Blockchained Melody
January 16, 2018
By Matthew Rushton, JAMS International

International mediation is simultaneously hard to avoid, and hard to find. Matthew Rushton explores the international paradox, and where it might lead.

Ask the governing classes about London as a global legal market, and out march the clichés like soldiers on parade: the infrastructure, the legal expertise, the admirably (indeed inconveniently) independent judiciary, and a centuries-long corpus of mercantile law. The time zone; the financial services and insurance markets; the language, the hotels, the restaurants. These, historically at least, have been the rails the litigation gravy train has ridden for decades.

“Global Britain”, then, is nothing new, and English law proves the point emphatically. Four cases out of five before what are now the Business and Property Courts have no UK parties; three out of five have no obvious connections to the UK. The presence of foreign parties mediating disputes in London, therefore, should be no surprise to anyone.

But let’s take a closer look at these “international” mediations. The parties might be from China, India or Hong Kong, but…the language is English. The documents are in English. The law is English, the law firms are English (occasionally US – with English solicitors), and the mediator is, of course, English or English-qualified.

This, for the most part, is international commercial mediation, but a bystander might be forgiven for suggesting otherwise. Lacking concepts like transnational law and a recognition and enforcement convention like the New York Convention, mediation remains international arbitration’s ambitious younger cousin who’s yet to find his or her passport. The reality, then, for now, is that mediation orbits irresistibly around the gravitational centres of the world’s international courts: London, New York, Hong Kong, Singapore.

So while the mediation community abounds with culturally sensitive and cross-culturally accredited mediators, the opportunities to apply those skills as intended are regrettably few. Cross-cultural, cross-border mediation, therefore, might seem less a practice and more an ambition.

But, times are changing. The combined forces of the “internet of things”, so-called big data, and blockchain technology seem set to have a profound effect on how we interact cross-border. Of these, blockchain presents by far the most exciting opportunities for mediators. At a prosaic level it’s simply an incorruptible ledger that can be used to record transactions. The opportunity it presents, though, is potentially transformative. Its evangelicals will tell you we’ve only yet experienced the “internet of information”; the next evolution will be the “internet of trust”, built on blockchain, and a catalyst for similarly seismic change. In the blockchain world, disputed facts will become a thing of the past. Elaborately drafted contracts will be replaced by ‘smart’, self-executing, self-enforcing contracts where buying and selling can be executed simultaneously without the need for intermediaries, brokers, banks and perhaps even lawyers.

It seems far-fetched, but IBM, AXA, and Allianz are already offering smart contracts for a range of (mostly financial services) products built on private blockchains. Where does this leave mediation? If there’s one certainty it’s that human existence and disputes are inseparable. There will be disputes, and mediation – with its inherent flexibility – is well placed to adapt to new environments. Mediations will likely be online, and likely be a primary means of resolving disputes away from the procedures and rules of national courts. As blockchain becomes more ubiquitous, mediation’s current deficiencies in an international context will diminish in importance.

The old order is changing, and perhaps faster than many might like. Mediation however will be a part of the new order, unmoored from international courts, and simply available where needed.

So, international mediation, I’m prepared to bet, has a bright, decentralised future. Seek and ye shall find.

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