On 1 January 2014 the new ICC Mediation Rules will enter into force and replace the ICC Amicable Dispute Resolution (ADR) Rules, which have been in force since 1 July 2001. The Mediation Rules have been prepared by the ICC Commission on Arbitration and ADR through the work of the Consultative Task Force on the Revision of the ICC ADR Rules, Expertise Rules and Dispute Board Rules,1 whose members include dispute resolution practitioners and users from widely diverse legal and cultural traditions around the world. Officially launched in Paris on 4 December 2013, the ICC Mediation Rules will be administered by the ICC International Centre for ADR ('the Centre'), which since 2001 has administered over 180 cases under their predecessor, the ADR Rules.2

The Mediation Rules are accompanied by (i) a revised appendix dealing with fees and costs, (ii) a revised set of model clauses and (iii) a completely new document entitled Mediation Guidance Notes. Given the flexibility that is built into the Mediation Rules, the Mediation Guidance Notes are intended to provide parties, mediators and counsel with information and suggestions on how to take advantage of that flexibility in such a way as to organize mediation proceedings that take account of the parties' needs, their cultural and legal backgrounds and the particularities of the dispute.

The Mediation Rules and clauses are published alongside the ICC Arbitration Rules in hard copy (ICC Publication 865, available in several languages) and online on the ICC's website (www.iccwbo.org, which also contains additional information concerning ICC mediation) and in the ICC Dispute Resolution Library (www.iccdrl.com).

The revision process that led to the Mediation Rules began with the creation of the consultative task force at the end of 2011. Throughout, the task force remained faithful to the guiding principle that amendments should be made only if genuinely useful and necessary. Numerous draft documents were prepared, circulated for comments and discussed on various occasions and at the biannual plenary meetings of the Commission on Arbitration and ADR. The draft Mediation Rules, mediation clauses and Mediation Guidance Notes were unanimously approved by the Commission at its meeting in Paris on 23 May 2013 and subsequently by the ICC Executive Board in September 2013.

The principle objectives underlying the revision were threefold:

(i) better reflect the Centre's current practices in administering proceedings under the existing ICC ADR Rules, while maintaining flexibility;

(ii) update the Rules to reflect developments in ADR and mediation practice; and

(iii) where appropriate, make the new Rules and clauses consistent with the 2012 ICC Arbitration Rules.

This brief overview highlights the main changes made to the ICC ADR Rules as now embodied in the new Mediation Rules.

1. Name change

The first and most obvious difference between the ADR Rules and the Mediation Rules is the change of name. It reflects the fact that in over 90% of the cases conducted under the ADR Rules mediation was chosen by the parties as the settlement technique or became the settlement technique pursuant to the default mechanism foreseen in the ADR Rules. This in turn demonstrates that, over the last decade, mediation has become the most widely used settlement technique in amicable dispute resolution proceedings in an international context. The new name therefore more accurately describes how the Rules are used in practice and should increase their appeal to parties looking to mediate their international disputes.

Whilst mediation is the principal and default settlement technique, pursuant to Article 1(3) of the new Rules, the name change does not mean that other settlement procedures, such as conciliation, neutral evaluation or any combination of such procedures, are excluded. On the contrary,[Page7:] the new Rules have maintained the inherent flexibility of the ADR Rules and still allow parties to choose a settlement technique other than mediation if they consider it better suited to their needs.3

Consistent with the change of name, the term 'neutral' has been abandoned and replaced by 'mediator' throughout the Rules. If parties have agreed upon a settlement technique other than mediation, the term 'mediator' will be deemed to cover the neutral who conducts the chosen settlement procedure (Article 1(3)).

2. Entry into force and transition

The new ICC Mediation Rules will apply to all contracts signed after their entry into force on 1 January 2014. Given the change of name from ICC ADR Rules to ICC Mediation Rules, the transition provision found in Article 10(1) of the new Rules explains how the ICC will deal with referrals made under the ICC ADR Rules once the new ICC Mediation Rules have entered into force: an agreement referring to the ICC ADR Rules that has been made prior to the entry into force of the new ICC Mediation Rules will be deemed to be a referral to the ICC Mediation Rules once the latter have entered into force. However, if any party objects the Centre will apply the ICC ADR Rules. The Centre may therefore continue to administer a few cases under the ICC ADR Rules.

3. Commencement of proceedings

Proceedings under the ICC Mediation Rules can be commenced either when there is a pre-existing agreement to refer a dispute to the Rules (Article 2), or where one party is proposing mediation to the other (Article 3). In the latter case, as described below, the Centre can assist the parties in considering the proposal to mediate their dispute and support them in convening the mediation (Article 3(1)). In both cases, the Centre's role is not purely administrative: where parties come from very differing cultural backgrounds or have different or no experience of mediation, the Centre can play an especially important role in helping to bridge cultural gaps between the parties and make them equally informed.

Where mediation proceedings are based on a pre-existing agreement, it is necessary to define the date on which the proceedings are commenced as it is from this date that the Centre assumes certain duties and responsibilities. Article 2(5) provides that the proceedings commence on the date on which the Request for Mediation is received by the Centre. Article 2(6) deals with specific time issues in relation to tiered dispute resolution clauses, which commonly provide that neither party may move to the next step, such as arbitration or court litigation, until an agreed time period for settling the dispute by mediation has expired. Under this new provision, the starting point of the period reserved for the mediation is the acknowledgement by the Centre of the receipt of the Request for Mediation or the filing of the registration fee, whichever comes later. Consequently, it is no longer possible for a party to defeat the purpose of a multitiered clause by filing a Request for Mediation to trigger the running of the time period but then delaying payment of the filing fee and letting the time period expire without the mediation having been able to progress.

Article 3 deals with the commencement of proceedings when the parties have not reached a prior agreement to refer their dispute to mediation under the Rules. An important function of the Centre is to provide assistance where one party is interested in using mediation but is unsure how to obtain the agreement of the other party or parties. This can arise where parties come from different jurisdictions with different levels of familiarity and experience with mediation or other ADR procedures. After receiving a proposal from one party to use settlement procedures under the Rules, the Centre will first inform all other parties about the proposal and can then 'assist the parties in considering the proposal' (Article 3(1)). This language is deliberately broad and permissive, enabling the Centre to take such steps as it considers appropriate in all the circumstances. These steps might include holding joint or separate telephone calls with each party to answer questions and provide information about mediation or other settlement procedures under the Rules. Article 3(4) enables the Centre to end its work on the referral and close the file if no agreement has been reached by the parties to refer the dispute to the Rules within a reasonable period following receipt of the Request.

4. Flexibility and procedure

The new Rules do not prescribe how mediations should be conducted but are deliberately flexible in this respect. The principle of flexibility is further reflected in the fact that parties may agree to modify the provisions of the Rules as to the way the mediation or other settlement procedure should be conducted. The former ADR Rules required only the approval of the ICC International Centre for ADR for such modifications. Under the new Rules, the mediator's approval is also [Page8:] required if the parties agree on modifying the Rules after the confirmation or appointment of a mediator. This is explained by the fact that a mediator should not be required to engage in a process that is materially different from that which he or she initially agreed to.

Furthermore, the ICC International Centre for ADR, which is the only institution authorized to administer mediations and other settlement proceedings under the ICC Mediation Rules (Article 1(5)), may decide not to administer the proceedings if, in its discretion, it considers that the parties' modifications are not in the spirit of the Rules (Article 1(4)).

a) Place and language(s) of the mediation

In cross-border mediations, the place of physical meetings for the mediation and the language or languages to be used in the mediation can be important issues on which the parties may find it difficult to reach agreement. The new Rules set out to ensure that any disagreement between the parties over the place of physical meetings or the language does not become an insurmountable hurdle in bringing the parties to the negotiating table. Unlike the ADR Rules, the Mediation Rules allow for these issues to be decided by the Centre and not just by the mediator. This can avoid the need for the mediator to make a decision that might damage the mediator's relations with one or more of the parties early in the proceedings. In practice, the Centre will always first make all reasonable efforts to encourage the parties to reach agreement on these issues before making a decision itself. The new Article 4 places primary responsibility for this on the Centre. The Centre's current practice is to help the parties to reach agreement, but if no agreement can be reached the Centre has discretion under the new Rules to determine whether or not to make a decision itself or leave the decision to the mediator.

b) Selection of a mediator

The mediator may be jointly designated where there is agreement between the parties. In the absence of such agreement, the Centre will appoint the mediator. Article 5 now also codifies the Centre's long-standing practice of providing the parties, upon their request, with a list of potential mediators for a case, from which the parties can then select their preferred candidate for appointment by the Centre.

c) Conduct of the mediation

As already noted, the Rules do not prescribe how the mediation or other settlement technique should be conducted, which makes ICC mediation a very flexible process. The conduct of a mediation should be discussed and agreed between the parties and with the mediator, who must display fairness and impartiality when proposing the way forward and establishing the procedure (Articles 7(1) and 7(3)). The Mediation Guidance Notes are designed to help inform these discussions.

Article 7(2) records that the use of the Rules implies the parties' agreement to participate in the proceedings at least until there has been an initial meeting or discussion with the mediator and, further to that discussion, the parties have received a note from the mediator setting out how the mediation is to be conducted.

Article 7(2) takes account of valuable feedback received on a distinctive feature of the ICC ADR Rules whereby a party could not, without the agreement of all parties, end the ADR proceedings until it had participated in a first meeting with a neutral. This was intended to commit parties to the proceedings at least until they had had the benefit of a discussion with the neutral about the specificities of conducting proceedings under the Rules, how they could be structured and conducted and, if need be, the settlement technique to be used. This discussion was capable of providing them with valuable information on how the ADR proceedings might assist in resolving their dispute.

Under the new Rules, the first discussion with the mediator will focus on the way in which the mediation will be conducted, rather than the choice of ADR technique, but the principle is the same: once the parties have agreed to mediate under the Rules, they cannot abandon the proceedings until they have communicated with the mediator and learned how the mediation will be conducted. This reduces the risk of a party that is not familiar with mediation withdrawing from the proceedings before it has had a chance to learn from the mediator what the proceedings might be able to achieve. It also strikes a balance between, on the one hand, requiring the parties to respect their prior agreement to participate in the settlement procedure and, on the other hand, the voluntary nature of the mediation process. [Page9:]

There are three important aspects to this provision: (i) it makes express the requirement that the parties participate in a discussion with the mediator regarding the manner in which the mediation shall be conducted; (ii) it introduces the requirement that the mediator set out the way in which the procedure is to be conducted in a note that is sent to the parties; and (iii) it expressly states that all parties are obliged to participate in the settlement proceedings until receipt of this note. The purpose of the note provided by the mediator is twofold: (i) it ensures that the proposed procedure is recorded in writing so that each party can read and reflect on what is proposed; (ii) the date of delivery of the note marks the date after which either party can elect to withdraw from the proceedings pursuant to Article 8 relating to the termination of the proceedings.

Proceedings conducted under the new Rules are confidential (Article 9). However, the fact that settlement proceedings are taking place, have taken place or will take place is no longer confidential, unless otherwise agreed by the parties or the applicable law provides otherwise. This change is considered to be consistent with current dispute resolution thinking, which no longer sees the existence of mediation proceedings as a sign of a lack of confidence in the strength of a party's case but, on the contrary, a positive demonstration of willingness to act reasonably and commercially and avoid unnecessary costs.

d) Parallel proceedings

The commencement of mediation proceedings under the Rules does not, of itself, prevent the commencement of parallel arbitration or litigation. Before a dispute arises parties may not know whether they wish to allow for the possibility of commencing or continuing arbitration, litigation or other proceedings while the mediation is under way. The new Article 10(2) makes it clear that parties are not barred from commencing parallel arbitration or other proceedings unless they have agreed otherwise in writing or applicable law provides otherwise. In practice, it is not uncommon for tiered dispute resolution clauses to require parties to wait until the mediation has ended or a certain period of time has elapsed before commencing arbitration or litigation.

Article 10(3) prohibits a mediator from acting as arbitrator (or judge, expert or party advisor) in respect of the same dispute unless all of the parties so agree in writing. This provision remains unchanged since it was generally considered to strike the right balance between respecting party autonomy and protecting parties from the due process risks inherent in appointing as arbitrator a person who has previously acted as a mediator in the same dispute.

5. Clauses

Parties wishing to have recourse to ICC mediation or other settlement procedures under the ICC Mediation Rules, whether alone or in parallel with or prior to arbitration or other proceedings, are encouraged to include an appropriate dispute resolution clause in their agreements. To this end, the new Rules are accompanied by four alternative model clauses for use by parties when drafting a contract.

Two of the clauses combine mediation with arbitration, one simultaneously, the other successively; another creates an obligation to consider referring disputes to the ICC Mediation Rules; while the least constraining clause merely reminds parties of their option to use the ICC Mediation Rules. The clauses are accompanied by a general introductory note providing guidance on their use and each clause is followed by notes addressing its specific effects and meaning and explaining how it may be adjusted to particular needs and circumstances. In multitiered clauses consideration needs to be given to the Emergency Arbitrator Provisions in the 2012 Arbitration Rules. Parties are encouraged to determine whether or not they wish to have recourse to the emergency arbitrator when providing for ICC mediation in parallel with or prior to arbitration proceedings administered by the ICC International Court of Arbitration.

6. Deposits, fees, costs and Appendix

The costs of proceedings under the new Rules will continue to be composed of: (i) ICC administrative expenses, (ii) the mediator's fees and (iii) the mediator's expenses. If one party is proposing mediation pursuant to Article 3, the Centre may request the party filing the Request for Mediation to pay a deposit to cover the administrative expenses of the Centre. Article 6(6) makes it clear that, with respect to mediation proceedings that have commenced, all deposits shall be borne in equal shares by the parties. They will take account of any deposits that have initially been paid only by the party that filed the Request for Mediation pursuant to a request from the Centre under Article 6(2). Credits for any such deposits will be made by the Centre when requesting parties to make subsequent deposits in respect of the fees [Page10:] and expenses of the mediator and further ICC administrative expenses. If the parties do not reach agreement to refer their dispute to settlement proceedings under the Rules, any deposit made by the party that filed the Request for Mediation will remain the sole responsibility of that party.

Under the Appendix to the new ICC Mediation Rules, ICC administrative expenses are based on the amount in dispute. For cases in which the amount in dispute does not exceed US$ 200,000, the ICC administrative expenses are capped at half the amount provided in the previous Appendix, which results in a considerable decrease in expenses for such disputes.

In light of the hourly rates requested by mediators from different countries and the predominantly international nature of the cases filed with the Centre, the new Appendix aims to ensure that the cost structure under the ICC Mediation Rules remains flexible to cater for diverse economic circumstances. In sum: (i) there is no pre-fixed hourly rate; (ii) the mediator suggests an hourly rate; (iii) the parties can comment; and (iv) the Centre will then fix the hourly rate at the outset. Accordingly, parties retain some control over the mediator's costs. The mediator's fees will generally be based on an hourly rate, unless the parties and the mediator have agreed that the Centre fix the mediator's fees on the basis of a single fixed fee for the whole proceedings.

7. Mediation Guidance Notes

The Mediation Guidance Notes are published separately in a companion booklet4 to the Rules. Their purpose is to offer guidance on issues that deserve attention when choosing and organizing mediations. Helpful information will be found on the many administrative and procedural questions that a party may wish to consider when preparing mediation proceedings on its own or in discussions with the other party and the mediator. In keeping with the spirit of mediation, the Mediation Guidance Notes do not dictate solutions, but encourage parties to work out the best arrangements for their particular case in light of common mediation practices and the flexibility offered by the ICC Mediation Rules.

1
The revision of the ADR Rules was led by Christopher Newmark (Chair of the Consultative Task Force on the Revision of the ICC ADR Rules and incoming Chair of the Commission on Arbitration and ADR), Peter Wolrich (current Chair of the Commission on Arbitration and ADR), Hannah Tümpel (Senior Counsel and Manager of the ICC International Centre for ADR) and Hélène van Lith (Secretary to the Commission on Arbitration and ADR), all of whom have contributed to this Introduction to the New ICC Mediation Rules.

2
For further details, see the annual Statistical Report on ICC dispute resolution services published in the ICC International Court of Arbitration Bulletin. See also H. Tümpel & C. Sudborough, 'ICC's ADR Rules 2001(2010 : Current Practices, Case Examples and Lessons Learned' in A. Ingen-Housz, ed., ADR in Business, Practice and Issues across Countries and Cultures, vol. II (Kluwer, 2011).

3
Whether in mediation or other proceedings conducted under the Rules, a successful outcome usually takes the form of a settlement agreement contractually binding on the parties. If parties choose neutral evaluation, they will in the end receive a non-binding evaluation or recommendation which they can use as a basis for a negotiated settlement agreement; the evaluation itself will not be binding on the parties. Unlike arbitral awards, settlements reached under the new Rules are not enforceable under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and failure to comply with a settlement agreement is considered as a breach of contract in most jurisdictions.

4
Mediation Guidance Notes, available in hard copy as ICC Publication 870 and online at www.iccwbo.org and in the ICC Dispute Resolution Library www.iccdrl.com.