General Assembly United Nations Commission on International Trade Law Thirty-fifth session New York, 17 – 28 June 2002 Draft Guide to Enactment and Use of the UNCITRAL Model Law on International Commercial Conciliation
Notion of conciliation and purpose of the Model Law .
The Model Law as a tool for harmonising legislation.
Assistance from UNCITRAL Secretariat.
Commencement of conciliation proceedings .
Communication between conciliator and parties .
Disclosure of information between the parties.
Admissibility of evidence in other proceedings .
Resort to arbitral or judicial proceedings.
Enforceability of settlement agreement.
* The late submission of the document reflects the increase in the workload of the Secretariat and its shortage ofprofessional staff
A/CN.9/514 Draft Guide to Enactment and Use of the UNCITRAL [Model Law on International Commercial Conciliation] Purpose of this guide
In preparing and adopting model legislative provisions on international commercial
conciliation, the United Nations Commission on International Trade Law (UNCITRAL or“the Commission”) was mindful that such provisions would be a more effective tool forStates modernizing their legislation if accompanied by background and explanatoryinformation. The Commission was also aware of the likelihood that the model provisionswould be used in a number of States with limited familiarity with conciliation as a methodof dispute settlement. Primarily directed to executive branches of Governments andlegislators preparing the necessary legislative revisions, the information provided in thisGuide should also provide useful insight to other users of the text, including commercialparties, practitioners, academics and judges.
Much of this Guide is drawn from the travaux préparatoires of the Model Law. The
Guide explains why the provisions in the Model Law have been included as essential basicfeatures of a statutory device designed to achieve the objectives of the Model Law. When itdrafted the model provisions, the Commission assumed that explanatory material wouldaccompany the text of the Model Law. For example, some issues are not settled in theModel Law but are addressed in the Guide, which is designed to provide an additionalsource of inspiration to States enacting the Model Law. It might also assist States inconsidering which provisions of the Model Law, if any, might have to be varied toaccommodate particular national circumstances.
This Guide to Enactment has been prepared by the Secretariat pursuant to a request
made by UNCITRAL. It reflects the Commission’s deliberations and decisions at thesession where the Model Law was adopted, and the considerations of UNCITRAL’sWorking Group II (on Arbitration and Conciliation) that conducted the preparatory work.
The Guide was adopted by the Commission on [insert date] / The Guide was
approved by the Commission on [insert date] for publication under the responsibility of theSecretariat. I. Introduction to the Model Law A. Notion of conciliation and purpose of the Model Law
The term "conciliation" is used in the Model Law as a broad notion referring
to proceedings in which a person or a panel of persons assists the parties in theirattempt to reach an amicable settlement of their dispute. There are criticaldifferences among the dispute resolution processes of negotiation, conciliation andarbitration. Once a dispute arises, the parties typically seek to resolve their disputeby negotiating without involving anyone outside the dispute. If the negotiations failto resolve the dispute, a range of dispute settlement mechanisms is available,including arbitration and conciliation.
In arbitration, the parties entrust the dispute resolution process and the
outcome of the dispute to the arbitral tribunal that imposes a binding decision on theparties. Conciliation differs from party negotiations in that conciliation involvesthird person assistance in an independent and impartial manner to settle the dispute. A/CN.9/514
It differs from arbitration because in conciliation the parties retain full control overthe process and the outcome and the process is non-adjudicatory. In conciliation, theconciliator assists the parties in negotiating a settlement which is designed to meetthe needs and interests of the parties in dispute (see A/CN.9/WG.II/WP.108, para. 12). The conciliation process is an entirely consensual one in which parties that arein dispute determine how to resolve the dispute, with the assistance of a neutral thirdparty. The neutral third party has no authority to impose on the parties a solution tothe dispute.
In practice, proceedings in which the parties are assisted by a third person to settle a
dispute are referred to by expressions such as conciliation, mediation or similar terms. Thenotion of “alternative dispute resolution” is also used to refer collectively to varioustechniques and adaptations of procedures for solving disputes by conciliatory methodsrather than by an adjudicating method such as arbitration. The Model Law uses the term“conciliation” to encompass all such procedures. To the extent that such “alternativedispute resolution” procedures are characterised by features mentioned above, they arecovered by the Model Law (see A/CN.9/WG.II/WP.108, para. 14).
Conciliation is being increasingly used in dispute settlement practice in
various parts of the world, including regions where until a decade or two ago it wasnot commonly used. As well, the use of conciliation is becoming a disputeresolution option preferred and promoted by courts and government agencies as wellas in community and commercial spheres. This trend is reflected, for example, in theestablishment of a number of private and public bodies offering services to interestedparties designed to foster the amicable settlement of disputes. Alongside this trend,various regions of the world have actively promoted conciliation as a method ofdispute settlement, and the development of national legislation on conciliation invarious countries has given rise to discussions calling for internationallyharmonized legal solutions designed to facilitate conciliation (seeA/CN.9/WG.II/WP.108, para. 15)
Conciliation proceedings are dealt with in a number of rules of arbitral
institutions and institutions specialising in the administration of various forms ofalternative methods of dispute resolution, as well as in the UNCITRAL ConciliationRules, which the Commission adopted in 1980. These Rules are widely used andhave served as a model for rules of many institutions (see A/CN.9/WG.II/WP.108,para.12). The prevailing view that emerged was that, in addition to the existence ofsuch Rules, it would be worthwhile to prepare uniform legislative rules to supportthe increased use of conciliation. It was noted that while certain issues, such as theadmissibility of certain evidence in subsequent judicial or arbitral proceedings or therole of the conciliator in subsequent proceedings could typically be solved byreference to sets of rules such as the UNCITRAL Conciliation Rules, there weremany cases where no such rules were agreed upon. The conciliation process mightthus benefit from the establishment of non-mandatory legislative provisions thatwould apply when the parties mutually desired to conciliate but had not agreed on aset of conciliation rules. Moreover in countries where agreements as to theadmissibility of certain kinds of evidence were of uncertain effect, uniformlegislation might provide a useful clarification. In addition it was pointed out withrespect to certain issues, such as facilitating enforcement of settlement agreementsresulting from conciliation, that the level of predictability and certainty required tofoster conciliation could only be achieved through legislation (see A/54/17, para. 342).
Conciliation proceedings may differ in procedural details depending on what is
considered the best method to foster a settlement between the parties. The provisionsgoverning such proceedings, as contained in the Model Law, are designed to accommodate
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those differences and leave the parties and conciliators free to carry out the conciliatoryprocess as they consider appropriate. Essentially the provisions seek to strike a balancebetween protecting the integrity of the conciliation process, for example, by ensuring thatthe parties’ expectations regarding the confidentiality of the mediation process are metwhilst also providing maximum flexibility by preserving party autonomy. B. The Model Law as a tool for harmonising legislation
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 requirethe State enacting it to notify the United Nations or other States that may have also enactedit. States are strongly encouraged, however, to inform the UNCITRAL Secretariat of anyenactment of the new Model Law (or any other model law resulting from the work ofUNCITRAL).
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 ofchanges 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 eithertotally prohibit reservations or allow only very few, specified ones. The flexibility inherentin model legislation is particularly desirable in those cases where it is likely that the Statewould wish to make various modifications to the uniform text before it would be ready toenact it as national law. Some modifications may be expected in particular when theuniform text is closely related to the national court and procedural system. This, however,also means that the degree of, and certainty about, harmonisation achieved through modellegislation is likely to be lower than in the case of a convention. Because of the flexibilityinherent in a model law, the number of States enacting model legislation is likely to behigher than the number of States adhering to a convention. In order to achieve asatisfactory degree of harmonisation and certainty, States should consider making as fewchanges as possible in incorporating the Model Law into their legal systems, but, if changesare made, they should remain within the basic principles of the Model Law. A significantreason for adhering as much as possible to the uniform text is to make the national law astransparent and familiar as possible for foreign parties, advisers and conciliators whoparticipate in conciliations in the enacting state. C. Background and history
International trade and commerce have grown rapidly with cross-border transactions
being entered into by a growing number of entities, including small and medium-sizedones. With the increasing use of electronic commerce, where business is frequentlyconducted across national boundaries, the need for effective and efficient dispute resolutionsystems has become paramount. UNCITRAL has drafted the Model Law to assist States indesigning dispute resolution processes that are intended to reduce costs of disputesettlement, foster maintaining a cooperative atmosphere between trading parties, preventfurther disputes and inject certainty into international trade. By adopting the Model Law,and by educating parties engaged in international commerce about its purposes, the partieswill be encouraged to seek non-adjudicative dispute settlement methods which will increasestability 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 essentialfor fostering economy and efficiency in international trade.
The Model Law was developed in the context of recognition of the increasing
use of conciliation as a method for settling commercial disputes. The Model Law was
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also designed to provide uniform rules in respect of the conciliation process. In manycountries, the legal rules affecting conciliation are set out in various pieces oflegislation and take differing approaches on issues such as confidentiality andevidentiary privilege and exceptions thereto. Uniformity on such topics helps providegreater integrity and certainty in the conciliation process. The benefits of uniformityare magnified in cases involving conciliation via the Internet where the applicable lawmay not be self evident.
At its thirty-second session, in 1999, the Commission had before it a note
entitled “Possible future work in the area of international commercial arbitration”(A/CN.9/460). Welcoming the opportunity to discuss the desirability and feasibilityof further development of the law of international commercial arbitration, theCommission generally considered that the time had come to assess the extensive andfavourable experience with national enactments of the UNCITRAL Model Law onInternational Commercial Arbitration (1985), as well as the use of the UNCITRALArbitration Rules and the UNCITRAL Conciliation Rules, and to evaluate in theuniversal forum of the Commission the acceptability of ideas and proposals forimprovement of arbitration laws, rules and practices. The Commission entrusted thework to one of its working groups, which it named the Working Group II (Arbitrationand Conciliation) (hereinafter referred to as “the Working Group”), and decided thatthe priority items should include work on conciliation. The Model Law was draftedover three sessions of the Working Group being the thirty-third, thirty-fourth andthirty-fifth sessions (A/CN.9/485, A/CN.9/487 and A/CN.9/506 respectively).
At its thirty-fifth session, the Working Group completed its examination of the
provisions and considered the draft guide to enactment. The Secretariat was requestedto revise the text of the draft guide to enactment and use of the Model Law, based onthe deliberations in the Working Group. It was noted that the draft model law,together with the draft guide to enactment and use, would be circulated to memberStates and observers for comment, and presented to the Commission for review andadoption at its thirty-fifth session, to be held in New York from 17 to 28 June 2002(see, A/CN.9/506 para. 13). [Note by the Secretariat: this section recording thehistory of the Model Law is to be completed after final consideration and adoption ofthe Model Law by the Commission]
In preparing the Model Law and addressing the subject matter before it, the
Commission had in mind a broad notion of conciliation, which could also be referredto as “mediation”, “alternative dispute resolution”, “neutral evaluation” and similarterms. The Commission's intent is that the Model Law apply to the broadest range ofcommercial disputes. The Commission agreed that the title of the Model Law shouldrefer to international commercial conciliation. While a definition of “conciliation” isprovided in article 1, the definitions of “commercial” and “international” arecontained in a footnote to article 1 and in paragraph 3 of article 1, respectively. While the Model Law is restricted to international and commercial cases, the stateenacting the Model Law may consider extending it to domestic, commercial disputesand some non-commercial ones (see footnote 1 to article1).
The Model Law should be regarded as a balanced and discrete set of
provisions and could be enacted as a single statute or as a part of a law on disputesettlement. A/CN.9/514 E. Structure of the Model Law
The Model Law contains definitions, procedures, and guidelines on related issues
based upon the importance of party control over the process and outcome.
Article 1 delineates the scope of the Model Law and defines conciliation generally
and its international application specifically. These are the types of provisions that wouldgenerally be found in legislation to determine the range of matters the Model Law isintended to cover. Article 2 provides guidance on the interpretation of the Model Law. Article 3 expressly provides that all the provisions of Model Law may be varied by partyagreement except for article 2 and paragraph 3 of article 7.
Articles 4 through 12 cover procedural aspects of the conciliation. These provisions
will have particular application to the circumstances where the parties have not adoptedrules governing a conciliation, and thus are designed to be in the nature of defaultprovisions. They are also intended to assist parties in dispute that may have defined disputeresolution processes in their agreement, in this context acting as a supplement to theiragreement.
The remaining provisions of the Model Law (articles 12-15) address post-
conciliation issues to avoid uncertainty resulting from an absence of statutory provisionsgoverning these issues. Assistance from UNCITRAL Secretariat
In line with its training and assistance activities, the UNCITRAL Secretariat may
provide technical consultations for Governments preparing legislation based on the ModelLaw. UNCITRAL provides technical consultation for Governments considering legislationbased on other UNCITRAL model laws, or considering adhesion to one of the internationaltrade law conventions prepared by UNCITRAL.
Further information concerning the Model Law as well as the Guide and other model
laws and conventions developed by UNCITRAL, may be obtained from the Secretariat atthe address below. The Secretariat welcomes comments concerning the Model Law and theGuide, as well as information concerning enactment of legislation based on the Model Law.
UNCITRAL SecretariatUnited Nations Vienna International CentreP.O. Box 500A-1400, Vienna, Austria
A/CN.9/514 II. Article-by-article remarks Article 1. Scope of application
This Law applies to international1 commercial2 conciliation.
For the purposes of this Law, “conciliation” means a process, whether
referred to by the expression conciliation, mediation or an expression of similarimport, whereby parties request a third person, or a panel of persons, to assist themin their attempt to reach an amicable settlement of their dispute arising out of orrelating to a contractual or other legal relationship. The conciliator or the panel ofconciliators does not have the authority to impose upon the parties a solution to thedispute.
(a) The parties to an agreement to conciliate have, at the time of the
conclusion of that agreement, their places of business in different States; or
(b) The State in which the parties have their places of business is different
The State in which a substantial part of the obligations of the
commercial relationship is to be performed; or
The State with which the subject matter of the dispute is most
If a party has more than one place of business, the place of business is
that which has the closest relationship to the agreement to conciliate;
(b) If a party does not have a place of business, reference is to be made to
This Law also applies to a commercial conciliation when the parties agree
that the conciliation is international or agree to the applicability of this Law.
The parties are free to agree to exclude the applicability of this Law.
1 States wishing to enact this Model Law to apply to domestic as well as international
conciliation may wish to consider the following changes to the text: […] [Note by theSecretariat: this footnote recording the changes to be brought to the text of the Model Lawby States enacting it for domestic as well as international conciliation will be completedafter final consideration and adoption of the Model Law by the Commission]
2 The term “commercial” should be given a wide interpretation so as to cover matters arising
from all relationships of a commercial nature, whether contractual or not. Relationships ofa commercial nature include, but are not limited to, the following transactions: any tradetransaction for the supply or exchange of goods or services; distribution agreement;commercial representation or agency; factoring; leasing; construction of works; consulting;engineering; licensing; investment; financing; banking; insurance; exploitation agreementor concession; joint venture and other forms of industrial or business cooperation; carriageof goods or passengers by air, sea, rail or road. A/CN.9/514
Subject to the provisions of paragraph (8) of this article, this Law applies
irrespective of the basis upon which the conciliation is carried out, includingagreement between the parties whether reached before or after a dispute has arisen,an obligation established by law, or a direction or suggestion of a court, arbitraltribunal or competent governmental entity.
Cases where a judge or an arbitrator, in the course of a court or arbitral
proceeding, attempts to facilitate a settlement; and
The purpose of article 1 is to delineate the scope of application of the Model Law by
expressly restricting it to international commercial conciliation. Article 1 defines the terms“conciliation” and “international” and provides the means of determining a party’s place ofbusiness where more than one place of business exists or a party has no place of business.
In preparing the Model Law, it was generally agreed that the application of the
uniform rules should be restricted to commercial matters (A/CN.9/468, para. 21;A/CN.9/485, paras. 113-116; A/CN.9/487, para. 89). The term “commercial” is defined ingeneral terms in footnote 2 to article 1(1). The purpose of the footnote is to be inclusive andbroad and to overcome any technical difficulties that may arise in national law as to whichtransactions are commercial. It was inspired by the definition set out in the footnote toarticle 1 of the UNCITRAL Model Law on International Commercial Arbitration. No strictdefinition of “commercial” is provided in the Model Law, the intention being that the termbe interpreted broadly so as to cover matters arising from all legal relationships of acommercial nature, whether contractual or not. Footnote 1 provides an illustrative list ofrelationships that are to be considered commercial, thus emphasizing the width of thesuggested interpretation and indicating that the test is not based on what the national lawmay regard as “commercial”. This may be particularly useful for those countries where adiscrete body of commercial law does not exist and as between countries in which such adiscrete law exists, the footnote may play a harmonizing role. In certain countries, the useof footnotes in a statutory text might not be regarded as acceptable legislative practice. National authorities enacting the Model Law might thus consider the possible inclusion ofthe text of the footnote in the body of the enacting legislation itself.
As originally drafted the place of conciliation was one of the main elements
triggering the application of the Model Law. In drafting the Model Law however, theCommission agreed that this approach might be inconsistent with current practice. Sinceparties often did not formally designate a place of conciliation and since, as a practicalmatter, the conciliation could occur in several places, it was believed to be problematic touse the somewhat artificial idea of the place of conciliation as the primary basis fortriggering the application of the Model Law. For these reasons, the Model Law does notprovide an objective rule for determining the place of conciliation (A/CN.9/506 para. 21).
Paragraph 2 of article 1 sets out the elements for the definition of conciliation.
The definition takes into account the existence of a dispute, the intention of theparties to reach an amicable settlement and the participation of an impartial andindependent third person or persons that assists the parties in an attempt to reach anamicable settlement. The intent is to distinguish conciliation, on the one hand, frombinding arbitration and, on the other hand, from mere negotiations between theparties or their representatives. The words “and does not have the authority toimpose upon the parties a binding solution to the dispute” are intended to furtherclarify and emphasize the main distinction between conciliation and a process suchas arbitration (see A/CN.9/487, para. 101 and A/CN.9/WG.II/WP.115, remark 8). A/CN.9/514
Inclusion of the words “whether referred to by the expression conciliation,
mediation, or an expression of similar import” is intended to indicate that the ModelLaw applies irrespective of the name given to the process. The broad nature of thedefinition indicates that there was no intention to distinguish among styles orapproaches to mediation. The Commission intends that the word “conciliation”would express a broad notion of a voluntary process controlled by the parties andconducted with the assistance of a neutral third person or persons. Differentprocedural styles and techniques might be used in practice to achieve settlement of adispute, and different expressions might be used to refer to those styles andtechniques. In drafting the Model Law, the Commission intended that it shouldencompass all the styles and techniques that fall within the scope of article 1.
In principle, the Model Law only applies to international conciliation as defined in
paragraph 3 of article 1. Paragraph 3 establishes a test for distinguishing international casesfrom domestic ones. The requirement of internationality will be met if the parties to theconciliation agreement have their places of business in different states at the time that theagreement was concluded or where the State in which either a substantial part of theobligations of the commercial relationship is to be performed or with which the subject-matter of the dispute is most closely connected differs from the State in which the partieshave their places of business. Paragraph 4 provides a test for determining a party’s place ofbusiness where the party either has more than one place of business or where the party hasno place of business. In the first case, the place of business is that bearing the closestrelationship with the agreement to conciliate. Factors that may indicate that one place ofbusiness bears a close relationship with the agreement to conciliate may include; that asubstantial part of the obligations of the commercial relationship that is the subject of thedispute is to be performed at that place of business, or that the subject-matter of the disputeis most closely connected to that place of business. Where a party has no place of business,reference is made to the party’s habitual residence.
The Model Law should not be interpreted as encouraging enacting States to limit its
applicability to international cases. The Commission, in adopting the Model Law, agreedthat the acceptability of the Model Law would be enhanced if no attempt were made tointerfere with domestic conciliation (A/CN.9/487, para. 106). However, the Model Lawcontains no provision that would, in principle, be unsuitable for domestic cases(A/CN.9/506, para.16; A/CN.9/116, para. 36). An enacting State may in the implementinglegislation, extend the applicability of the Model Law to both domestic and internationalconciliation as provided in footnote 1 to paragraph 1 (A/CN.9/506, para.17). Also,paragraph 5 allows the parties to agree to the application of the Model Law (ie. opt-in to theModel Law) to a commercial conciliation even if the conciliation is not international asdefined in the Model Law. Despite the fact that the Model Law is expressly expressed to belimited to commercial conciliation, nothing in the Model Law should prevent an enactingState from extending the scope of the Model Law to cover conciliation outside thecommercial sphere. It should be noted that in some jurisdictions, particularly in federalStates, considerable difficulties might arise in distinguishing international trade fromdomestic trade (A/CN.9/506, para. 17).
Paragraph 6 allows parties to exclude the application of the Model Law.
Paragraph 6 may be used for example, where the parties to an otherwise domesticconciliation agree for convenience on a place of conciliation abroad withoutintending to make the conciliation “international”.
Paragraph 7, while recognizing that conciliation is a voluntary process based
on the agreement of the parties, also recognizes that some countries have takenmeasures to promote conciliation for example, by requiring the parties in certainsituations to conciliate or by allowing judges to suggest, or to require, that partiesconciliate before they continue with litigation. In order to remove any doubt about
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the application of the Model Law in all these situations, paragraph (7) provides thatthe Model Law applies irrespective of whether a conciliation is carried out byagreement between the parties or pursuant to a legal obligation or request by a court,arbitral tribunal or competent governmental entity. The Model Law does not dealwith such obligations or with the sanctions that may be entailed by failure to complywith them. Provisions on these matters depend on national policies that do not easilylend themselves to worldwide harmonization. It is suggested that, even if theenacting State does not require parties to conciliate, the provision shouldnevertheless be enacted because parties in the enacting State may commenceconciliation proceedings pursuant to a request by a foreign court, in which case theModel Law should also apply.
Paragraph (8) allows enacting States to exclude certain situations from the
sphere of application of the Model Law. Subparagraph (a) expressly excludes fromthe application of the Model Law any case where either a judge or arbitrator, in thecourse of adjudicating a dispute, undertakes a conciliatory process. This processmay be either at the request of the parties that are in dispute or in the exercise of thejudge’s prerogatives or discretion. This exclusion was considered necessary to avoidundue interference with existing procedural law. Another area of exclusion might beconciliations relating to collective bargaining relationships between employers andemployees given that a number of countries may have established conciliationsystems in the collective bargaining system which may be subject to particular policyconsiderations that might differ from those underlying the Model Law. A furtherexclusion could relate to a conciliation that is conducted by a judicial officer(A/CN.9/WG.II/WP.113/Add.1, footnote 5 and A/CN.9/WG.II/WP.115, remark 7). Given that such judicially conducted conciliation mechanisms are conducted undercourt rules, and that the Model Law is not intended to deal with the jurisdiction ofcourts of any state, it may be appropriate to also exclude these from the scope of theModel Law.
A/CN.9/WG.II/WP.115,remarks 1-13A/CN.9/WG.II/WP.116, paras. 23-32, 33-35 and 36
A/CN.9/WG.II/WP.113/Add.1, paras. 2-4 and footnotes 3- 7.
A/CN.9/485, paras. 108-109, 111-120 and paras. 123.124.
A/CN.9/WG.II/WP.110, paras. 83-85, 87- 90. A/CN.9/WG.II/WP.108, para. 11
A/CN.9/468, paras18-19A/CN.9/460, paras. 8-10
Article 2. Interpretation
In the interpretation of this Law, regard is to be had to its international
origin and to the need to promote uniformity in its application and theobservance of good faith.
Questions concerning matters governed by this Law which are not
expressly settled in it are to be settled in conformity with the general principleson which this Law is based. A/CN.9/514
Article 2 provides guidance for the interpretation of the Model Law by courts and
other national or local authorities with due regard to being given to its international origin. It was inspired by article 7 of the United Nations Convention on Contracts for theInternational Sale of Goods article 3 of the UNCITRAL Model Law on ElectronicCommerce article 8 of the UNCITRAL Model Law on Cross-Border Insolvency and article4 of the UNCITRAL Model Law on Electronic Signatures. (A/CN.9/506/para.49) Theexpected effect of article 2 is to limit the extent to which a uniform text, once incorporatedin local legislation would be interpreted only by reference to the concepts of local law. Thepurpose of paragraph (1) is to draw the attention of courts and other national authorities tothe fact that the provisions of the Model Law (or the provisions of the instrumentimplementing the Model Law) while enacted as part of domestic legislation and thereforedomestic in character, should be interpreted with reference to its international origin inorder to ensure uniformity in the interpretation of the Model Law in various countries. Inclusion of court decisions interpreting the Model Law in the UNCITRAL Case Law onUNCITRAL texts (CLOUT) will assist this development.
Paragraph 2 states that, where a question is not settled by the Model Law, reference
may be made to the general principles upon which it is based. As to the general principleson which the Model Law is based, the following non-exhaustive list may be considered:
to promote conciliation as a method of dispute settlement by providing
international harmonized legal solutions to facilitate conciliation which respect theintegrity of the process, promote active party involvement and autonomy by theparties;
to promote frank and open discussions of parties by ensuring confidentiality
of the process, limiting disclosure of certain information and facts raised in theconciliation in other subsequent proceedings, subject only to the need for disclosurerequired by law or for the purposes of implementation or enforcement;
to support developments and changes in the conciliation process arising from
technological developments such as electronic commerce. Article 3. Variation by agreement
Except for the provisions of article 2 and article 7, paragraph (3), the
parties may agree to exclude or vary any of the provisions of this Law.
With a view to emphasizing the prominent role given by the Model Law to the
principle of party autonomy, this provision has been isolated in a separate article. This type of drafting is also intended to bring the Model Law more closely in linewith other UNCITRAL instruments (e.g., article 6 of the United Nations Conventionon Contracts for the International Sale of Goods, article 4 of the UNCITRAL ModelLaw on Electronic Commerce, and article 5 of the UNCITRAL Model Law onElectronic Signatures). Expressing the principle of party autonomy in a separatearticle may further reduce the desirability of repeating that principle in the context ofa number of specific provisions of the Model Law (A/CN.9/WG.II/WP.115, remark14). Article 3 promotes the autonomy of the parties by leaving to them almost all
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matters that can be set by agreement. Article 2, regarding interpretation of the ModelLaw and article 7(3) concerning the fair treatment of the parties are matters that arenot subject to the principle of party autonomy.
A/CN.9/WG.II/WP.116, para.37A/CN.9/WG.II/WP.110, para.87
Article 4. Commencement of conciliation proceedings3
Unless otherwise agreed by the parties, the conciliation proceedings in
respect of a particular dispute that has arisen commence on the day on which theparties to the 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 theinvitation was sent, or within such other period of time as specified in theinvitation, the party may elect to treat this as a rejection of the invitation toconciliate.
Article 4 addresses the question of when a conciliation proceeding can be
understood to have commenced. The Commission, in adopting the Model Law,agreed that paragraph (1) of this article should be harmonized with paragraph (7) ofarticle 1. This was done to accommodate the fact that a conciliation might be carriedout as a consequence of a direction or request by a dispute settlement body such as acourt or arbitral tribunal. Article 4 provides that a conciliation commences when theparties to a dispute agree to engage in such a proceeding. The effect of this provisionis that, even if there exists a provision in a contract requiring parties to engage inconciliation or a court or arbitral tribunal directs parties to engage in conciliationproceedings, such proceedings will not commence until the parties agree to engagein such proceeding. The Model Law does not deal with any such requirement orwith the consequences of the parties’ or a party’s failure to act as required.
The general reference to the “day on which the parties to the dispute agree to
engage in conciliation proceedings” is designed to cover the different methods bywhich parties may agree to engage in conciliation proceedings. Such methods mayinclude, for example, the acceptance by one party of an invitation to conciliate madeby the other party, or the acceptance by both parties of a direction or suggestion toconciliate made by a court, arbitral tribunal or a competent government entity.
By referring in paragraph 1 of article 4 to an “agree[ment] to engage in
conciliation proceedings” the Model Law leaves the determination of when exactly
3 The following text is suggested for States that might wish to adopt a provision on the
Article X. Suspension of limitation period (1)
When the conciliation proceedings commence, the running of the limitation period
regarding the claim that is the subject matter of the conciliation is suspended. (2)
Where the conciliation proceedings have terminated without a settlement, the
limitation period resumes running from the time the conciliation ended without asettlement. A/CN.9/514
this agreement is concluded to laws outside Model Law. Ultimately, the question ofwhen the parties reached agreement will be a question of evidence (A/CN.9/506,para. 97).
Paragraph 2 provides that a party that has invited another to engage in
conciliation, may treat this invitation as having been rejected if the other party failsto accept that invitation within thirty days from when the invitation was sent. Thetime period to reply to an invitation to conciliate has been set at thirty days asprovided for in the UNCITRAL Conciliation Rules or any other time as specified inthe invitation. This provides maximum flexibility and respects the principle of partyautonomy over the procedure to be followed in commencing conciliation.
Article 4 does not address the situation where an invitation to conciliate is
withdrawn after it has been made. Although a proposal was made during thepreparation of the Model Law to include a provision specifying that the partyinitiating the conciliation is free to withdraw the invitation to conciliate until thatinvitation has been accepted, it was decided that such a provision would probably besuperfluous in view of the possibility offered to both parties to terminate conciliationproceedings at any time under subparagraph (d) of article 12. Also inclusion of aprovision regarding the withdrawal of an invitation to conciliate could undulyinterfere with the law of contract formation by introducing new rules as to theconditions under which an offer or an acceptance to conciliate might be withdrawn(A/CN.9/WG.II/WP.115, remark 17).
The footnote to the title of article 4 (footnote 3) includes text for optional use by
States that wish to enact it. The Working Group discussed the question of whether it wouldbe desirable to prepare a uniform rule providing that the initiation of conciliationproceedings would interrupt the running of limitation and prescription periods concerningthe claims involved in the conciliation. Strong opposition was expressed to the retention ofthis article in the main text, principally on the basis that the issue of the limitation periodraised complex technical issues and would be difficult to incorporate into nationalprocedural regimes which took different approaches to the issue. Moreover, it wassuggested that the provision was unnecessary since other avenues were available to theparties to protect their rights (for example, by agreeing to extend the limitation period or bycommencing arbitral or court proceedings for the purpose of interrupting the running of thelimitation period). Equally strong argument was presented in favour of inclusion of the texton the basis that preserving the parties’ rights during a conciliation would enhance theattractiveness of conciliation. It was said that an agreed extension of the limitation periodwas not possible in some legal systems and providing a straightforward and efficient meansto protect the rights of the parties was preferable to leaving the parties with the option ofcommencing arbitral or court proceedings. Ultimately, it was agreed to include theprovision as a footnote to article 4 for optional use by states that wished to enact it(A/CN.9/506, paras. 93-94).
A/CN.9/506, paras. 53-56 and 93-110A/CN.9/487, paras. 110 - 115
A/CN.9/514 Article 5. Number of conciliators
There shall be one conciliator, unless the parties agree that there shall be a panelof conciliators.
Unlike in arbitration where the default rule is three arbitrators, conciliation practice
shows that parties usually wish to have the dispute handled by one conciliator. For thatreason, the default rule in article 6 is one conciliator. A number of private internationalarbitration rules provide a default rule of one arbitrator. Article 6. Appointment of conciliators
In conciliation proceedings with one conciliator, the parties shall endeavour
to reach agreement on the name of the sole conciliator.
In conciliation proceedings with two conciliators, each party appoints one
In conciliation proceedings consisting of three or more conciliators, each
party appoints one conciliator and shall endeavour to reach agreement on thename of the other conciliators.
Parties may seek the assistance of an appropriate institution or person in
connection with the appointment of conciliators. In particular:
A party may request such an institution or person to recommend
names of suitable persons to act as conciliator; or
The parties may agree that the appointment of one or more
conciliators be made directly by such an institution or person.
In recommending or appointing individuals to act as conciliator, the
institution or person shall have regard to such considerations as are likely tosecure the appointment of an independent and impartial conciliator and, withrespect to a sole or third conciliator, shall take into account the advisability ofappointing a conciliator of a nationality other than the nationalities of the parties.
When a person is approached in connection with his or her possible
appointment as a conciliator, he or she shall disclose any circumstances likely togive rise to justifiable doubts as to his or her impartiality or independence. Aconciliator, from the time of his or her appointment and throughout theconciliation proceedings, shall without delay disclose any such circumstances tothe parties unless they have already been informed of them by him or her.
The intent of article 6 is to encourage the parties to agree on the selection of a
conciliator. The advantage of the parties first endeavoring to mutually agree on aconciliator is that this approach respects the consensual nature of conciliation proceedings
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and also provides parties with greater control and therefore confidence in the conciliationprocess. Although a suggestion was made, while preparing the Model Law, that, wherethere is more than one conciliator, the appointment of each conciliator should be agreed toby both parties, which would thereby avoid the perception of partisanship, the prevailingview was that the solution allowing each party to appoint a conciliator was the morepractical approach. This approach allows for speedy commencement of the conciliationprocess and might foster settlement in the sense that the two party-appointed conciliators,while acting independently and impartially, would be in a better position to clarify thepositions of the parties and thereby enhance the likelihood of settlement. When three ormore conciliators are to be appointed, the conciliator other than the two party-appointedconciliators should, in principle, be appointed by agreement of the parties. This shouldfoster greater confidence in the conciliation process.
When no agreement may be reached on a conciliator, reference has to be had to an
institution or a third person. Subparagraphs (a) and (b) of paragraph (4) provide that thatinstitution or person may simply provide names of recommended conciliators or, byagreement of the parties, directly appoint conciliators. Paragraph (5) sets out someguidelines for that person or institution to follow in making recommendations orappointments. These guidelines seek to foster the independence and impartiality of theconciliator.
Paragraph 6 obliges a person who is approached to act as a conciliator to disclose
any circumstance likely to raise justifiable doubts as to his or her impartiality orindependence. This obligation is stated to apply not only from the time that the person isapproached but also throughout the conciliation. A suggestion was made that the provisionaddress the consequences that might result from failure to make such a disclosure, forexample by expressly stating that failure to make such disclosure should not result innullification of the conciliation process. However, the prevailing view was that theconsequences of failure to disclose such information should be left to the provisions of lawin the enacting State other than the enactment of the Model Law (A/CN.9/506, para.65). Article 7. Conduct of conciliation
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.
Failing agreement on the manner in which the conciliation is to be
conducted, the conciliator or the panel of conciliators may conduct theconciliation proceedings in such a manner as the conciliator or the panel ofconciliators considers appropriate, taking into account the circumstances of thecase, any wishes that the parties may express and the need for a speedysettlement of the dispute.
In any case, in conducting the proceedings, the conciliator or the panel of
conciliators shall seek to maintain fair treatment of the parties and, in so doing,shall take into account the circumstances of the case. A/CN.9/514
The conciliator may, at any stage of the conciliation proceedings, make
proposals for a settlement of the dispute.
Paragraph (1) of article 7 stresses that the parties are free to agree on the manner in
which the conciliation is to be conducted. It was derived from Article 19 of theUNCITRAL Model Law on International Commercial Arbitration.
Paragraph (2) recognizes the role of the conciliator who, while observing the will of
the parties may shape the process as he or she considers appropriate.
It should be noted that whilst the Model Law does not set out a standard of conduct
to be applied by a conciliator, paragraph (3) provides that the conciliator or panel ofconciliators seek to maintain fair treatment of the parties by reference to the particularcircumstances of the case. Some concern was expressed that the inclusion of a provisiongoverning the conduct of the conciliation could have the unintended effect of invitingparties to seek annulment of the settlement agreement by alleging unfair treatment. However, the prevailing view was that the guiding principles should be retained in the bodyof the legislative provisions to the effect of providing guidance regarding conciliation,particularly for less experienced conciliators. (A/CN.9/506, para.70). The reference inparagraph (3) to maintaining fair treatment of the parties is intended to govern theconciliation process and not the settlement agreement.
Conciliation rules often contain principles that should guide the conciliator in
conducting the proceedings. For example, article 7 of the UNCITRAL Conciliation Rulesstates as follows:
The conciliator assists the parties in an independent and impartial manner in
their attempt to reach an amicable settlement of their dispute.
The conciliator will be guided by principles of objectivity, fairness and
justice, giving consideration to, among other things, the rights and obligations of theparties, the usages of the trade concerned and the circumstances surrounding thedispute, including any previous business practices between the parties.
The conciliator may conduct the conciliation proceedings in such a manner
as he considers appropriate, taking into account the circumstances of the case, thewishes the parties may express, including any request by a party that the conciliatorhear oral statements, and the need for a speedy settlement of the dispute.
The conciliator may, at any stage of the conciliation proceedings, make
proposals for a settlement of the dispute. Such proposals need not be in writing andneed not be accompanied by a statement of the reasons therefor”.
Some national laws have included some of these guiding principles in their laws onconciliation. Given the different approaches to conciliation, the focus of the process will notalways be the same. In order to encompass that variety, the text requires the conciliator to“take into account the circumstances of the case”. The Working Group agreed that, whileother provisions of article 7 might be subject to contrary agreement between the parties,paragraph (3) should be regarded as setting a minimum standard. Thus, parties are notallowed to agree on a different standard of conduct to be followed by conciliators. To thisend, an exception to the general application of Article 3 has been made with respect toparagraph 3 of Article 7.
Paragraph (4) clarifies that a conciliator may, at any stage, make a proposal for
settlement. Whether, to what extent, and at which stage the conciliator may make any such
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proposal will depend on many factors including the wishes of the parties and the techniquesthe conciliator considers most conducive to a settlement. Article 8. Communication between conciliator and parties
Unless otherwise agreed by the parties, the conciliator, the panel of conciliators
or a member of the panel may meet or communicate with the parties together or witheach of them separately.
Separate meetings between the conciliator and the parties are, in practice, so usual
that a conciliator is presumed to be free to use this technique, save for any expressrestriction agreed to by the parties. Some states have included this principle in their nationallaws on conciliation by providing that a conciliator is allowed to communicate with theparties collectively or separately. The purpose of this provision is to put this issue beyonddoubt.
The conciliator should afford the parties equal treatment, which, however, is not
intended to mean that equal time should necessarily be devoted for separate meetings witheach party. The conciliator may explain to the parties in advance that there may be timediscrepancies, both real and imagined, which should not be construed as other than the factthat the conciliator is taking time to explore all issues, interests and possibilities forsettlement.
A/CN.9/506, para. 76. A/CN.9/487, para. 128-129.
A/CN.9/WG.II/WP.110, para. 93A/CN.9/WG.II.113/Add.1, para 6
Article 9. Disclosure of information between the parties
When the conciliator, the panel of conciliators or a member of the panel
receives information concerning the dispute from a party, the conciliator, the panel ofconciliators or a member of the panel may disclose the substance of that informationto the other party. However, when a party gives any information to the conciliator, thepanel of conciliators or a member of the panel subject to a specific condition that it bekept confidential, that information shall not be disclosed to the other party. A/CN.9/514
As its title suggests, Article 9 is limited to disclosure of information as between the
parties. With respect to disclosure of information to third parties it was widely agreed thatthe Model Law include a provision expressing a duty of confidentiality (see Article 10). Article 9 expresses the principle that, whatever information that a party gives to aconciliator, that information may be disclosed to the other party. It provides an approachconsistent with established practice in many countries as reflected in article 10 of theUNCITRAL Conciliation Rules. The intent is to foster open and frank communication ofinformation between parties and, at the same time, to preserve the parties’ rights tomaintain confidentiality. The role of the conciliator is to cultivate a candid exchange ofinformation regarding the dispute. Such disclosure fosters the confidence of both parties inthe conciliation. However, the principle of disclosure is not absolute, in that the conciliatorhas the freedom, but not the duty, to disclose such information to the other party. Indeedthe conciliator has a duty not to disclose a particular piece of information when the partythat gave the information to the conciliator made it subject to a specific condition that it bekept confidential. This approach is justified because the conciliator imposes no bindingdecision on the parties. An earlier suggestion requiring that the party giving the informationgive consent before any communication of that information may be given to the other partywas rejected. It was considered that this would be overly formalistic, inconsistent withestablished practice in many countries and likely to inhibit the entire conciliation process.
A broad notion of “information” is preferred in the context of this statutory rule.
It is intended to cover all relevant information communicated by a party to the conciliator. The notion of “information”, as used in this article, should be understood as not onlycovering communications that occurred during the conciliation but also communicationsthat took place before the actual commencement of the conciliation.
A/CN.9/506, paras. 77-82. A/CN.9/487, paras. 130-134.
A/CN.9/WG.II/WP.110, paras. 95 and 96.
A/CN.9/WG.II/WP.108, paras. 58-60A/CN.9/WG.II/WP.113/Add.1, para.6. Article 10. Duty of confidentiality
Unless otherwise agreed by the parties, all information relating to the
conciliation proceedings shall be kept confidential, except where disclosure isrequired under the law or for the purposes of implementation or enforcement of asettlement agreement.
In keeping with article 14 of the UNCITRAL Conciliation Rules, support was
expressed for the inclusion of a general rule of confidentiality applying to the conciliatorand to the parties. (A/CN.9/506, para. 86) A provision on confidentiality is important as theconciliation will be more appealing if parties can have confidence that the conciliator willnot take sides or disclose their statements, particularly in the context of other proceedings. The provision is drafted broadly referring to “all information relating to the conciliationproceedings” to cover not only information disclosed during the conciliation proceedingsbut also to cover the substance and the result of these proceedings as well as mattersrelating to a conciliation that occurred before the agreement to conciliate was reachedincluding, for example, discussions concerning the desirability of conciliation, the terms ofan agreement to conciliate, the choice of conciliators, an invitation to conciliate and theacceptance or rejection of such an invitation. The phrase “all information relating to the
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conciliation proceedings” was supported because it reflected a tried and tested formula setout in article 14 of the UNCITRAL Conciliation Rules.
Article 10 is expressly subject to party autonomy to meet concerns expressed that it
might be inappropriate to impose upon the parties a rule that would not be subject to partyautonomy and could be very difficult, if not impossible, to enforce. This reinforces theprinciple objective of the Model Law that is to respect party autonomy and also to provide aclear rule to guide parties in the absence of contrary agreement.
The rule is also subject to express exceptions, namely where disclosure is required
by law, such as an obligation to disclose evidence of a criminal offence, or where disclosureis required for the purposes of implementation or enforcement of a settlement agreement. Although the Working Group initially considered including a list of specific exceptions itwas strongly felt that listing exceptions in the text of the Model Law might raise difficultquestions of interpretation, in particular as to whether the list should be regarded asexhaustive. The Working Group agreed that an illustrative and non-exhaustive list ofpossible exceptions to the general rule on confidentiality would more appropriately beprovided in the Guide to Enactment. Examples of such laws may include laws requiring theconciliator or parties to reveal information if there is a reasonable threat that a person willsuffer death or substantial bodily harm if the information is not disclosed, laws requiringdisclosure if it is in the public interest. For example to alert the public about a health orenvironmental or safety risk.
A/CN.9/506, paras.83-86A/CN.9/487; paras. 130-134
Article 11. Admissibility of evidence in other proceedings
Unless otherwise agreed by the parties, a party that participated in the
conciliation proceedings or a third person, including a conciliator, shall not inarbitral, judicial or similar proceedings rely on, introduce as evidence or givetestimony or evidence regarding, any of the following:
An invitation by a party to engage in conciliation proceedings or
the fact that a party was willing to participate in conciliation proceedings;
Views expressed or suggestions made by a party to the conciliation
in respect of a possible settlement of the dispute;
Statements or admissions made by a party in the course of the
The fact that a party to the conciliation had indicated its
willingness to accept a proposal for settlement made by the conciliator;
A document prepared solely for purposes of the conciliation
Paragraph (1) of this article applies irrespective of the form of the
information or evidence referred to therein. A/CN.9/514
The disclosure of the information referred to in paragraph (1) of this
article shall not be ordered by an arbitral tribunal, court or other competentgovernmental authority and, if such information is offered as evidence incontravention of paragraph (1) of this article, that evidence shall be treated asinadmissible. Nevertheless, such information may be disclosed or admitted inevidence to the extent required under the law or for the purposes ofimplementation or enforcement of a settlement agreement.
The provisions of paragraphs (1), (2) and (3) of this article apply whether
or not the arbitral, judicial or similar proceedings relate to the dispute that is orwas the subject matter of the conciliation proceedings.
Subject to the limitations of paragraph (1) of this article, evidence that is
otherwise admissible in arbitral or court proceedings does not becomeinadmissible as a consequence of having been used in a conciliation.
In conciliation proceedings, the parties may typically express suggestions and views
regarding proposals for a possible settlement, make admissions, or indicate theirwillingness to settle. If, despite such efforts, the conciliation does not result in a settlementand a party initiates judicial or arbitral proceedings, those views, suggestions, admissions orindications of willingness to settle might be used to the detriment of the party who madethem. This possibility of such a “spillover” of information may discourage parties fromactively trying to reach a settlement during conciliation proceedings, which would reducethe usefulness of conciliation (A/CN.9/WG.II/WP.108, para.18). Thus, Article 11 isdesigned to encourage frank and candid discussions in conciliation by prohibiting the use ofinformation listed in paragraph (1) in any later proceedings. The words “or a third person”are used to clarify that persons other than the party (for example, witnesses or experts) whoparticipated in the conciliation proceedings are also bound by paragraph (1).
The provision is needed in particular if the parties have not agreed on a provision
such as that contained in article 20 of the UNCITRAL Conciliation Rules which providesthat the parties must not “rely on or introduce as evidence in arbitral or judicial proceedings[…] :
Views expressed or suggestions made by the other party in respect of a
Admissions made by the other party in the course of the conciliation
The fact that the other party had indicated his willingness to accept a proposal
for settlement made by the conciliator.”
However even if the parties have agreed on a rule of that type, the legislative
provision is useful because, at least under some legal systems, the court may not give fulleffect to agreements concerning the admissibility of evidence in court proceedings.
In view of the general rule contained in Article 3, the view was expressed that the
opening words of Article 11 “unless otherwise agreed by the parties” were superfluous. However, the prevailing view was that maintaining those words would better reflect thefunction of the rule in paragraph (1) as a default rule of conduct for the parties(A/CN.9/506, para.102). A/CN.9/514
The approach in this article is designed to eliminate any uncertainty as to whether
the parties may agree not to use as evidence in arbitral or judicial proceedings certain factsthat occurred during the conciliation. The Model Law aims at preventing the use of certaininformation in subsequent judicial or arbitral proceedings regardless of whether the partieshave agreed to a rule such as that contained in article 20 of the UNCITRAL ConciliationRules. Where the parties have not agreed upon a contrary rule, the Model Law providesthat the parties shall not rely in any subsequent arbitral or judicial proceedings on evidenceof the types specified in the model provisions. The specified evidence would then beinadmissible in evidence and the arbitral tribunal or the court could not order disclosure.
Paragraph (2) provides that the prohibition in article 11 is intended to apply to the
specified information, for example, regardless of whether they appear in a document ornot.
Paragraph (3) provides that an arbitral tribunal or court shall not order the disclosure
of information referred to in paragraph (1) unless such disclosure is permitted or requiredunder the law governing the arbitral or judicial proceedings. This provision was considerednecessary to properly clarify and reinforce paragraph (1). In order to achieve the purpose ofpromoting candor between the parties engaged in a conciliation, they must be able to enterinto the conciliation knowing the scope of the rule and that it will be applied. Paragraph (3)expresses this principle by restricting the rights of courts, arbitral tribunal or governmententities from ordering disclosure of such information and by requiring such bodies to treatany such information offered as evidence as being inadmissible. There may be situations,however, where evidence of certain facts would be inadmissible under article 11, but theinadmissibility would have to be overridden by an overwhelming need to accommodatecompelling reasons of public policy. For example: the need to disclose threats made by aparticipant to inflict bodily harm or unlawful loss or damage; where a participant attemptsto use the conciliation to plan or commit a crime; where evidence is needed to establish ordisprove an allegation of professional misconduct based on the conduct occurring during aconciliation; where evidence is needed in a proceeding in which fraud or duress is in issueregarding the validity or enforceability of an agreement reached by the parties; wherestatements made during a conciliation shows a significant threat to public health or safety. The final sentence in paragraph (3) of Article 11 expresses such exceptions in a generalmanner and is in similar terms to the exception expressed with respect to the duty ofconfidentiality in article 10. Paragraph 4 extends the scope of application of paragraphs 1 to3 (inclusive) to apply not only to related subsequent proceedings but also to unrelatedsubsequent proceedings. Paragraph 5 makes it clear that all information that otherwisewould be admissible as evidence in a subsequent court or arbitral proceeding does notbecome inadmissible solely by reason of it being raised in an earlier conciliation proceeding(for example, in a dispute concerning a contract of carriage by goods by sea, a bill of ladingwould be admissible to prove the name of the shipper, notwithstanding its use in aconciliation). It is only certain statements made in conciliation proceedings (i.e. views,admissions, proposals and indications of willingness to settle) that are inadmissible, not anyunderlying evidence that gave rise to the statement. Thus evidence that is used inconciliation proceedings is admissible in any subsequent proceedings just as it would be ifthe conciliation had not taken place.
In some legal systems a party may not be compelled to produce in court proceedings
a document that enjoys a "privilege" - for example, a written communication between aclient and its attorney. The privilege may, however, be deemed lost if a party has relied onthe privileged document in a proceeding. Privileged documents may be presented inconciliation proceedings with a view to facilitating settlement. In order not to discouragethe use of privileged documents in conciliation, the enacting State may wish to considerincluding a uniform provision stating that the use of a privileged document in conciliationproceedings does not constitute a waiver of the privilege. A/CN.9/514
A/CN.9/506, paras.101-115A/CN.9/487 paras. 139-141
Article 12. Termination of conciliation
The conciliation proceedings are terminated:
By the conclusion of a settlement agreement by the parties, on the
By a written declaration of the conciliator or the panel of
conciliators, after consultation with the parties, to the effect that further efforts atconciliation are no longer justified, on the date of the declaration;
By a written declaration of the parties addressed to the conciliator
or the panel of conciliators to the effect that the conciliation proceedings areterminated, on the date of the declaration; or
By a written declaration of a party to the other party and the
conciliator or the panel of conciliators, if appointed, to the effect that theconciliation proceedings are terminated, on the date of the declaration.
The provision enumerates various circumstances in which conciliation proceedings
may be terminated. In subparagraph (a) the provision uses the expression “conclusion”instead of “signing” in order to better reflect the possibility of entering into a settlement byelectronic communications. Any enacting State that has not enacted the UNCITRALModel Law on Electronic Commerce should consider inclusion of a provision along thelines of article 6 of that instrument when enacting this Model Law. 4 (A/CN.9/506, para. 88). The first circumstance listed in subparagraph (a) is where the conciliation endssuccessfully, namely where a settlement agreement is reached. The second circumstance setout in subparagraph (b) allows the conciliator or panel of conciliators to bring theconciliation proceedings to an end, after consulting with the parties. Subparagraph (c)provides that both parties may declare the conciliation proceedings to be terminated andsubparagraph (d) allows one party to give such notice of termination to the other party andthe conciliator or panel of conciliators. As noted above in the context of article 4, theparties may be under an obligation to commence and participate in good faith inconciliation proceedings. Such an obligation may arise, for example, from an agreement ofthe parties entered into before or after the dispute arose, from a statutory provision or froma direction or request by a court. The sources of such an obligation differ from country tocountry and the Model Law does not deal with them. The Model Law also does not dealwith the consequences of failure by a party to comply with such an obligation (see above,para. 39).
4 Article 6 of the Model Law on Electronic Commerce provides in part that: “where the lawrequires information to be in writing, that requirement is met by a data message if theinformation contained therein is accessible so as to be usable for subsequent reference.”
A/CN.9/514
A/CN.9/506, paras. 87-91A/CN.9/487; paras. 135-136
A/CN.9/WG.II/WP.113/Add.1, para.6A/CN.9/WG.II/WP.110; paras. 95 – 96
C.f. Article 15 of the UNCITRAL Conciliation Rules
Article 13. Conciliator acting as arbitrator
Unless otherwis e agreed by the parties, the conciliator shall not act as an
arbitrator in respect of a dispute that was or is the subject of the conciliationproceedings or in respect of another dispute that has arisen from the samecontract or any related contract.
Article 13 reinforces the effect of article 11 by limiting the possibility of the
conciliator acting as arbitrator in respect of a dispute that was or is the subject of theconciliation proceedings or in respect of another dispute that has arisen from the samecontract or any related contract. The purpose of this article is to provide greater confidencein the conciliator and in conciliation as a method of dispute settlement. A party may bereluctant to strive actively for a settlement in conciliation proceedings if it has to take intoaccount the possibility that if the conciliation is not successful, the conciliator might beappointed as an arbitrator in subsequent arbitration proceedings.
In some cases, the parties might regard prior knowledge on the part of the arbitrator
as advantageous, particularly if the parties think that this knowledge would allow thearbitrator to conduct the case more efficiently. In these cases, the parties may actuallyprefer that the conciliator and not somebody else be appointed as an arbitrator in thesubsequent arbitral proceedings. The provision poses no obstacle to the appointment of theformer conciliator provided the parties depart from the rule by agreement – for example, bya joint appointment of the conciliator to serve as an arbitrator. However in some cases theremay be ethical considerations suggesting that the conciliator should decline to act.
The provision applies to either “a dispute that was or is the subject of the
conciliation proceedings” or “in respect of another dispute that has arisen from the samecontract or any related contract”. The first limb extends the application of the provision toboth past and ongoing conciliations. The second limb extends the scope of the article tocover disputes arising under contracts that are distinct but commercially and factuallyclosely related to the subject matter of the conciliation. Whilst the formulation is verybroad, determining whether a dispute raises issues relating to the main contract wouldrequire an examination of the facts of each case.
An earlier draft of the Model Law contained a provision dealing with the situation
where an arbitrator acts as a conciliator. It was noted that such a provision would relate tothe functions and competence of an arbitrator, and to arbitration practices that differ fromcountry to country and are influenced by legal and social traditions. There is no settledpractice on the question of an arbitrator acting as conciliator and some practice notessuggest that the arbitrator should exercise caution before suggesting or taking part inconciliation proceedings relating to the dispute. It was considered inappropriate to attemptunifying these practices through uniform legislation. Although the provision was deleted,the Commission agreed that the Model Law was not intended to indicate whether or not anarbitrator could act or participate in conciliation proceedings relating to the dispute and that
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this was a matter left to the discretion of the parties and arbitrators acting within the contextof applicable law and rules (A/CN.9/506, para.132).
An earlier draft also restricted a conciliator from acting as representative or counsel
of either party subject to contrary party agreement. It was suggested that in somejurisdictions, even if the parties agreed to the conciliator acting as a representative orcounsel of any party such an agreement would contravene ethical guidance to be followedby conciliators and could also be perceived as undermining the integrity of conciliation as amethod for dispute settlement. A proposal to amend the provision so as not to leave thisquestion to party autonomy was rejected on the basis that it undermined the principle ofparty autonomy and failed to recognize that, in some jurisdictions where ethical rulesrequired a conciliator not to act as representative or counsel, the conciliator would alwaysbe free to refuse to act in that capacity. On this basis, it was agreed that the provisionshould be silent on the question whether a conciliator could act as representative or counselof any of the parties (A/CN.9/506, para.117).
A/CN.9/WG.II/WP.110 footnote 30A/CN.9/WG.II/WP.108; paras.29-33
A/CN.9/468; paras. 31-37A/CN.9/485; paras. 148-153A/CN.9/487; paras. 142-145A/CN.9/506, paras. 117-123 and 130. Article 14. Resort to arbitral or judicial proceedings
Where the parties have agreed to conciliate and have expressly undertaken not
to initiate during a specified period of time or until a specified event has occurredarbitral or judicial proceedings with respect to an existing or future dispute, such anundertaking shall be given effect by the arbitral tribunal or the court until the terms ofthe undertaking have been complied with.
A party may nevertheless initiate arbitral or judicial proceedings where, in its
sole discretion, it considers such proceedings necessary to preserve its rights. Initiation of such proceedings is not of itself to be regarded as a waiver of theagreement to conciliate or as a termination of the conciliation proceedings.
In the preparation of the Model Law, it was agreed that the text should contain a rule
preventing parties from initiating an arbitral or judicial proceeding while conciliation waspending. Paragraph 1 deals with the effect of the agreement of the parties to engage inconciliation. The consequence of that provision is that the court or arbitral tribunal will beobliged to bar litigation or an arbitration from proceeding if that would be in violation ofthe agreement of the parties.
Paragraph 2 of article 14 deals with the issue whether, and to what extent, the party
may initiate court or arbitral proceedings during the course of conciliation proceedings. Theidea behind this provision is to allow the parties to initiate arbitral or court proceedings onlyin circumstances where, in the opinion of the party initiating such proceedings, such actionis “necessary for preserving its rights’. Possible circumstances that may require initiationof arbitral or court proceedings may include the necessity to seek interim measures ofprotection or to avoid the expiration of the limitation period. This provision would need tobe integrated with the requirements of existing procedural and substantive law in theenacting State. A/CN.9/514
A/CN.9/506, paras. 125-129A/CN.9/487, paras. 147-150.
A/CN.9/485, paras. 155-158A/CN.9/468, paras 45-49
Article 15. Enforceability of settlement agreement5
If the parties reach and sign an agreement settling a dispute, that
settlement agreement is binding and enforceable . [the enacting State inserts adescription of the method of enforcing settlement agreements or refers toprovisions governing such enforcement ].
Legislative solutions regarding the enforceability of settlements reached in
conciliation proceedings differ widely. Many practitioners have put forward the viewthat the attractiveness of conciliation would be increased if a settlement reachedduring a conciliation would, for the purposes of enforcement, be treated as orsimilarly to an arbitral award. Reasons given for introducing expedited enforcementusually aim to foster the use of conciliation and to avoid situations where a courtaction to enforce a settlement might take months or years to reach judgement.
Some States have no special provisions on the enforceability of such
settlements, with the result that they would be enforceable as any contract betweenthe parties. This understanding that conciliation settlements were enforceable ascontracts has been restated in some laws on conciliation.
In some national legislation, parties who had settled a dispute are empowered
to appoint an arbitrator specifically to issue an award based on the agreement of theparties. For example, in China, where conciliation may be conducted by an arbitraltribunal, legislation provides that “if conciliation leads to a settlement agreement, thearbitral tribunal shall make a written conciliation statement or make an arbitrationaward in accordance with the settlement agreement. A written conciliation statementand a written arbitration award shall have equal legal validity and effect.”(Arbitration Law of the People’s Republic of China, Article 51). In somejurisdictions, the status of an agreement reached following conciliation depends onwhether or not the conciliation took place within the court system and legalproceedings in relation to the dispute are on foot. For example, under Australianlegislation, agreements reached at conciliation held outside the court cannot beregistered with the court unless the proceedings are on foot whereas in court-basedconciliation schemes, a court may make orders in accordance with the settlementagreement and these orders have legal force and are enforceable as such.
Some legal systems provide for enforcement in a summary fashion if the
parties and their attorneys signed the settlement agreement and it contained astatement that the parties may seek summary enforcement of the agreement. Also,settlements might be the subject of expedited enforcement if, for example, thesettlement agreement was notarized or formalized by a judge or co-signed by thecounsel of the parties. For example, in Bermuda, legislation provides that “If the
5 When implementing the procedure for enforcement of settlement agreements, an enacting
State may consider the possibility of such a procedure being mandatory. A/CN.9/514
parties to an arbitration agreement which provides for the appointment of aconciliator reach agreement in settlement of their differences and sign an agreementcontaining the terms of settlement… the settlement agreement shall, for the purposesof its enforcement, be treated as an award on an arbitration agreement and may, byleave of the Court or a judge thereof, be enforced in the same manner as a judgementor order to the same effect, and where leave is so given, judgement may be entered interms of the agreement”(Bermuda, Arbitration Act 1986). Similarly in India, asettlement agreement which has been signed by the parties is final and binding onthe parties and persons claiming under them respectively and “shall have the samestatus and effect as if it is an arbitral award” (India, The Arbitration and ConciliationOrdinance, 1996, articles 73 and 74, respectively). However in some jurisdictions theenforceability of a settlement agreement reached during a conciliation will onlyapply if the settlement agreement was reached as part of an arbitration process. Forexample, in Hong Kong (Special Administrative Region of the People’s Republic ifChina), section 2C of the Arbitration Ordinance provides that “Where conciliationproceedings succeed and the parties make a written settlement agreement (whetherprior to or during arbitration proceedings), such agreement may be enforced by theCourt of First Instance as if it were an award, provided that the settlement agreementhas been made by the parties to an arbitration agreement”. This provision issupported by Order 73, rule 10 of the Rules of the High Court which applies theprocedure for enforcing arbitral awards, to the enforcement of settlement agreementsso that summary application may be made to the court and judgement may be enteredin terms of the agreement.
The text of the article is aimed at reflecting the smallest common denominator
between the various legal systems. Although the Working Group recognized that thetext was ambiguous, since it might be read in different languages and different legalsystems either as creating a high degree of enforceability or as merely referring tothe obvious fact that a settlement agreement could be made enforceable throughappropriate procedures, State were invited to submit official comments on the drafttext and the Secretariat held informal consultations regarding the feasibility ofimproving on the text. [Note by the Secretariat: paragraphs 77 to 81 are expected torequire a degree of redrafting as a result of the discussion at the 35 th Session of theCommission]
A/CN.9/506, paras. 38-48, 34-49 and 133-139A/CN.9/487; paras. 153-159
A/CN.9/WG.II/WP.110 paras 105-112A/CN.9/WG.II/WP.113/Add.1, para.9
A/CN.9/485, para.159. A/CN.9/468; paras 38-40
A/CN.9/WG.II/WP.108 para. 16 and paras 34-42
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