Analysis & trends

Mediation: from an option to a reflex The emergence of a new strategy for resolving international disputes

Ever since arbitration established itself as the preferred method of resolving international disputes – thanks to the neutrality and confidentiality it offers, and the ease with which awards can be enforced under the 1958 ‘New York Convention’[1] – companies have long structured their litigation strategy around a simple choice between state courts and arbitrators.

However, beyond arbitration, the parties have a much more comprehensive range of options for the amicable resolution of their international commercial disputes, foremost among which is the use of mediation.

Long viewed as a mere alternative to litigation – and sometimes undertaken under the impetus of a court order – mediation is now experiencing a remarkable surge in popularity. In the United Kingdom and France, as well as internationally, recent reforms reflect a profound shift in the amicable settlement of disputes, which now encourages the parties to seek a negotiated solution before, during, or even after litigation (1.).

This development marks a paradigm shift in dispute management, for businesses as well as for states and public bodies. Litigation strategy is no longer based solely on a decision imposed by a third party, but on the parties’ ability to devise for themselves the solution best suited to their respective interests (2.).

 

1. THE GRADUAL CONVERGENCE OF FRENCH AND BRITISH MEDIATION MODELS, DRIVEN BY AN INTERNATIONAL DYNAMIC

The United Kingdom is traditionally regarded as one of the systems most favourable to Alternative Dispute Resolution (‘ADR’), both as a major centre for arbitration and as a preferred venue for the negotiated resolution of disputes.

As early as April 1999, the Civil Procedure Rules established a guiding principle of civil proceedings (the ‘Overriding Objective’)[2], requiring courts to deal with cases ‘justly’[3] and entrusting the judge with the role of case manager, encouraged to promote the use of ADR where deemed appropriate[4].

From 2004 onwards, the UK courts strengthened this incentive by introducing financial mechanisms: a party that has unreasonably refused to participate in mediation may be ordered to pay costs, even where it would otherwise have succeeded on the merits[5].

In 2013, the concept of ‘proportionality of costs’[6] was added to the guiding principle; then, in 2015, the new Practice Direction on Pre-Action Conduct and Protocols[7] presented litigation as a last resort and expressly invited the parties to give serious consideration to mediation before commencing any proceedings[8].

Finally, the Churchill judgment[9] (2023) recognised that a court may, in certain circumstances, order the parties to engage in an ADR process without disproportionately infringing their right of access to court. More recently, in October 2024, the Civil Procedure Rules incorporated the promotion of ADR into the Overriding Objective itself, specifying that it now falls within the court’s proper case management to ‘order or encourage the parties to use, and facilitate the use of, alternative dispute resolution’[10].

In France, although the courts’ role in conciliation was established as early as 1975 and court-ordered mediation was introduced in 1995, it was not until the 2008 European Directive[11] was transposed in 2011[12] that conventional mediation became a freestanding method of dispute resolution.

Between 2016 and 2023, the promotion of amicable dispute resolution methods gained momentum. It first became a public policy objective for the justice system[13], before resort to an amicable method was made mandatory – on pain of inadmissibility – prior to bringing certain types of claims before a court[14], and before the courts’ role was strengthened to make them a proactive participant in the amicable resolution of disputes[15].

The Decree of 18 July 2025[16], which recodifies amicable dispute resolution methods within the Code of Civil Procedure and introduces new procedural incentives – notably strengthened mechanisms for the approval (homologation) of agreements reached through an amicable method, the role of lawyers in safeguarding their validity, and clarified rules on confidentiality – marks the culmination of this approach. In particular, it enables courts to order the parties to meet with a court-appointed conciliator or mediator tasked with informing them about how the process works, and to impose a civil fine of up to EUR 10,000 on any party that, without legitimate reason, fails to comply with such an order. This penalty was imposed for the first time by the Paris Judicial Court on 5 February 2026[17].

At the international level, the entry into force on 12 September 2020 of the United Nations ‘Singapore Convention’ on International Settlement Agreements Resulting from Mediation represents a major step forward[18]. Drawing on the success of the New York Convention, it aims to facilitate the international recognition and enforcement of cross-border commercial mediation settlement agreements in order to enhance legal certainty.

Prior to the adoption of the Singapore Convention, one of the major obstacles to the use of mediation was precisely the difficulty parties faced in enforcing settlement agreements reached through mediation[19]. With the Singapore Convention, mediation has become a truly autonomous method of resolving international disputes: in addition to making a mediated settlement agreement enforceable, the Singapore Convention is also unique in allowing such an agreement to be relied on as a defence[20], with a party able to invoke it to show that a dispute has already been finally settled amicably.

A mediated settlement agreement can therefore serve both as a ‘sword’ – enabling the enforcement of that agreement – and as a ‘shield’ – enabling a party to oppose any new proceedings concerning a matter that has already been resolved[21].

Already signed by fifty-nine states, including the United Kingdom, it currently has twenty contracting parties. Whilst no EU Member State has yet signed it, the United Kingdom has officially announced its intention to ratify it as soon as the national legislative measures necessary for its implementation have been adopted[22].

At the same time, the leading arbitration institutions have gradually incorporated mediation, or hybrid procedures (Med-Arb, Arb-Med-Arb[23]), into their rules. This development reflects a strong expectation on the part of economic operators, who are seeking a range of mechanisms to tailor the dispute resolution process to each dispute.

This trend is not limited to commercial disputes. With regard to disputes between foreign investors and states – for a long time resolved primarily through arbitration[24] – several international arbitration institutions, including the International Centre for Settlement of Investment Disputes (‘ICSID’), now also encourage resolution through mediation, as evidenced by ICSID’s adoption of new mediation rules in 2022[25].

The United Nations Commission on International Trade Law (‘UNCITRAL’) has also been carrying out significant normative work for several years, which led in particular to the adoption in 2023 of the ‘Guidelines on Mediation for International Investment Disputes’, followed in 2025 by the ‘Toolkit for the Prevention and Mitigation of International Investment Disputes’. These normative developments highlight the growing enthusiasm of states themselves for this alternative method of resolving disputes between foreign investors and states.

Recent state practice confirms this trend: recourse to mediation is expressly provided for, and increasingly so, in investment treaties concluded in recent years.

By way of illustration, Article 8.20 of the Comprehensive Economic and Trade Agreement between the European Union and Canada (CETA) provides for the use of mediation[26], whilst the specific rules applicable to investment disputes were adopted in 2021 to govern this procedure. Similarly, the Investment Protection Agreement between the European Union and Singapore enshrines the use of mediation in Article 3.13[27] and sets out the procedures for recourse to it at various stages in Annex 6[28].

Several regional investment treaties also follow this same approach, as evidenced by the United States–Mexico–Canada Agreement (USMCA), whose investor–state dispute settlement regime combines prior consultations with consent to arbitration[29]. The same applies in Africa: the Protocol on Investment to the Agreement establishing the African Continental Free Trade Area (AfCFTA), adopted in February 2023, requires investors and host states to prioritise the search for an amicable resolution of the dispute through consultations, negotiations, conciliation or mediation[30], before resorting to arbitration; the details of this procedure are to be set out in an annex on dispute settlement which is still being negotiated between the States Parties[31].

Thus, in all systems, the serious pursuit of an amicable solution is gradually becoming part of the due diligence expected of a reasonable economic operator prior to litigation. The parties must therefore rethink their dispute resolution strategy more broadly.

 

2. MEDIATION FOLLOWS A DIFFERENT LOGIC TO LITIGATION AND ARBITRATION AND REQUIRES ECONOMIC ACTORS TO ADAPT THEIR PRACTICES

Despite their differences, court litigation and arbitration pursue the same objective: obtaining from an independent third party a decision that settles the dispute, with both the judge and the arbitrator vested with the power to rule on the law and to impose a solution on the parties.

Mediation follows a different logic. Indeed, the mediator’s role is neither to determine who is right nor to impose a solution on the parties. The mediator’s role is to create the conditions for a structured dialogue enabling the parties (i) to move beyond their positions of principle, whether legal or otherwise, (ii) to identify and articulate their respective interests, and (iii) to devise for themselves, with the support of their advisers and, where appropriate, technical experts, a freely determined, tailor-made solution.

Mediation leads the parties to consider every possible outcome that would durably resolve their dispute, addressing all the economic, operational and relational interests at stake that are inherent in any international commercial dispute. Preserving a supply chain, continuing a strategic partnership, protecting a technology or limiting a reputational risk are all issues to which judges cannot always respond in an appropriate manner.

Yet mediation allows for solutions that judges could not order: amending a contract, new financial or operational terms, redefining the rules of a partnership, an implementation timetable, a new commitment to cooperate, or a joint communication agreement.

Whilst it also offers the advantages traditionally associated with negotiation generally (speed, and the reduction and control of costs[32], confidentiality of discussions, consensual internal and external communication, preservation of business relationships, etc.), mediation is above all a value-creation tool, enabling companies to turn a conflict into an opportunity to reorganise a business relationship on mutually acceptable and sustainable terms.

This approach is not, however, intended to replace litigation or arbitration, which remain indispensable when a legal ruling on a point of principle is required, or when a party refuses any dialogue.

Just as arbitration is now built in at a very early stage – as early as the drafting of international contracts – mediation deserves to be considered at the same time, in particular through negotiation clauses, mediation clauses and multi-tier dispute resolution clauses.

This development also calls for a different approach to dispute management. Preparing for mediation involves moving beyond legal argument to identify all of the company’s strategic interests at stake, mobilising operational functions and assessing the various options capable of preserving or creating value.

Companies that embrace these new reflexes today will enjoy a clear advantage in preventing and resolving their international disputes.

 


[1] Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 10 June 1958 (link).
[2] Civil Procedure Rules 1998 (SI 1998/3132), which came into force on 26 April 1999, Rule 1.1 (link).
[3] Rule 1.1 of the original version of the ‘Overriding Objective’, which came into force on 26 April 1999: ‘these Rules are a new procedural code with the overriding objective of enabling the court to deal with cases justly.’
[4] Rule 1.4 of the original version of the ‘Overriding Objective’, which came into force on 26 April 1999, providing, in particular, that the judge shall assist the parties in resolving their dispute and encourage the use of ADR where the judge considers it appropriate.
[5] Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576. According to this judgment, the ‘unreasonableness’ of a refusal to mediate is assessed in the light of factors such as the nature of the dispute, the prospects of success on the merits, the reasonable prospects of success of mediation, the cost of mediation in relation to the stakes involved, the delay it would cause, and the conduct of the parties (link).
[6] Rule 1.1 of the current version of the “Overriding Objective”: “these Rules are a procedural code with the overriding objective of enabling the court to deal with cases justly and at proportionate cost.”
[7] Link.
[8] Paragraph 8 of the Practice Direction on Pre-Action Conduct and Protocols: “Litigation should be a last resort. As part of a relevant pre-action protocol or this Practice Direction, the parties should consider whether negotiation or some other form of ADR might enable them to settle their dispute without commencing proceedings.” (link).
[9] Churchill v Merthyr Tydfil County Borough Council, Court of Appeal, 29 November 2023 (link).
[10] Rule 1.4(e): ‘Active case management includes: (…) ordering or encouraging the parties to use, and facilitating the use of, alternative dispute resolution’.
[11] Directive 2008/52/EC of the European Parliament and of the Council of 21 May 2008 on certain aspects of mediation in civil and commercial matters (link).
[12] Order No. 2011-1540 of 16 November 2011 transposing Directive 2008/52/EC of the European Parliament and of the Council of 21 May 2008 on certain aspects of mediation in civil and commercial matters (link); Decree No. 2012-66 of 20 January 2012 on the amicable settlement of disputes (link).
[13] Act No. 2016-1547 of 18 November 2016 on the modernisation of justice for the 21st century, Title II of which aims to ‘promote alternative dispute resolution’ (link).
[14] Article 4 of Decree No. 2019-1333 of 11 December 2019 reforming civil procedure, creating Article 750-1 of the Code of Civil Procedure. As this original wording was partially annulled by the Council of State, Article 750-1 was reinstated in a new version by Decree No. 2023-357 of 11 May 2023 on the mandatory prior attempt at mediation, conciliation or participatory proceedings in civil matters, applicable to proceedings brought on or after 1 October 2023 (link).
[15] Decree No. 2023-686 of 29 July 2023 on measures to promote the amicable settlement of disputes before the judicial court introduces, in particular, the Amicable Settlement Hearing (Audience de Règlement Amiable) and the bifurcation of civil proceedings (césure du procès civil) (link).
[16] Decree No. 2025-660 of 18 July 2025 reforming conventional case preparation (instruction conventionnelle) and recodifying amicable dispute resolution methods, which came into force on 1 September 2025, in particular Articles 1528-3 (confidentiality), 1533 and 1533-1 (information meeting) and 1543 to 1546 (approval of agreements) of the Code of Civil Procedure (link).
[17] Article 1533-3 of the Code of Civil Procedure, introduced by Decree No. 2025-660 of 18 July 2025, provides that a party who, without legitimate reason, fails to comply with an order to meet with a conciliator or mediator may be liable to a civil fine of up to EUR 10,000; Paris Judicial Court, 5 February 2026, Case No. 24/09128.
[18] United Nations Convention on International Settlement Agreements Resulting from Mediation of 20 December 2018 (link).
[19] Strong S.I, “Chapter 14: Promoting International Mediation Through the Singapore Convention on Mediation”, in Ali Shala, Jetin Bruno et al. (eds), New Frontiers in Asia-Pacific International Arbitration and Dispute Resolution, International Arbitration Law Library, Volume 59 (2020), pp. 340–341.
[20] Morris-Sharma, Nathalie Y., “The Singapore Convention: A Milestone for Mediation”, Nassib, G. Ziadé (ed.), BCDR International Arbitration Review, Volume 6, Issue 2 (2019), pp. 261–296. Ibid., Morris-Sharma, pp. 267–268.
[21] Ibid., Morris-Sharma, pp. 267–268.
[22] Link.
[23] Verbist, Herman, “Chapter 16: Mediation as a Method to Settle International Trade and Investment Disputes”, in Anderson, Alan M., and Beaumont, Ben (eds), The Investor-State Dispute Settlement System: Reform, Replace or Status Quo? (2020), pp. 343–345.
[24] Tan Rachel, ‘Investor-State Arbitration Meets Mediation: The Singapore Convention on Mediation as a Game Changer’, Kluwer Arbitration Blog, 29 September 2020, p. 2.
[25] Shirlow Esmé, “Investor-State Arbitration Meets Mediation: Developments, Intersections and Future Trajectories”, Kluwer Arbitration Blog, 28 September 2020, p. 3. ICSID Mediation Rules, available at <ICSID_Mediation_Rules.pdf> (last accessed 30 September 2026).
[26] Comprehensive Economic and Trade Agreement (CETA) between Canada, of the one part, and the European Union and its Member States, of the other part, Chapter Eight – Investment, Article 8.20 Mediation. The applicable mediation rules were adopted by Decision No. 002/2021 of the Committee on Services and Investment of 29 January 2021. Available at <https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:22017A0114(01)> (accessed on 2 October 2026).
[27] Investment Protection Agreement between the European Union and its Member States, on the one part, and the Republic of Singapore, on the other part, Article 3.13.
[28] Investment Protection Agreement between the European Union and its Member States, of the one part, and the Republic of Singapore, of the other part, Annex 6.
[29] Agreement between the United States of America, the United Mexican States, and Canada, Chapter 14, in particular Article 14.D.5 (Consent to Arbitration), to be read in conjunction with the provisions on prior consultations between the parties. Available at <https://ustr.gov/sites/default/files/files/agreements/FTA/USMCA/Text/14-Investment.pdf> (accessed on 2 October 2026).
[30] Protocol on Investment to the Agreement Establishing the African Continental Free Trade Area (AfCFTA), adopted on 19 February 2023 at the 36th African Union Summit, providing, in particular, for the priority use of amicable dispute settlement mechanisms (consultations, negotiations, conciliation, mediation) prior to investor-state arbitration.
[31] Protocol on Investment to the Agreement Establishing the African Continental Free Trade Area (AfCFTA), Article 46, providing for the negotiation of an annex on dispute settlement within twelve months of the adoption of the Protocol. This annex is, to date, still under negotiation between the States Parties.
[32] According to CEDR (the Centre for Effective Dispute Resolution) in the United Kingdom, commercial mediation is estimated to save businesses around GBP 5.9 billion a year in management time, interpersonal relations, productivity and legal costs, with the annual value of cases handled through mediation estimated at around GBP 20 billion. The eleventh CEDR Mediation Audit, published in 2025, records approximately 21,000 civil and commercial mediations in the United Kingdom in the year to September 2024, with an overall settlement rate of 92%.