ADR in Regional Level

This part is devoted to appreciate in a bit detail about the importance of ADR in regional institutes. Thus, the experience of European Union and North American Nations under NAFTA in the settlement of dispute is taken care of. Lastly, the African approach to ADR is considered though it is only in its infant stage of development. I put it in the last for we got many things that we should learn from the other two.

Europe

Access to justice is at the top of the political agenda in all Member States of the European Union. More and more disputes are being brought to court. As a result, this has brought not only longer waiting periods for disputes to be resolved but has pushed up legal costs to such levels as to often be disproportionate to the value of the dispute.

This is where ADRs come in. Alternative dispute resolution (ADR) methods are extra-judicial procedures used for resolving civil or commercial disputes. These usually involve the collaboration of disputing parties in finding a solution to their dispute with the help of a neutral third-party. As there are numerous types of ADR methods available, they can be applied and adapted to a variety of areas whether civil or commercial in nature.

The advent of the single European market has increased the movement of goods and of people across the European Union. Unfortunately, it also has increased the number of disputes involving nationals of different Member States. These cross-border disputes add another dimension of complexity to already complicated issues. In this context, ADRs are regarded as an important element in the attempt to provide fair and efficient dispute-resolution mechanisms at EU level.

In recent years, the use of ADRs has increased considerably in the European Union. They are being used to resolve disputes between citizens and administrations, within families, working relationships or yet again in commercial relations and consumer disputes.

At the European Council on Justice and Home Affairs that took place in Tampere (Finland) in October 1999, EU leaders drew attention to how much importance they place on the role of ADR in cross-border disputes. In March 2000 at the Lisbon Summit on employment and the information society, EU leaders asked the European Commission and the EU Council of Ministers to reflect upon ways of applying ADR methods to resolve conflicts in the area of e-commerce in view of promoting consumer confidence.

In the field of consumer disputes, ADR has become a special priority of the Commission. As such, it has adopted two recommendations on the subject:

• one on procedures involving a third party who proposes or imposes a solution (30 March 1998);
• another on procedures which are restricted to a single attempt to draw conflicting parties together to help them find a common solution (4 April 2001).

Furthermore, a network of national bodies (ECC-NET) was created to facilitate the task of finding extra-judicial solutions to cross-border consumer disputes. The European Commission has established to ADR related organisations:  The European Extra Judicial Network (“EEJ-Net”) and the Financial Services Complaints Network (“FIN-NET”) for matters relating to financial services. The Commission’s Green Paper says: “All political and legislative endeavours, initiatives and debates to date at national, Community and international level have been aimed at preserving the quality of ADRs in terms of accessibility, effectiveness and guarantees of good justice while maintaining their flexibility.”

The Commission has launched in April 2002 a Green Paper on ADR so as to initiate a constructive debate on a certain number of legal issues, which have been raised as regards alternative dispute resolution in civil and commercial law. The questions in the Green Paper relate to the essence of the various means of alternative dispute resolution such as clauses in contracts, limitation periods, confidentiality, the validity of consent given, the effectiveness of agreements generated by the process, the training of third parties, their accreditation and the rules governing their liability.

The Green Paper talks of certain non-determinative forms of ADR helping to achieve social harmony in that “the parties do not engage in confrontation but rather a process of rapprochement”. Well that is fine in my experience but, in reality, much mediation involves parties who have a considerable enmity towards one another. They may be engaging in the process for a whole variety of reasons - but the desire for non-confrontation and the achievement of rapprochement is often not at the forefront of their minds! They may be engaged in the ADR process because they are adopting a commercial “common sense” approach to the dispute. The dispute may already be subject to litigation with large costs already incurred and perhaps is approaching a lengthy and costly trial. Parties may be there because they have been advised to give the process a chance.

They may be there to elicit information. They may be there to give the impression of being reasonable. Whatever the reason or motivation for parties attending mediations or engaging in other forms of ADR, there is no doubt that it is becoming increasingly popular.

Commission Green Papers are documents intended to stimulate debate and launch a process of consultation at European level on a particular topic (such as social policy, the single currency, and telecommunications). These consultations may then lead to the publication of a White Paper, translating the conclusions of the debate into practical proposals for Community action.

Following this consultation period and based upon the contributions of the debate's participants, the Commission has decided (see the Commission Scoreboard on Justice and Home Affairs COM(2003) 291 final) to launch two initiatives:

• Work will start in 2003 to develop a European plan for best practice in mediation in 2004 a a European code of conduct has been launched.
• In 2004 the Commission is planning to present a proposal for a directive to promote mediation.

On 2 July 2004 a conference was held in Brussels to discuss self-regulatory initiatives for mediation in general and to launch the European code of conduct. The conference was attended by some 100 participants. The morning session saw a number of presentations on national experiences of self-regulation. The afternoon session was introduced by Mr Faull, Director General for DG Justice, Freedom and Security of the European Commission, and was followed by a panel debate on the European code of conduct.

The concept of a European code of conduct as a voluntary instrument to improve quality and trust in mediation was supported. It was generally considered that the code should remain an informal document at this stage and that it should not be adopted formally by any of the institutions of the European Union. It will be the responsibility of those individual mediators and organizations that wish to subscribe to the code to also take ownership of the code, including defining implementation mechanisms.

It was agreed that as a next step the code will be made available on the internet together with general information on the code and a first list of mediation organizations who have declared that they subscribe to the code.

As further follow-up the Commission services will consider organising ad hoc meetings with representatives of organisations subscribing to the code to review implementation and content as necessary.

Further large-scale meetings may also be organised on a yearly basis, open for all interested parties, to discuss specific issues of ADR in order to maintain dialogue and encourage exchange of experiences. The next meeting of that type could be held in 2005.

As to access to justice – this is a fundamental right as provided for by Article 6 of the European Convention on Human Rights and Fundamental Freedoms and the right to valid remedies has been decided as being a general principle of community law (Case 222/84 Johnston [1986] ECR 1651) and this is entrenched in Article 47 of the Charter of Fundamental Rights of the European Union.

Unfortunately with litigation and arbitration, access to justice is sometimes restricted due to the inability of a party to pay the costs involved and by reason of the restrictions of legal aid (not available at all in arbitration and frequently not granted or not adequate in civil litigation in the UK). So it has long been said with a certain irony that “Justice like the Ritz Hotel is open to all!” Perhaps ADR is an effective means of addressing that sorry state of affairs.

It is evident that the European Union is taking positive initiatives to facilitate access to justice through ADR. These initiatives are highlighted in the Green Paper on alternative dispute resolution in civil and commercial law presented by the Commission of the European Communities on 19^th February 2002. That paper states that ADR is an “integral part of the policies aimed at improving access to justice”.

In some Countries there is State funding for forms of ADR – for instance in France the justice conciliators are not paid by the parties and in Ireland the family mediation service’s operating costs are funded by the Government. In Sweden the office for damage attributable to road traffic has its operating costs covered by motor insurance companies and in the UK the costs of mediation may properly be claimed against the Legal Services Commission on the part of a legally aid party.

In seeking to harmonise legislation in Member States the Council of the EU in a draft directive (COM (2001) 13 final) has said “Legal aid shall be granted in cases where disputes are settled via extra-judicial procedures, if the law makes provision for such procedures or if the parties are ordered by the court to have recourse to them.” (Art 16).

ADR and its increasing deployment is a political priority within the European Union, particularly in relation to the resolution of disputes involving electronic commerce (note for instance the March 2000 Lisbon European Council).

Different member states not surprisingly approach ADR differently. Finland makes conciliation a pre-requisite to court action. In Germany judges are asked to support an amicable resolution through court proceedings. In France Article 21 of the Civil Code states that it is the duty of judges to reconcile the parties. In England the Civil Procedure Rules expressly encourage the use of ADR. Various member states have been testing different ADR procedures.

It suggests that it may be sensible to promote legislation extending the limitation periods to account for the period of mediation. The downside is that sometimes ADR fails to achieve a resolution and occasionally (though it is felt rarely) they fail because one party has not been acting in good faith in the process and may simply have been “buying time”. That represents a not insignificant risk and it might be considered that the automatic extension of limitation periods would be unfair in such circumstances. Furthermore the existence of time pressure is sometimes a positive benefit in ensuring that the ADR process reacts flexibly and speedily to the situation at hand and the very existence of time may occasionally be a real disincentive to settlement being achieved.

Confidentiality is a key to the success of ADR procedures whereas the trend with litigation is for openness (including public hearings). In a commercial context confidentiality as such has its benefits and its downsides. . It allows parties to settle matters outside the glare of publicity which may have adverse consequences on their reputations, goodwill, and even share prices. In fact mediation may take advantage of the leverage of publicity in litigation in the sense that parties will know that if the ADR processes fails, it may mean that everything in the dispute will come out into the open – that itself may be an incentive for the parties to make sure that the ADR process succeeds. On the other hand the existence of confidentiality sometimes encourages parties to take realistic positions, which they perhaps would be less willing to expose in a public area.

The bottom line is that ADR is succeeding in the UK and deserves to succeed across Europe but the word needs to be spread. Plainly there is a very favourable climate for ADR and mediation in particular within the European Union. Member States are taking their own initiatives. The commercial community once it has a sufficient experience of the ADR processes will naturally warm to them and at least see ADR as a sensible option for use before an costly “battle” takes place in litigation or arbitration (or at suitable times during the course of litigation or arbitration but before judgment is delivered). In England there is even a mediation scheme in respect of cases going to the Court of Appeal which have already been determined in the High Court or County Court. A body such as “Euro Expert” is especially well placed to promote the judicious and sensible use of ADR in its members’ home territories and also in cross-border disputes - and I for one encourage such an approach by Euro Expert and the members of its constituent member organizations.

A. Background and Working of ICC

The International Chamber of Commerce (ICC) was founded in 1919 to serve world business by promoting trade and investment, open markets for goods and services, and the free flow of capital. The organization's international secretariat was established in Paris and the ICC's International Court of Arbitration (ICA) was created in 1923.

The International Chamber of Commerce (ICC) is a non-profit, private international organization that works to promote and support global trade and globalization. It serves as an advocate of some world businesses in the global economy, in the interests of economic growth, job creation, and prosperity. As a global business organization, made up of member states, it helps the development of global outlooks on business matters. ICC has direct access to national governments worldwide through its national committees among others.

To attain this objective, ICC has developed a range of activities. The ICC International Court of Arbitration (ICA) is a body which hears and resolves private disputes between parties. Its voluntary rule-writing for business spreads best practice in areas as varied as banking, marketing, anti-corruption and environmental management. Their policy-making and advocacy work keeps national governments, the United Nations system and other global bodies apprised of the views of the world business on some of the most pressing issues of the day.

ICC's first president was Etienne Clémentel. In December 2004 the World Council elected Yong Sung Park as the Chairman of ICC, Marcus Wallenberg as the Vice-Chairman and Jean-Rene Fourtou as the Honorary Chairman. In June 2005, Guy Sebban was elected International Secretariat by the World Council.

Initially representing the private sectors of Belgium, Britain, France, Italy and the United States, it expanded to represent worldwide business organizations in around 140 countries.

World Council, National Committees, and International Secretariat - The ICC World Council is a general assembly of a major intergovernmental organization composed of business executives. National committees name delegates to the Council. Ten direct members may be invited to participate. It usually meets twice a year. The Council elects the Chairman and Vice-Chairman for two-year terms. The Council elects the Executive Board on the Chairman's recommendation.

The Secretary General heads the International Secretariat. The Secretary General works with the national committees to carry out ICC's work programs and is appointed by the World Council. The ICC International Secretariat, is based in Paris and is the operational arm of ICC. It carries out the work programme approved by the World Council, feeding business views into intergovernmental organizations.

The Executive Board is responsible for implementing ICC policy. The Executive Board has between 15 and 30 members of both business leaders and ex-officio members. They serve for three years. They have a one third rotation in membership. The Chairman, his immediate predecessor, and the Vice-Chairman form the Chairmanship.

National Committees represent the ICC in their respective countries. They recommend to the ICC their respective national business concerns in its policy recommendations to governments and international organizations. There are established formal ICC structures in over 90 countries. In countries where there is no national committee, companies and organizations such as chambers of commerce and professional associations can become direct members. ICC has access to national governments through its network of national committees.

Finance Committee, advices the Executive Board on all financial matters. It reviews the financial implications of ICC's activities and supervises the flow of revenues and expenses of the organization. The Chairman is elected by the ICC World Council.

Commissions develop international and national government initiatives in their subject areas. They also develop business positions for submission to international organizations and governments. Commissions are composed of more than 500 business experts from member companies.

B. Dispute Resolution Services

ICC International Court of Arbitration (ICA) continues to provide the most trusted system of commercial arbitration in the world, having received 14000 cases since its inception in 1923. Over the past decade, the Court's workload has considerably expanded.

The Court's membership has also grown and now covers 86 countries. With representatives in North America, Latin and Central America, Africa and the Middle East and Asia, the ICC Court has significantly increased its training activities on all continents and in all major languages used in international trade.

In the world of international commerce, the ICC is perhaps best known for its role in promoting and administering international arbitration as a means to resolve disputes arising under international contracts. It is one of the world's leading institutions in providing international dispute resolution services, together with the American Arbitration Association, the London Court of International Arbitration (LCIA), the Singapore International Arbitration Centre (SIAC), and the Stockholm Chamber of Commerce.

It is common for international commercial contracts to provide for an agreed means of resolving any disputes that may arise, and the ICC is one of leading institutions for administering international arbitration. The ICC's dispute resolution services also include ADR procedures such as mediation and expert determinations.

With the launch of ICC's BASCAP (Business Action to Stop Counterfeiting and Piracy) initiative, more than 130 companies and trade associations are now actively engaged in a set of projects designed to defeat the pirates and increase public and political awareness of the economic and social harm caused by this illegal activity. BASCAP is using ICC's global media network and national committee structure to spread the word.

BASCAP was launched in 2004 by the then ICC Chairman, Jean-Rene Fourtou, and its an operational platform established by ICC that connects all business sectors and cuts across all national borders, drawing them together to ensure that their message is clearly heard by governments and the public. BASCAP is prepared for a sustained effort to end this scourge. As the only business organization with a truky global reach, ICC is well placed to take the fight against counterfeiting to the level required for action to be effective.

D. ICC Rules

Since its establishment the ICC has adopted different rules to foster the settlement of disputes by using ADR. The rule that establishes the International Court of Arbitration, i.e. ICC Rule of Arbitration is the most recent one. In addition, it has adopted the ICC Rules of Optional Conciliation which came in to force in January, 1988. The later rule is now substantially being replaced by ICC ADR Rules. The widely used definition of ADR is not fully accepted by the ICC. For instance, ADR has been defined by as “Amicable Dispute Resolution” as contrary to the widely used meaning ‘Alternative Dispute Resolution’. In addition, in most of the official ICC documents and its rules, ADR does not include arbitration but only proceedings which do not result in a decision or award of the Neutral which can be enforced at law.

The ICC ADR Rules are the result of discussions between dispute resolution experts and representatives of the business community from 75 countries. Their purpose is to offer business partners a means of resolving disputes amicably, in the way best suited to their needs. A distinctive feature of the Rules is the freedom the parties are given to choose the technique they consider most conducive to settlement. Failing agreement on the method to be adopted, the fallback shall be mediation.

As an amicable method of dispute resolution, ICC ADR should be distinguished from ICC arbitration. They are two alternative means of resolving disputes, although in certain circumstances they may be complementary. For instance, it is possible for parties to provide for ICC arbitration in the event of failure to reach an amicable settlement. Similarly, parties engaged in an arbitration may turn to ICC ADR if their dispute seems to warrant a different, more consensual approach. The two services remain distinct, however, each administered by a separate secretariat based at ICC headquarters in Paris. The ICC ADR Rules, which replace the 1988 ICC Rules of Optional Conciliation, may be used in domestic as well as international contexts.

Let’s have a much closer look at the ICC Arbitration Rule adopted in the year 1998. The arbitration rule composed of different parts that supplement the body of the rule. It has 35 articles, which makes the main body of the rule, followed by three Appendixes.

The rule starts with a standard arbitration clause and standard clause for an ICC pre-arbitration reference procedure and ICC arbitration. As to my own view, it is desired to attain uniformity and common understanding between the disputants as to the valid effect of the proceeding and give full power either to the ICC rule and/or the tribunal as the case may be. Here are these standard clauses, the first being the arbitral clause and the second is the clause for an ICC pre-arbitration reference procedure and ICC arbitration. (www.iccarbitration.org).

“All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules.”

“Any party to this contract shall have the right to have recourse to and shall be bound by the pre-arbitral referee procedure of the International Chamber of Commerce in accordance with its Rules for a Pre-Arbitral Referee Procedure.

All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules of Arbitration.”

The main body of the rule has 35 Articles under seven different headings. The first part is ‘Introductory Provisions’ composed of the declaration of the existence of the International Court of Arbitration (ICA) and definition of terms. The second part deals with the ‘the Commencement of the Arbitration’ like the effect of the arbitration agreement and the like. The next one is about the “Arbitral Tribunal” followed by the part which defines the ‘Arbitral Proceeding’. In these parts the number, appointment and replacement of arbitrators, and the place, rules, languages and closing of the tribunal has been well defined. The fifth part discusses about the ‘Award’ which, for instance, limits the maximum period when the ward should be given to be six months from the commencement of the tribunal. The last two parts speaks about the ‘Cost’ and ‘Miscellaneous’ matters, where the cost part is supplemented by Appendix III.

The three appendixes supplement the main body of the rule and they are equally persuasive. Appendix I is the ‘Statutes of International Court of Arbitration’ which stipulates the function of the court, its members and their appointment and their roles. Appendix II is entitled as ‘Internal Rule of the ICA’. This part exclusively regulates the confidential nature of courts work, the relationship of the members of the court (the Chairman, Vice-Chairmen, and members and alternate members - collectively designated as members) with panellists (arbitrators) and with the ICC National Committee. For instance, the members of the ICA may not act as arbitrators or as counsel in cases submitted to ICC arbitration. The last one, Appendix III, deals with ‘Arbitration Costs and Fees’ supported by two schedules, i.e. administrative expenses and arbitrator’s fee. The amounts of payment are determined according to the pecuniary interest involved over the matter in a regressive rate. The least payment is $2,500 for the administrative expense and the same mount as arbitrators’ fee for a dispute involving an amount not exceeding $50,000, and the maximum is $88,800 for the administrative expense and 0.01% to 0.056% as arbitrators’ fees for a dispute involving more than $100, 000, 000 pecuniary interests.

ICC has over eight decades of experience in devising rules to govern and facilitate the conduct of international business. These include those designed to resolve the conflicts that inevitably arise in trading relations. The ICC being intergovernmental institute is one of the popular institutes in the field of settling trade disputes. Among the means it uses in the settlement of disputes, ADR is one. It has also arbitration tribunal, International Court of Arbitration- ICA, established by the ICC arbitration Rule. Though, it is hardly possible to compare it, the Addis Chamber of Commerce (AACC) Arbitration Rule resembles the ICC arbitration Rule is some respects, like the existence of the cost and expense schedules. A question can be raised as to the cost effectiveness of ADR by observing the schedule of ICC and AACC arbitration rules.

UNCITRAL Documents

A. Origin

The United Nations Commission on International Trade Law (UNCITRAL) was established by the General Assembly in 1966 (Resolution 2205(XXI) of 17 December 1966). In establishing the Commission, the General Assembly recognized that disparities in national laws governing international trade created obstacles to the flow of trade, and it regarded the Commission as the vehicle by which the United Nations could play a more active role in reducing or removing these obstacles.

UNCITRAL is a subsidiary body of the General Assembly of the United Nations with the general mandate to further the progressive harmonization and unification of the law of international trade. UNCITRAL has since prepared a wide range of conventions, model laws and other instruments dealing with the substantive law that governs trade transactions or other aspects of business law which have an impact on international trade. UNCITRAL meets once a year, typically in summer, alternatively in New York and in Vienna.

It is important here to brief the difference between UNCITRAL and WTO since some peoples are confused of their difference and take one as part of the other, which in fact is not. UNCITRAL is a subsidiary body of the General Assembly of the United Nations.  The Secretariat of UNCITRAL is the International Trade Law Division of the Office of Legal Affairs of the United Nations Secretariat. In contrast, the World Trade Organization (WTO) is an intergovernmental organization independent from the United Nations.

Moreover, the issues dealt with by the WTO and UNCITRAL are different. The WTO deals with trade policy issues, such as trade liberalization, abolition of trade barriers, unfair trade practices or other similar issues usually related to public law, whereas UNCITRAL deals with the laws applicable to private parties in international transactions. As a consequence, UNCITRAL is not involved with "state-to-state" issues such as anti-dumping, countervailing duties, or import quotas.

UNCITRAL plays an important role in improving the legal framework for international trade by preparing international legislative texts for use by States in modernizing the law of international trade and non-legislative texts for use by commercial parties in negotiating transactions. UNCITRAL legislative texts address international sale of goods; international commercial dispute resolution, including both arbitration and conciliation; electronic commerce; insolvency, including cross-border insolvency; international transport of goods; international payments; procurement and infrastructure development; and security interests. Non-legislative texts include rules for conduct of arbitration and conciliation proceedings; notes on organizing and conducting arbitral proceedings; and legal guides on industrial construction contracts and counter trade.

When we look at the mandate or the objectives of its establishment the General Assembly gave the Commission the general mandate to further the progressive harmonization and unification of the law of international trade. The Commission has since come to be the core legal body of the United Nations system in the field of international trade law.

"Harmonization" and "unification" of the law of international trade refers to the process through which the law facilitating international commerce is created and adopted. International commerce may be hindered by factors such as the lack of a predictable governing law or out-of-date laws unsuited to commercial practice. The United Nations Commission on International Trade Law identifies such problems and then carefully crafts solutions which are acceptable to States having different legal systems and levels of economic and social development.

"Harmonization" may conceptually be thought of as the process through which domestic laws may be modified to enhance predictability in cross-border commercial transactions. "Unification" may be seen as the adoption by States of a common legal standard governing particular aspect of international business transactions.  A model law or a legislative guide is an example of a text which is drafted to harmonize domestic law, while a convention is an international instrument which is adopted by States for the unification of the law at an international level. Texts resulting from the work of UNCITRAL include conventions, model laws, legal guides, legislative guides, rules, and practice notes. In practice, the two concepts are closely related.

B. Membership

As is the case with most subsidiary bodies of the General Assembly, which is composed of all States members of the United Nations, membership in UNCITRAL is limited to a smaller number of States, so as to facilitate the deliberations. The General Assembly elects states to be a member of the Commission from UN member states. UNCITRAL was originally composed of 29 States; its membership was expanded in 1973 to 36 States and again in 2004 to 60 States. The membership is representative of the various geographic regions and the principal economic and legal systems of the world. Members of the Commission are elected for terms of six years, the terms of half the members expiring every three years.

In addition, there are five regional groups represented within the Commission: African States; Asian States; Eastern European States; Latin American and Caribbean States; Western European and Other States.

As from 25 June 2007, the members of UNCITRAL, and the years when their memberships expire, are listed bellow.

Thirty states whose membership expire in the year 2010 are Algeria, Australia, Austria, Belarus, Colombia, Czech Republic, Ecuador, Fiji, Gabon, Guatemala, India, Iran (Islamic Republic of), Israel, Italy, Kenya, Lebanon, Madagascar, Mongolia, Nigeria , Pakistan, Paraguay, Poland, Serbia, Spain, Switzerland, Thailand, Uganda, United States of America, Venezuela (Bolivarian Republic of),  and Zimbabwe.

Where as the remaining thirty states whose membership expire in the year 2013 are Armenia, Bahrain, Benin, Bolivia, Bulgaria, Cameroon, Canada, Chile, China, Egypt, El Salvador , France, Germany , Greece, Honduras, Japan, Latvia,  Malaysia, Malta, Mexico, Morocco, Namibia, Norway , Republic of Korea, Russian Federation, Senegal, Singapore, South Africa, Sri Lanka, and United Kingdom of Great Britain and Northern Ireland.

The degree of participation of developing nation is maintained to the possible extent. In accordance with its mandate, (Para. 9 of General Assembly resolution 2205 (XXI) of 17 December 1966), UNCITRAL takes into account in its work “the interests of all peoples, and particularly those of the developing countries, in the extensive development of international trade". Members of the Commission represent different geographic areas, and are elected by the General Assembly "having due regard to the adequate representation of the principal economic and legal systems of the world, and of developed and developing countries." (Id., para. 1).

Developing countries play an active role in both drafting and adoption UNCITRAL texts. The commitment of the Commission and the Secretariat to providing training and technical assistance to those countries is also long-standing and constant. Similarly, the General Assembly has expressed strong support for this work. For example, General Assembly resolution 55/151 of 12 December 2000 entitled "Report of the United Nations Commission on International Trade Law" "… reaffirms the importance, in particular for developing countries, of the work of the Commission concerned with training and technical assistance in the field of international trade law, such as assistance in the preparation of national legislation based on legal texts of the Commission".

Though UNCITRAL texts are initiated, drafted, and adopted substantially by a body made up of 60 elected member States representing different geographic regions, participants in the drafting process include the member States of the Commission and other States (referred to as "observer States"), as well as interested international inter-governmental organizations ("IGO's") and non-governmental organizations ("NGO's").

C. Documents adopted by UNCITRAL

So far since its establishment by the decision of the General Assembly of the UN, UNCITRAL has adopted four documents for the purpose of "Harmonization" and "unification" of the law of international trade. These are the 1976 UNCITRAL Arbitration Rules, the 1980 UNCITRAL Conciliation Rules, the UNCITRAL Model Law on International Commercial Arbitration of 1985 which is later amended in 2006, and the UNCITRAL Model Law on International Commercial Conciliation of 2002 which is also amended in 2004.

The following facts necessitated the adoption of the Arbitration Rules 1976;

1. 1. Recognizing the value of arbitration as a method of settling disputes arising in the context of international commercial relations,
   2. Being convinced that the establishment of rules for ad hoc arbitration that are acceptable in countries with different legal, social and economic systems would significantly contribute to the development of harmonious international economic relations,
   3. Bearing in mind that the Arbitration Rules of the United Nations Commission on International Trade Law have been prepared after extensive consultation with arbitral institutions and centres of international commercial arbitration,
   4. Noting that the Arbitration Rules were adopted by the United Nations Commission on International Trade Law at its ninth session after due deliberation,

This rule has 41 Article under IV different Sections. Section I deals about “Introductory Rules” including the scope of application of the rule, the second about “the composition of the arbitral tribunal”, then about the “arbitral proceeding” and the lastly one about the nature of “the award” including the costs there under.

The Generally Assembly adopted the second rule of UNCITRAL, i.e. 1980 Conciliation rules, which regulate conciliation as an alternative means of dispute settlement. The rules are divided in to 20 Articles and a Model Conciliation Clause. It stipulated a specific rule about the scope of application of the rule; the nomination, role, ethical responsibilities of the conciliators; the rule of evidence before them; the effect and costs of the conciliation proceeding. The followings were the observations of the time that necessitated the adoption of this rules, in addition to the general purpose of the UNCITRAL;

1. Recognizing the value of conciliation as a method of amicably settling disputes arising in the context of international commercial relations,
2. Convinced that the establishment of conciliation rules that are acceptable in countries with different legal, social and economic systems would significantly contribute to the development of harmonious international economic relations,
3. Noting that the Conciliation Rules of the United Nations Commission on International Trade Law were adopted by the Commission at its thirteenth session1 after consideration of the observations of Governments and interested organizations.

The recent two UNCITRAL documents which are model laws as the name it self indicates, are specifically meant to regulate arbitration and conciliation proceedings in the international commercial relations. A model law is a legislative text that is recommended to States for incorporation into their national law. Unlike an international convention, model legislation does not require the State enacting it to notify the United Nations or other States that may have also enacted it.

In incorporating the text of the model legislation into its legal system, a State may modify or leave out some of its provisions. In the case of a convention, the possibility of changes being made to the uniform text by the States parties (normally referred to as “reservations”) is much more restricted; in particular, trade law conventions usually either totally prohibit reservations or allow only very few, specified ones. The flexibility inherent in model legislation is particularly desirable in those cases where it is likely that the State would wish to make various modifications to the uniform text before it would be ready to enact it as national law. Some modifications may be expected in particular when the uniform text is closely related to the national court and procedural system. This, however, also means that the degree of, and certainty about, harmonization achieved through model legislation is likely to be lower than in the case of a convention. Because of the flexibility inherent in a model law, the number of States enacting model legislation is likely to be higher than the number of States adhering to a convention.

In order to achieve a satisfactory degree of harmonization and certainty, States should consider making as few changes as possible in incorporating the Model Law into their legal systems; however, if changes are made, they should remain within the basic principles of the Model Law. A significant reason for adhering as much as possible to the uniform text is to make the national law as transparent and familiar as possible for foreign parties, advisers and conciliators who participate in conciliations in the enacting State.

International trade and commerce have grown rapidly with cross border transactions being entered into by a growing number of entities, including small and medium-sized ones. With the increasing use of electronic commerce, where business is frequently conducted across national boundaries, the need for effective and efficient dispute resolution systems has become paramount. UNCITRAL has drafted the Model Law to assist States in designing dispute resolution processes that are intended to reduce costs of dispute settlement, foster maintaining a cooperative atmosphere between trading parties, prevent further disputes and inject certainty into international trade. By adopting the Model Law, and by educating parties engaged in international commerce about its purposes, the parties will be encouraged to seek non-adjudicative dispute settlement methods that will increase cost-effectiveness in the marketplace.

The objectives of the Model Law, which include encouraging the use of conciliation and providing greater predictability and certainty in its use, are important for fostering economy and efficiency in international trade.

The Model Law was developed in the context of recognition of the increasing use of Arbitration and conciliation as a method for settling commercial disputes. The Model Law was also designed to provide uniform rules in respect of the conciliation process. In many countries, the legal rules affecting conciliation are set out in various pieces of legislation and take differing approaches on issues such as confidentiality and evidentiary privilege and exceptions thereto. Uniformity on such topics helps to provide greater integrity and certainty in the conciliation process. The benefits of uniformity are magnified in cases involving conciliation via the Internet where the applicable law may not be self-evident.

UNCITRAL is a subordinate body in the UN which have the objective of harmonizing laws regulating international trade. So far it has adopted two arbitration and two more conciliation rules. The last two are model laws which can be used by the nations of the world in formulating their own domestic laws and treaties regulating arbitration and conciliation. This can be inferred from the latest optional laws of the PCA which have been made according to the UNCITRAL laws.

International Documents and Organs Regulating ADR

ADR is being recognized as the most effective means of settling international disputes of any type. Basically, diplomatic and commercial relations are being enhanced by the employment of amicable dispute resolution mechanisms. To help this disposition to ADR than to other courts, lots of treaties have been signed so far either under the supervision of the UN or under the initiation of other public and domestic institutions and states. Tribunals have been established as a result of these treaties to serve as the best forum in settling disputes of international and domestic nature.

In the coming discussions we will try to see few of these international documents and tribunals. The writer of this sections believes that there are much more institutions which are not discussed for it does not get priority. Students are encouraged to make a deeper look to the remaining institutions. Thus, the widely known international institutions like the American Arbitration Association (AAA), the London Court of International Arbitration (LCIA), the Singapore International Arbitration Centre (SIAC), and the Stockholm Chamber of Commerce are not discussed. There are also ADR tribunals that have specialized in settling dispute of specific nature. The London Maritime Arbitration Center is one of them.

I have selected four different sets of international documents for easy understanding of ADR in international level. The 1958 New York Convention on the Recognition and Enforcement of Arbitral Awards as adopted by the UN diplomatic conference on June 10, 1958 and entered in to force in 7^th of June, 1959 is the first one. Secondly, the five documents under the Permanent Court of Arbitration (PCA) two of which are Conventions that established the PCA whereas the others are optional laws are summarized. The United Nation Commission on International Trade Law (UNCITRAL) and the documents under it are also introduced in the later part. Lastly, the institution of the International Chamber of Commerce, its tribunal (International Court of Arbitration – ICA) and its rules have been discussed.

New York Convention on the Recognition and Enforcement of Foreign Arbitral Award, 1958

A. Background

The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention, was adopted by a United Nations diplomatic conference on 10 June 1958 and entered into force on 7 June 1959. The Convention requires courts of contracting states to give effect to private agreements to arbitrate and to recognize and enforce arbitration awards made in other contracting states. Widely considered the foundational instrument for international arbitration, it applies to arbitrations which are not considered as domestic awards in the state where recognition and enforcement is sought. Though other international conventions apply to the cross-border enforcement of arbitration awards, the New York Convention is by far the most important.

In 1953, the International Chamber of Commerce (ICC) produced the first draft Convention on the Recognition and Enforcement of International Arbitral Awards to the United Nations Economic and Social Council (ECOSOC). With slight modifications, the ECOSCOC submitted the convention to the International Conference in the Spring of 1958. The Conference was chaired by Willem Schurmann, the Dutch Permanent Representative to the United Nations and Oscar Schachter, a leading figure in international law who later taught at Columbia Law School and School of International and Public Affairs, and served as the President of the American Society of International Law.

International arbitration is an increasingly popular means of alternative dispute resolution for cross-border commercial transactions. The primary advantage of international arbitration over court litigation is enforceability: an international arbitration award is enforceable in most countries in the world. Other advantages of international arbitration include the ability to select a neutral forum to resolve disputes, that arbitration awards are final and not ordinarily subject to appeal, the ability to choose flexible procedures for the arbitration, and confidentiality.

Once a dispute between parties is settled, the winning party needs to collect the award or judgment. Unless the assets of the losing party are located in the country where the court judgment was rendered, the winning party needs to obtain a court judgment in the jurisdiction where the other party resides or where its assets are located. Unless there is a treaty on recognition of court judgments between the country where the judgment is rendered and the country where the winning party seeks to collect, the winning party will be unable to use the court judgment to collect.

B. Overview of the Convention

The convention has got XVI articles divided in to further sub articles, but with no further division in to parts. It defines ‘foreign arbitral award’ as  arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought, and arising out of differences between persons, whether physical or legal. In addition, arbitral awards not considered as domestic awards in the State where their recognition and enforcement are sought can be assimilated to foreign arbitral awards as per Article I(1) of this the convention. Article IV obliges the party applying for recognition and enforcement to provide, in the language of the nation where enforcement or recognition is sought, the copy of the authenticated original award or a duly certified copy thereof and the original agreement (arbitral submission) or a duly certified copy thereof.

Under the Convention documents as per Article II and III, an arbitration award issued in any contracting state can generally be freely enforced in any other contracting state, only subject to certain, limited defenses. These defenses are:

1. party to the arbitration agreement was, under the law applicable to him, under some incapacity;
2. the arbitration agreement was not valid under its governing law;
3. a party was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings, or was otherwise unable to present its case;
4. the award deals with an issue not contemplated by or not falling within the terms of the submission to arbitration, or contains matters beyond the scope of the arbitration (subject to the proviso that an award which contains decisions on such matters may be enforced to the extent that it contains decisions on matters submitted to arbitration which can be separated from those matters not so submitted);
5. the composition of the arbitral tribunal was not in accordance with the agreement of the parties or, failing such agreement, with the law of the place where the hearing took place (the "lex loci arbitri");
6. the award has not yet become binding upon the parties, or has been set aside or suspended by a competent authority, either in the country where the arbitration took place, or pursuant to the law of the arbitration agreement;
7. the subject matter of the award was not capable of resolution by arbitration; or
8. enforcement would be contrary to "public policy".

C. List of Member States

Countries which have adopted the New York Convention have agreed to recognize and enforce international arbitration awards. As of September 2007, 141 of the 192 United Nations Member States and the Holy See have adopted the New York Convention. Only 51 Member States and Taiwan have not yet adopted the New York Convention. A number of British Dependent Territories have not yet had the Convention extended to them by Order-in-Council. For easy understanding of the status of world nations in light of the convention, here are the list nations that are signatories and which are not party to it. The fact that Ethiopia and many other African nations are not signatories to the convention can be easily analyzed on the face of these lists. In the last part of this chapter we will see Ethiopian approach to these documents and the alternative one as well.

STATE PARTIES TO THE CONVENTION ON THE RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS, 1958 (as of May 2007)

Afghanistan, Albania, Algeria, Antigua and Barbuda, Argentina, Armenia, Australia, Austria, Azerbaijan, Bahamas, Bahrain, Bangladesh, Barbados, Belarus, Belgium, Benin, Bolivia, Bosnia and Herzegovina, Botswana, Brazil, Brunei Darussalam, Bulgaria, Burkina Faso, Cambodia, Cameroon, Canada, Central African Republic, Chile, China, Colombia, Costa Rica, Cote d’Ivore, Croatia, Cuba, Cyprus, Czech Republic, Denmark, Djibouti, Dominica, Dominican Republic, Ecuador, Egypt, El Salvador, Estonia, Finland, France, Gabon, Georgia, Germany, Ghana, Greece, Guatemala, Guinea, Haiti, Holy See, Honduras, Hungary, Iceland, India, Indonesia, Iran, Ireland, Israel, Italy, Jamaica, Japan, Jordan,  Kazakhstan, Kenya, Kuwait, Kyrgyzstan, Lao People's Democratic Republic, Latvia, Lebanon, Lesotho, Liberia, Lithuania, Luxembourg, Madagascar, Malaysia, Mali, Malta, Marshall Islands, Mauritania, Mauritius, Mexico, Moldova, Monaco, Mongolia, Montenegro, Morocco, Mozambique, Nepal, Netherlands, New Zealand, Nicaragua, Niger, Nigeria, Norway, Oman, Pakistan, Panama, Paraguay, Peru, Philippines, Poland, Portugal, Qatar, Republic of Korea, Romania, Russian Federation, Saint Vincent and the Grenadines, San Marino, Saudi Arabia, Senegal, Serbia, Singapore, Slovakia, Slovenia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Syrian Arab Republic, Thailand, The former Yugoslav Republic of Macedonia, Trinidad and Tobago, Tunisia, Turkey, Uganda, Ukraine, United Arab Emirates, United Kingdom of Great Britain and Northern Ireland, United Republic of Tanzania, United States of America, Uruguay, Uzbekistan, Venezuela, Vietnam, Zambia, Zimbabwe.

States which are Not Party to the New York Convention (as of May 2007)

Andorra, Angola, Belize, Belize, Bhutan, British Virgin Islands, Burundi, Cape Verde, Chad, Comoros, Congo - Dem. Republic of the, Equatorial Guinea, Eritrea, Ethiopia, Fiji, Gambia, Grenada, Guinea-Bissau, Guyana, Iraq, Kiribati, North Korea, Libya, Liechtenstein, Malawi, Maldives, Micronesia, - Fed. States of, Myanmar, Namibia, Nauru, Palau, Papua New Guinea, Rwanda, Saint Kitts and Nevis, Saint Lucia, Samoa, Sao Tome and Principe, Seychelles, Sierra Leone, Solomon Islands, Somalia, Sudan, Suriname, Swaziland, Timor-Leste, Togo, Tonga, Tajikistan, Turkmenistan, Tuvalu, Vanuatu, Yemen

This document, in fact, harmonized the enforcement of foreign arbitral award since most of the nations of the world approved it. Its contents help the disputants to fill confidence on enforceability of outcomes of tribunals validly established out of their national jurisdiction. The fact that Ethiopia is not yet the signatory of this document by itself will not absolutely hinder the enforceability of awards given elsewhere for we can use the civil procedure provisions (Arts 450 – 456) in the matter.

Convention for the Pacific Settlement of International Disputes (1899 and 1907) and the Permanent Court of Arbitration (PCA)

The Convention which could be said the first in its nature and content came in to the hands of leaders in the late 1890’s for approval. The same document, with out affecting the status of the existing one and as well the commitment of signatories, by enclosing a more detailed stipulation came in to existence in 1907. These two conventions are the founding documents of the Permanent Court of Arbitration (PCA), which is established two decades before the establishment of the Permanent Court of Justice in the late 1910’s, which is now replaced by the International Court of Justice.

The objectives behind the initiation of these conventions are set in the preamble of the documents. The great Majesty and Empresses of the time, in 1899, have put the following as their objective

1. a strong desire to work for the maintenance of general peace;
2. to resolve and promote by their best efforts the friendly settlement of international disputes;
3. recognizing the solidarity uniting the members of the society of civilized nations;
4. desirous of extending the empire of law, and of strengthening the appreciation of international justice;
5. convinced that the permanent institution of a tribunal of arbitration, accessible to all, in the midst of the independent Powers, will contribute effectively to this result;
6. having regard to the advantages attending the general and regular organization of the procedure of arbitration;
7. sharing the opinion of the august initiator of the International Peace Conference that it is expedient to record in an international agreement the principles of equity and right on which are based the security of States and the welfare of peoples.

Among the points that necessitated the coming in to existence of the new Convention which was signed in the year 1907 were the following (it is noted that the second Convention also shares the objectives set by the first one listed here above);

1. Insuring the better working in practice of Commissions of Inquiry and Tribunals of Arbitration, and of facilitating recourse to arbitration in cases which allow of a summary procedure;
2. The necessity to revise in certain particulars and to complete the work of the First Peace Conference for the pacific settlement of international disputes (held in 1899);

The first convention has 61 articles under four Titles. Title I, shortly in a single article, sets the objective of the Convention and interests of the signatory nations, i.e. “with a view to obviating, as far as possible, recourse to force in the relations between States, the Contracting Powers agree to use their best efforts to ensure the pacific settlement of international differences.” Title II established the first alternatives of settling dispute among member states by using “Good Offices and Mediation” and the procedures there under. The third Title deals with the possibility of establishing “International Commission of Inquiry” to facilitate a solution for differences of international nature by elucidating the facts by means of an impartial and conscientious investigation. The last Title, in depth, regulates international arbitration between the member states. This part established the Permanent Court of Arbitration in its chapter two having its seat in The Hague. The organization of the tribunal, the powers and duties of the disputant states before the tribunal, the jurisdiction of the court, the effect and binging nature of the award has been thoroughly discussed. At end, the Convention has got a General Provision which speaks about the ratification or membership process, the coming in to force of the Convention and other matters.

When we come to the second Convention, most of its contents are similar with the 1899 Convention except in some circumstances. It has, in deed, 97 Articles under its five Parts. I could say that the first two parts of this convention is a literal copy of its predecessor. Under Part III, which deals about the International Commission of Inquiry, more detailed provisions have been included as to its working procedure. Especially, the commission has been put under the supervision of the International Bureau of the Permanent Court of Arbitration, which serves as a registrar. Part IV of it included a new system which was not there under the predecessor Convention. Chapter IV of it established “Arbitration by Summary Procedure” in disputes admitting of a summary procedure. The last one, Part V, is devoted for “Final Provisions” regarding membership and coming in to force of the Convention.

When we come to memberships, we can see three different categories of nation; member for one of the Conventions and member for both of the Conventions. Generally speaking, 107 states have acceded to one or both of the PCA's founding conventions. It is noted here that Ethiopia is a member to the 1899 founding convention starting from May 28, 2003. Proclamation No 348/2003 approves the said Convention and incorporated it to the legal regime of the nation.

In addition to these founding Conventions, the PCA has some more Arbitration and Conciliation rules where the disputing parties can free to accept or refuse of its application on their disputes. These are, the 1992 PCA Optional Rule for Arbitrating Disputes between two States, the 1996 PCA Optional Rules for Arbitration Involving International Organization and States, and the 1996 PCA Optional Conciliation Rules. These optional rules made in accordance with the UNCITRAL model laws enacted so far including model Arbitration and Conciliation clauses.

The first two optional rules, i.e. arbitration rules, have been elaborated for use in arbitrating disputes arising under treaties or other agreements between two States, and disputes arising under treaties, or other agreements or relationships between an international organization and a State, or between two international organizations. But they can be, as well, modified for use in connection with multilateral treaties. The Rules are based on the UNCITRAL Arbitration Rules with changes in order to:

(i) reflect the public international law character of disputes between States, and between   international organizations and States and diplomatic practice appropriate to such disputes ;

(ii) indicate the role of the Secretary-General and the International Bureau of the Permanent Court of Arbitration at The Hague, and the relation of these Rules with the 1899 and 1907 Hague Conventions for the Pacific Settlement of International Disputes; and

(iii) provide freedom for the parties to choose to have an arbitral tribunal of one, three or five persons.

The Rules are optional and emphasize flexibility and party autonomy. For example:

(i) the Rules, and the services of the Secretary-General and the International Bureau of the Permanent Court of Arbitration, are available for use by all States, and are not restricted to disputes in which both States are parties to either The Hague Convention for the Pacific Settlement of International Disputes of 1899 or that of 1907;

(ii) the choice of arbitrators is not limited to persons who are listed as Members of the Permanent Court of Arbitration;

(iii) States have complete freedom to agree upon any individual or institution as appointing authority. In order to provide a failsafe mechanism to prevent frustration of the arbitration, the Rules provide that the Secretary-General will designate an appointing authority if the parties do not agree upon the authority, or if the authority they choose does not act.

The following can be said about the PCA’s Optional Conciliation Rule.

A. Purpose of the Rules

Parties who have disputes that they are unable to settle through consultation and negotiation with each other may wish to consider conciliation as a method for resolving their differences without the need to resort to arbitration or judicial means.

Although the benefits of conciliation are widely recognized, some parties may hesitate to enter into conciliation because they may be unfamiliar with the process or may have different views concerning how conciliation should be conducted. In order to facilitate greater use of conciliation, the Permanent Court of Arbitration has, with the approval of the Administrative Council, established these Optional Conciliation Rules (‘the PCA Optional Conciliation Rules’). These Rules are based on the UNCITRAL Conciliation Rules, with changes to indicate, inter alia, the availability of the Secretary-General of the Permanent Court of Arbitration to assist in appointing conciliators and of the International Bureau to furnish administrative support (Arts 4 (3) and 8).

The purpose of these Rules is to provide a convenient basis for mutual agreement of parties on practical procedures that are useful in the conciliation process. Thus, for example, the Rules describe how to start a conciliation, how to appoint conciliators, what functions conciliators are expected to perform, and how to encourage parties to speak freely and candidly with conciliators while at the same time preserving necessary confidentiality. These Rules also describe how, if the conciliation is unsuccessful, it may be easily terminated so as not to delay or prejudice recourse to arbitration, judicial procedures or other means for ultimately resolving the dispute.

B. Scope of Application

The PCA Optional Conciliation Rules were prepared primarily for use in assisting to resolve disputes arising out of or relating to legal relationships where the parties seek an amicable settlement of their differences. In addition, parties are free to agree to use these Rules in seeking to resolve any other type of dispute.

These Rules are intended for use in conciliating disputes in which one or more of the parties is a State, a State entity or enterprise, or an international organization. Thus, for example, the same Rules may be used in disputes between two States and also in disputes between two parties only one of which is a State.

The PCA recognizes the importance and complexity of disputes that involve more than two parties. These Rules are also appropriate for use in connection with multiparty disputes, provided that changes are made to reflect participation by more than two parties. The Secretary-General of the Permanent Court of Arbitration is available to consult with interested parties concerning modifications that may be considered in adapting these Rules for use in multiparty disputes.

These Rules, and the services of the Secretary-General and the International Bureau, are available for use by all States and their entities and enterprises, and are not restricted to disputes in which the State is a party to either the Hague Convention on the Pacific

Settlement of International Disputes of 1899, or that of 1907, nor is the choice of conciliators limited to persons who are listed as Members of the Permanent Court of Arbitration.

In modern international practice, the word ‘mediation’ is sometimes used to designate a process that is very similar to the procedures for ‘conciliation’ described in these Rules. In such cases, these Rules can also be used for mediation, it being necessary only to change the words ‘conciliation’ to ‘mediation’ and ‘conciliator’ to ‘mediator.’

C. Main Characteristics of the Rule

Parties who consider using the PCA Optional Conciliation Rules will wish to be aware of some of the main characteristics of these Rules:

A Voluntary Process - A primary principle that is expressed throughout these Rules is that initiating and continuing conciliation is entirely voluntary. Thus, these Rules provide that conciliation begins when all parties consent (Arts 2 (2) and 3) and that one party may terminate the process whenever it unilaterally determines that conciliation is no longer desirable (Art 15 (a)). These provisions reflect the belief that conciliation has the best chance to succeed when all parties share the desire to participate, and that, if they do not, it may be more efficient to resort without delay to arbitration or judicial means.

Flexible Procedures - Flexibility is another fundamental characteristic of these Rules. Parties are free to agree to have one or more conciliators (art. 3). The conciliator may conduct the process in such manner as he considers appropriate, taking into account the circumstances of the dispute, any views the parties may have expressed and any special need for a speedy settlement. The role of the conciliator under the PCA Optional Conciliation Rules is to assist parties to understand the issues and to reach an amicable settlement of their dispute. In pursuit of this goal, the conciliator may recommend terms of settlement if and when it is considered wise to do so, but the conciliator is not required to give a recommendation (art. 7 (4)). The approach of the conciliator under these Rules is to bring the parties to agreement by a variety of means, rather than to focus primarily on influencing the parties by a recommendation.

An Integrated System - A significant feature of the PCA Optional Conciliation Rules is that they are part of an integrated PCA dispute resolution system that links the procedures for conciliation with possible arbitration under the various PCA Optional Arbitration Rules. This is useful because if a dispute is not resolved by conciliation, parties may wish to move promptly to final and binding arbitration. Therefore, these Rules provide several important safeguards that apply in the event that arbitration, or recourse to judicial means, follows an unsuccessful conciliation.

The ultimate safeguard against using conciliation to delay commencement of arbitration is the key provision of these Rules that, as mentioned above, permits one party to terminate conciliation if it reaches the conclusion that the conciliation is no longer desirable. Moreover, by agreeing to conciliation under these Rules, the parties undertake that if the conciliation does not result in a settlement they will not introduce in any subsequent arbitration, or judicial proceedings, certain specified evidence that might be harmful. The evidence thus barred by these Rules consists of: (i) any views expressed by either party concerning possible settlement of the dispute; (ii) any admissions made by either party in the conciliation; (iii) any proposals made by the conciliator(s); or (iv) the fact that a party indicated willingness to accept a proposal for settlement made by the conciliator (art. 20). These provisions effectively protect parties and thereby encourage candor and a free exchange of views during the conciliation. Additional safeguards in these Rules include that the parties and conciliator undertake that, unless the parties vary the Rules, a conciliator will not act as an arbitrator or representative of a party in any arbitration or judicial proceeding in respect of a dispute that is subject to the conciliation, and that no party will present a conciliator as a witness in any such proceeding (art. 19).

A related safeguard arises from the provision of these Rules that makes clear that the conciliator may speak with the parties together or may meet them separately when that is advisable (art. 9 (1)). These Rules also provide that a party may communicate information to the conciliator subject to the restriction that it not be disclosed to the other party (art. 10). These provisions encourage parties to confide in the conciliator – which may be vital in guiding the conciliator in the search for an amicable solution – and also to protect parties in arbitration or court litigation that may occur if no solution is found in the conciliation.

The Conventions for the Pacific Settlement of International Disputes are the first documents that opened the mob towards common understanding of the value of ADR in the settlement of international disputes of any kind. The fact that the PCA were working well even before the establishment of League of Nations and the court under it, i.e. the Permanent Court of Justice, shows us the common understanding of the leaders of the nation about the threat of dispute to the world peace and the value of ADR to tackle it. The new three rules are not mandatory rules and anybody whether a member to the PCA or not can freely use it though the matter has not been referred to the PCA.