U.N. approves model conciliation law

Dispute Resolution Journal, Feb-Apr 2003

The United Nations General Assembly has wrapped up three years of work on a new model law that establishes procedures and confidentiality protections for international commercial conciliation proceedings.

The Model Law on International Commercial Conciliation is designed to serve as a template for U.N. member states to develop their own conciliation laws, or as a supplement to existing laws in countries that have them. The General Assembly's approval constitutes a formal recommendation that member states adopt the model law.

Conciliation is the international equivalent of mediation, and the U.N. hopes the model law will encourage multinational companies to use the process to resolve commercial disputes. According to a resolution accompanying the model law, conciliation can help companies maintain commercial relationships, facilitate international transactions and produce cost savings in member states' judicial systems.

Key provisions of the model law establish new confidentiality protections for conciliation communications. The law provides that documents and communications made during the process will be kept confidential unless the parties agree otherwise, and participants may not testify in future proceedings about communications, statements, or proposals made during conciliation.

The law also establishes that a conciliation is deemed to have commenced as soon as disputing parties agree to use the process, and that a single conciliator will be appointed unless the parties choose to appoint a panel of two or more.

Conciliators are authorized by the model law to communicate with the parties on a separate basis, and they may disclose information from one party to another unless they are specifically directed to keep it confidential.

However, the law contains no provision on the enforcement of agreements reached through conciliation because delegates to the commission were unable to agree on a single mechanism, leaving the issue to be resolved according to the national laws of U.N. member states.

The resolution accompanying the model law says the U.N. should make it generally known and available to member states, recommending that "all States give due consideration to the enactment of the Model Law on International Commercial Conciliation, in view of the desirability of uniformity of the law of dispute settlement procedures and the specific needs of international commercial conciliation practice."