Georgia may have had to play catch-up when preparing its legal environment for international arbitration, but it has a chance to lead the pack when it comes to another form of commercial dispute settlement, thanks to a new United Nations treaty.
Signed in August, the Singapore Convention on Mediation aims to smooth out the enforceability of cross-border agreements reached via mediation, which is seen as a more congenial way to iron out disagreements.
This week’s eighth annual Atlanta International Arbitration Society (AtlAS) conference shows how vibrant the arbitration community has become since the society was formed in 2012, attracting global conferences and expertise, driving the creation of a physical space for hearings, organizing student competitions and driving changes to the state’s legal code to make it more arbitration friendly.
But then, Georgia was trailing its peers; now it has a chance to get ahead, says Peter “Bo” Rutledge, dean of the University of Georgia School of Law.
“Other states in particular, New York, Florida and perhaps California were quicker to the punch than Georgia was in laying that infrastructure,” Mr. Rutledge said. “By contrast, I think that this development with the Singapore Convention is so new, that relative to where Georgia was in the market for the provision of arbitration services, it actually has the opportunity to be an early mover.”
In other words, despite the fact that arbitration and mediation are different procedures, preparations for the former make Georgia well suited for the latter.
It’s hard to quantify how many arbitral hearings have come to Georgia, given their private nature, but the benefits go beyond legal fees and spillover economic effects for hotels, conference centers and catering firms, Mr. Rutledge said.
A hospitable legal environment for dispute resolution is one of many factors companies may consider when looking for a new home. In Georgia, the perennial “No. 1 state for business” that plays host to 16 Fortune 500 companies and a growing cadre of foreign investors, business friendliness is particularly prized. In fact, the state announced Tuesday that it had seized the top ranking from Area Development magazine for the sixth straight year.
“Georgia has done an exceptional job positioning itself as a state that is sensitive to and supportive of the dispute resolution needs of an interconnected global economy,” Mr. Rutledge said.
Other intangible proof includes the establishment of a statewide business court in 2017 and the “very harmonious working relationship between the law schools, the bar and the judicial and governmental leadership of the state,” he added.
Similar to the coordinated effort for arbitration, Georgia should quickly adopt a new legal framework tied to the provisions of the Singapore Convention, showing that this time it’s well ahead of the trend, Mr. Rutledge wrote in an opinion piece Aug. 27 for the Daily Report:
Such legislation could enhance Georgia’s appeal as a mediation forum and build upon its reputation as a jurisdiction hospitable to business, including the resolution of business disputes. States have employed such moves in the past, whether with the early adoption of international arbitration laws (as Georgia recently did) or the creation of specialized business courts (as Georgia did as well). Rapid adoption of an international mediation law gives Georgia an opportunity to seize the “pole position” among other states and signal its availability as a reliable mediation forum.
Why is now mediation’s moment? Forty-six countries signed the Singapore Convention on its first day, a record. The U.S. was among them, though Congress still has to ratify its participation.
The problem for mediation and the promise of the new convention lie in its differences from arbitration in settling commercial disputes.
Arbitrations are run by an external panel, usually a three-person tribunal, that hears a case and makes a judgment. The process can be long and expensive, but it also leads to a definite result that is enforceable across borders, thanks to a well-developed framework of multilateral agreements.
In mediation, parties come together aiming to work out a mutually agreeable solution, often aided by an experienced attorney or team of attorneys. The process is cheaper and less contentious. It’s used often before conflicts have progressed beyond repair and in cases where the two sides aim to preserve their commercial relationship.
But the outcome is also less certain, especially considering how hard it has traditionally been to enforce mediated settlements across borders. That’s one thing the Singapore Convention aims to change.
“If there were to be a more robust record of ratifications and accessions such that (arbitration’s) comparative advantage on enforceability were to decline, then I think for a certain segment of disputes mediation would rise in popularity, because at that point the mediated settlement has currency comparable to the arbitration award,” Mr. Rutledge told Global Atlanta.
Mediations might also be appealing to businesses because unlike in arbitration, they aren’t committing to a process that could lead to an uncertain but binding result. In mediations, the outcome only comes into effect after the parties know the terms and agree to them, the dean said.
One thing Georgia will need to tap into this area of dispute settlement is a set of attorneys trained in the art of mediation, one area where the UGA law school is investing.
Rob McNiff, a practicing mediator in Athens and registered neutral with the Georgia Commission on Dispute Resolution, serves as an instructor in the school’s mediation practicum.
It’s designed to produce registered neutrals — those who have passed an approved mediation training. While in law school, even before they pass the bar exam, students who have completed the course can mediate disputes through court-annexed programs in Georgia.
Whether in global business or domestic disputes, training in the approach to conflict — including a look at how cultural differences inform disputes — can be beneficial for students wherever their careers may lead
“We think that the underlying skills are simply helpful in any professional setting, given that conflict is sort of our daily bread as lawyers,” Mr. McNiff said. “The mediator helps parties explore their priorities and underlying interests, helps them communicate in a way that’s constructive and steers them away from misunderstanding. Mediators orient them toward a solution instead of getting bogged in the intractable conflict and history between them.”
It’s a different mindset than the one that drives many students into law school: the desire to solve problems by compelling a certain result though the force of the law, he added. And it’s one that wasn’t taught at UGA 17 years ago when Mr. McNiff graduated.
Mr. Rutledge says that building Georgia’s reputation in mediation could mean more companies electing to write the state into contracts as an arbitral seat, or specifying the state as a place for their mediations to be held. That was a long-term goal of the arbitration initiative.
Attend the Multiple Perspectives on Arbitration conference or GAR Live Atlanta II by clicking here.