Since 2018, the Bahrain Chamber for Dispute Resolution (BCDR) has been heading the Kingdom of Bahrain's delegation to the United Nations Commission on International Trade Law (UNCITRAL) Working Group III on Investor-State Dispute Settlement (ISDS) Reform. In this capacity, BCDR has recently offered comments on the initial draft prepared by the UNCITRAL Secretariat of a Note on Mediation and other forms of alternative dispute resolution and draft Guidelines for participants in investor-State mediation. The draft Note outlines possible work of the UNCITRAL Secretariat on elaborating mediation rules, model clauses on mediation for investment treaties, and guidelines for the effective use of mediation in settling investor-State disputes.
In its official comments filed on 6 January 2022, Bahrain observed that, as there already exist sets of investment mediation rules, the focus of the Working Group should be on the development of model clauses and guidelines. Three options for model treaty clauses on mediation were put forward in the draft Note: option 1 referring to mediation as an available means for settling disputes; option 2 embodying an undertaking at least to attempt mediation; and option 3 providing for mandatory mediation. Bahrain noted that while option 3 departs from the voluntary nature of mediation, it may be the most conducive for the use of mediation in ISDS proceedings.
Bahrain cautioned, however, that where one of the disputing parties is reluctant to meaningfully engage with the mediation process, any mandatory mediation period under option 3 could be interpreted as preventing the more diligent party from referring the dispute to another ISDS method prior to the expiry of the prescribed mediation period. The mandatory mediation period would effectively be operating as another cooling-off period. To avoid such an undesirable scenario, BCDR recommended on behalf of Bahrain that future versions of option 3 allow a party to refer the dispute to another ISDS method if (i) a party fails to participate meaningfully in the mediation process during a given period (e.g., 2 months), or (ii) following a written declaration of the mediator that further efforts at mediation would not, in his or her opinion, contribute to a settlement of the dispute.
Bahrain also encouraged the UNCITRAL Secretariat, in future drafts, to provide, to the extent possible, estimates of the number of investor-State mediations, and further encouraged the UNCITRAL Secretariat not to limit itself to the study of mediation but to also consider the advantages of conciliation in the ISDS context.
Click here to read the full submissions of Bahrain on mediation and other forms of ADR.
BCDR had previously, in mid-2019, also prepared the Kingdom's more general submissions to UNCITRAL Working Group III on ISDS Reform. To read Bahrain's more general submissions to UNCITRAL Working Group III, click here.