial mediator We would like to suggest that specific provisions be added to address that situation Article 10 - Rights and obligations of commercial mediators 17 Article 10 addresses important aspects of the mediation procedure, including confidentiality It is advisable to complement the provision on confidentiality by a provision on non-disclosure of information, as follows: “When the commercial mediator receives information concerning the dispute from a party, he or she may disclose the substance of that information to any other party to the mediation However, when a party gives any information to the commercial mediator, subject to a specific condition that it be kept confidential, that information shall not be disclosed to any other party to the mediation.” Chapter IV - Sequences and procedures for commercial mediation Article 23 - Choosing of commercial mediators 18 It would be useful to clarify that “There shall be one commercial mediator, unless the parties agree that there shall be two or more commercial mediator The parties shall endeavour to reach agreement on a commercial mediator or commercial mediators, unless a different procedure for their appointment has been agreed upon.” Article 28 - Unsuccessful mediation 19 The provision that “the parties shall be entitled to request the continuation of mediation”, should be clarified It is uncertain under that provision who decides As it is important that mediation remains a consensual process, it would be preferable to provide that “all the parties shall agree to continue the mediation”  ... upon the parties a solution to the dispute.” Such a provision would clarify the scope of the draft Decree The provision that the commercial mediator does not have the authority to impose upon the. .. or suggestions made by a party in the conciliation in respect of a possible settlement of the dispute; (c) Statements or admissions made by a party in the course of the conciliation proceedings;... advisable to complement the provision on confidentiality by a provision on non-disclosure of information, as follows: “When the commercial mediator receives information concerning the dispute from a