UNCITRAL Model Law - Israeli Mediation Law and … · lingual difference between the terms...

Conciliation: UNCITRAL, Israel, Thailand - Legal Analysis Adv. Roi Bak

UNCITRAL Model Law on International Commercial Conciliation in comparison with the Israeli Courts Law and Conciliation Regulations,

and the Thai Conciliation Rules Roi Bak, Advocate1

This article aims to provide a legal analysis comparing the UNCITRAL Model Law on International Commercial Conciliation (2002), which is the basic and guiding international legislation dealing with conciliation (the "Model Law), with Section 79 C of the Israeli Courts Law, 1984 (the "Law" or the “Israeli Law”), the Israeli Courts (Conciliation) Regulations, 1993 (the "Regulations") and the Thai Conciliation Rules, 1990 (the "Thai Rules" or the “Rules”). This legal analysis will be based on the same numeric order of the Model Law. The article will also comment and suggest changes to the Thai Rules in light of such comparison.

Article 1 - Scope and Definitions:

As a preliminary comment, I would like to remark that although there is a lingual difference between the terms "Mediation" and Conciliation" (and "Mediator" and "Conciliator" accordingly) in which the conciliator is believed to be more active than the mediator within the process, I shall treat all such definitions as one substance as shall be further defined. Therefore, the term conciliation/conciliator shall be used with respect to all relevant Laws and Rules.

(1) The Model Law applies to International, Commercial conciliation and

therefore defines in details when a conciliation is considered as an international one (i.e. different states with respect to place of business) including the use of a wide definition (Footnote number 2 of the Model Law) of Commercial nature.

The Israeli Law and Regulations perspective is a domestic/national point of view and therefore do not refer to such matter.

1 Advocate Roi Bak, a member of the Israel Bar Association and its Foreign Relations Committee - East Asian Countries, holds LL.B. (cum laude) from Bar-ilan University, Israel, and LL.M. (Business Law) from Chulalongkorn University, Bangkok, Thailand (in collaboration with University of British Colombia and University of Victoria - Canada, and the Kyushu University - Japan). Adv. Bak currently advises to an international law firm in Bangkok, Thailand, and can be reached by e-mail: [email protected] The core of this article was originally submitted as part of the LL.M. requirements - Chualongkorn University.

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Thai Rules: The Thai Rules do not contain an international and commercial clause. However, please note that with respect to the term “Commercial”, the Thai Rules do mention the “usages of the trade…including previous business practices between the parties” as principles to be taken into consideration by the Conciliator2.

(2) According to the Model Law, a Conciliator may be “a sole conciliator or two

or more conciliators, as the case may be”.

The Law defines Conciliation as "a process in which a conciliator meets with the litigants in order to bring them into an agreement for the settlement of the dispute, without any authority to rule this dispute". The Regulations further define the “Essence of the Conciliation” as such process (as defined under the Law) “through clarification of the disputed matters, disclosure of information necessary to the dispute and proposing proposals for settlement of the dispute”.

Thai Rules: It is interesting to note that the Thai Rules do not define directly

the term “Conciliation”, but actually do so by determining the applicability of the Conciliation Rules. According to the Thai Rules, the Conciliation Rules shall apply when the parties agree to place under the organization of the Institute “disputes arising out of or relating to contractual or other legal relationship where the parties seeking an amicable settlement of their dispute”3. Such definition is very similar to the Model Law. In addition, the Thai Rules do not mention that a Conciliator may be one or more.

(3) According to the Model Law, a Conciliator is a third person or persons that

assist the parties, upon their request, in their attempt to reach an amicable settlement of their dispute, without the authority to impose upon the parties a solution. The definition of “Conciliator” is combined within the definition of the “Conciliation” process4 (I.e. a process which involves a third party assisting the parties “to reach an amicable settlement of their dispute arising out of or relating to a contractual or other legal relationship” when shall be expressly requested by the parties).

The Regulations (which are more detailed than the Law) define Conciliator in a similar way (the Law even uses the same word: "assist"), except for few

2 Rule 9(2). 3 Rule 3(1). 4 Article 1(3).


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differences: instead of the word "amicable", the Regulations use the phrase "free negotiation". The Law and Regulations do not use the phrase "upon their request", since the emphasis is on the court’s referral of the parties to the conciliation process, rather than the parties themselves. Please note, that either way, the Law and Regulations emphasize the free will of the parties - whether to choose such process and whether to terminate it at any time.

Thai Rules: The Thai Rules’ definition of “Conciliator”deals mainly with the

registration of the Conciliator: using a broad definition of a Conciliator who is registered by the Office, and also an “ad hoc consiliator who is appointed by the parties and whose name does not appear in the list of the Office5”. Perhaps, since the Thai Rules are under the Thai Arbitration Insitute (TAI), it was important to regulate the matter of conciliator’s indentity and qualification. Another important difference is that the Model Law specifically mentions that the conciliator “does not have the authority to impose upon the parties a solutipon to the dispute”, while the Thai Rules are silent on this matter. I belive that for the sake of harminization and since it is important for the parties to understand that conciliation differs from any adjudication process (court, arbitration or similar), such provision should be added to the Thai Rules as well.

Please note that Sub-article 1(9) of the Model Law determines that such law shall not apply in the event that a judge or an arbitrator attempts to facilitate a settlement.

While Section 79A of the Israeli Law allows the court to rule in a way of compromise, upon the agreement of the parties.

The Thai Rules do not mention such matter, since they were enacted under the umbrella of the TAI, rather than a litigation process6.

Article 2 - Interpretation

(1) The Model Law requires an international interpretation (also in cases of lacuna) in accordance with the principles of the Model Law - all for the purposes of “uniformity” and “observance of good faith”7.

5 Rule 1(5). 6 For conciliation during judicial trial, please refer to the Court of Justice Regulations Pertaining to Mediation of Financial Dispute B.E. 2544 (2001). 7 Article 2(1).


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The Israeli Law does not mention such matter. Please note that the vast majority of the conciliation matters are under the Israeli Regulations which are inferior to any Law. According to Section 61(b) of the Israeli Contracts Law [General Part]-1973, and the Supreme Court's rulings, every contract shall be interpreted in good faith (as mentioned in the Model Law). The Israeli Justice Fundamentals Law-1981, states that in any case of lacuna, one shall address the principles of liberty, justice, honesty and peace or Israel legacy [which might be problematic since the Israeli Law does not aim to international conciliation].

Thai Rules: The Thai Rules do not deal directly with the matter of

interpretation. However, they subject the Rules to the the pricniples of “public order” or “good morals”, by clearly stating that such will prevail in any case of conflict8.

(2) The Model Law also determines that questions concerning the Model Law will

be settled in “conformity with the general principles on which this Law is based9”.

Thai Rules: Once again, the Thai Rules do not deal directly with such issues.

However, they do subject the Thai Rules to the cogent principles of of “public order” or “good morals”. For the sake of clarity and harmonization with the principles of the Thai legal system, I recommend that the Thai Rules should further elaborate such cogent legal princicples.

Article 3 - Variation by Agreement

The Model Law determines that such law can be conditioned by the parties to the conciliation process, except for the provisions of Article 2 (interpretation) and Article 6(3) (conduct of the conciliation in fair treatment and by taking into consideration the specific circumstances of each case). The Israeli Law does not expressly state such issue, but the language of the Israeli Law implies that the Law is cogent in this regard (unlike the Model Law).

8 Rule 3(3). 9 Article 2(2).


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Despite the ambiguity, it seems that the vast majority of the provisions of the Israeli Regulations is cogent (it includes the principle of fair treatment (as the Model Law), as well as good faith, avoidance of any favoritism or conflict of interest). According to the Israeli Supreme Court's ruling - such principles are cogent and therefore can not be conditioned, or changed in any manner.

• In addition, please note that according to the Regulations, the Sample

Conciliation Agreement attached to the Regulation (the "Sample Conciliation Agreement") might be conditioned - but once again, it is in my opinion, that the above mentioned principles can not be conditioned.

Thai Rules: The Thai Rules give the party freedom “to exclude or vary any of the Conciliation Rules at any time” for as long as such acts were made in writing. I belive that such provision is an important one and support it. However, the Model Law expressly prohibits the parties to exclude or vary certain principles determined in Article 2, and 6(3), while the Thai Rules refrain from doing so in a direct and expressed manner. Since such principles are cogent, I belive that the Thai Rules should also include a direct and expressed prohibition from excluding certain principles. In this regards, it might be recommended to specifically refer the parties to the principles of “public order” or “good morals” as stated on Rule 3(3). I also hold the opinion that the principles mentioned under Rule 9(1) and Rule 9(2): “Independent and impartial manner”, “fairness and justice” should be cogent ones and be mentioned as well.

Article 4 - Commencement of Conciliation Proceedings

(1) The Model Law determines that the conciliation process shall commence from the day the parties agree to such process10.

According to the Law and Regulations, the conciliation shall commence from the moment the court approves the nominated conciliator (whether nominated by the parties or the court itself, in case the parties can not agree on a conciliator). In addition, the Law and Regulations state that the judicial process shall be suspended from the date the conciliation process commences, for the period of time determined by the court (and the court might further extend such

10 Article 4(1).


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period upon the litigants' request). In case that the litigants did not reach a settlement agreement within the suspension period, the judicial process shall be renewed (such process might be renewed before the end of the suspension period upon the litigants, or the conciliator's request - as shall be further detailed).

(2) Further more, the Model Law states that in the event that one party shall not

obtain the acceptance of the other party within a period of 30 days from the day the invitation was sent, or as otherwise determined by the parties, then such act shall be deemed (subject to that one party's sole discretion) as the other party's rejection to the conciliation process.

The Law and Regulations do not mention such provision, since in most cases the court refers the parties to conciliation subject to their consent, and therefore the court shall be the one determining the period of time required for the parties' consent. Furthermore, the Israeli Contracts Law [General Part]-1973, determines that with respect to delivery of a notice, the required period shall be calculated from the date such notice arrives to the other party, unlike the Model Low which requires in the case of refusal, a period of 30 days from date the invitation was sent.

Thai Rules: The Thai Rules are more detailed in such regard. The said Rules

determine that “a party may send a written invitation to the other party for conciliation11”. I belive that the writing requirement is a an advisable one, demonstrating the real intention of the parties to conciliate, and also provides a suitable solution in case of misunderstandings. In addition, the Thai Rules do not follow the Model Law manner requiring the parties to “agree to engage in conciliation”, rather determining that the “Conciliation procceedings commence when the other party accepts in writing the invitation....12”. I hold the opinion that since the term “agree” as set under the Model Law, is too vague, the manner of the Thai Rules requiring the written acceptance of the other party, is preferable. On the other hand, I advice that in order to prevent common disputes regarding the dates of acceptance, the Rules should contain an accpetance presupmtion.

Thai Rules: Both the Model Law13 and the Thai Rules14, use a similar provision presuming that the invited party rejected the invitation for

11 Rule 5(1). 12 Rule 5(2). 13 Article 4(2). 14 Rule 5(3).


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conciliation in case a consent was not given within 30 days. However, there are slight differences between the Model Law and Thai Rules regarding this matter: According to the Model Law, if the inviting party did not receive an acceptance of the invitation within 30 days from the day on which the invitation was sent” (or other period specified), it shall be treated as “a rejection of the invitation to conciliate”, while the Thai Rules determine that such refusal shall occur 30 days from the date on which the other party receives the invitation (or other period specified). As mentioned-above, I advise that the Thai Rules should contain an acceptance presumption in order to prevent any disputes regarding the date of acceptance of invitation by the other party.

Article X - Suspension of Limitation Period

(1) According to the Model Law, the running of the limitation period is suspended from the commencement of the conciliation period15.

The Law and Regulations do not mention the issue of limitation period, but it is the Israeli Limitation Law-1958 (the "Limitation Law"), which determines that the limitation period shall not be calculated during the period between the commencement of a judicial process until its termination (in such that the plaintiff can not submit again a claim regarding the same matter). Therefore, and due to a similar ruling of the Israeli Supreme Court regarding arbitration process, the author holds the opinion that the running of limitation period shall be suspended during the conciliation process as well (certainly within a process that was referred by court) subject to the good faith of the parties that shall be required to take an active role with respect to the initiation and conduct of the conciliation process.

(2) The Model Law also states that upon the termination of the conciliation

proceedings without a settlement agreement, the limitation period shall resume running16.

The Israeli Law and Regulations do not mention such matter, but the Limitation Law is similar to the Model Law with respect to such matter (please refer to the above-mentioned note concluding the same).

15 Article X(1). 16 Article X(2).


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Thai Rules: The Thai Rules do not mention the matter of Limintation period.

However, please note that the Thai Civil and Commercial Code determines that “Prescription is interrupted if.the creditor enters an action for establishment of the claim...or the creditor submits the dispute to arbitration”17. Conciliation is not expressly mentioned under the Civil and Coomercial Code of Thailand. Hence and for any avoidance of doubt including practical reasons, I suggest adding a provision regarding the limitation period in a similar manner to the Model Law.

Article 5 - Number and Appointment of Conciliators

(1) According to the Model Law, the default number of conciliators shall be one (1) conciliator, unless agreed otherwise by the parties.

The Laws and Regulations do not mention such issue, though the Conciliator is described as an individual and not in a plural manner. • Please note that the Arbitration Law contains a similar clause to the Model

Law.

Thai Rules: The Thai Rules contain a similar provision to the Model Law, adding that in case more than one conciliator was appointed, then “the conciliators shall act jointly”18.

(2) The Model Law requires that the parties shall endeavor to reach agreement

on a conciliator/s, unless other procedure has been agreed upon.

The Regulations obligate the litigants to reach a written agreement concerning the conciliator (whether the Sample Conciliation Agreement or as otherwise agreed in writing by the parties).

• Please note that a written agreement might be helpful in a future litigation

- due to evidence laws matters.

Thai Rules: The Thai Rules’ spirit is similar to the Model Law in this regard, mentioning that “The parties may appoint the conciliator” or ask for the Director’s assistance in such matter19. In addition, as already mentioned, Rule

17 Sections 193/14 (1) and 193/14 (2). 18 Rule 6. 19 Rule 7.


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5 of the Thai Rules requires a written invitation and acceptance of the concioliation proceedings.

(3) The Model Law gives the parties the opportunity to seek the assistance of an

institution or person in connection with the appointment of conciliators, whether by a way of a direct appointment or a recommendation (please note that the Model Law uses the plural form of Conciliators).

The Law and Regulations do not mention such matter. However, the Regulations state that in the event that the parties can not reach into a mutual consent regarding the identity of the conciliator, then the court itself may appoint such from the list of conciliators, as determined under the Israeli Courts (Appointment of Conciliator) Regulations-1996. • Please note that the Regulations use the word "may" which is not a

compulsory, giving the court the freedom to appoint a conciliator which is not on the mentioned list.

Thai Rules: As mentioned above, Article 5(3) of the Model Law is similar to

Rule 7 of the Thai Rules. The Thai Rules allow the parties to appoint the Conciliator, or to seek the assistance of the Director, by a virtue of recommendation or direct appointment. Please note that the Model Law mentions the assistance of “an institution or person”, while the Thai Rules, which are under the umbrella of TAI, are natuarly more strict and specific, requiring the assistance of the Director solely.

(4) The Model Law requires any assisting institution or person to take into

consideration the criteria of independency, impartiality, and when appropriate, the advisability of appointing a conciliator of a different nationality than the parties. As explained above, the Israeli Law and Regulations do not mention such matter. The Israeli Regulations do require a specific and detailed list of qualities as criteria for the appointed conciliator, as shall be further discussed in section 6(3) hereto. However, please note that the Regulations do not require a different nationality for the appointed Conciliator due to their domestic perspective.

Thai Rules: The Thai Rules do not deal with the criteria to be taken into

consideration by the Diretor at the early stage of appointment. The Rules only mention vaguely that “if the Director deems appropriate and the parties


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agree, one or more conciliators shall be appointed”20. However, please note that Rule 10 does obligate the Director to supervise the proceedings “with regard to the principles of speediness and fairness”. I believe that the early stage of appointing the Conciliator(s) is a critical stage for the success of the entire proceedings. Therefore, I advise on adding a similar provision to the Model Law in this regard, taking into consideration the criteria of independency and impartiality. I also hold the opinion that the appointment of the Conciliator shall not be against the cogent pronciples of “public order” or “good morals”.

(5) The Model Law requires the possible appointed conciliator to disclose without

any delay, including throughout the conciliation process, any circumstances “likely to give rise to justifiable doubts” regarding the conciliator’s “impartiality or independence”. I.e., the default in such circumstances is disclosure to the parties.

The Israeli Regulations are much stricter in this regard, determining that the Conciliator shall refuse to accept his/her appointment in case that he/she had any previous relations with one of the parties, unless he/she disclosed such fact to the other parties, which then gave their written consent for the appointment. Hence, the default in such circumstances is refusal to be appointed. Furthermore, in the occurrence of similar circumstances as described in the Model Law (any possibility of conflict of interest, whether direct or indirect, prior and throughout the conciliation proceedings), the conciliator shall cease the conciliation process and notify the court that he/she can no longer conciliate in that dispute.

• Please note that the Sample Conciliation Agreement requires the conciliator to warrant that he/she is not dependent on any of the parties and that he/she did not have any previous professional or personal relations with any of the parties.

Thai Rules: The Thai Rules do not raise the issue of disclosure of such

justifiable doubts to impartiality or independence. However, Rule 9 of the Thai Rules is quite similar in its spirit to the Model Law; Rule 9(1) requires the conciliator to “assist the parties in an independent and impartial manner”, while Rule 9(2) determines that the conciliator shall be guided by the principles of fairness and justice. I would conclude that in order to gain the parties’ trust and confidence in such process, which is voluntary in nature, an

20 Rule 2(1).


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immediate disclosure of any justifiable doubts should take place. Hence, I recommend on adopting a similar disclosure provision into the Thai Rules.

Conciliator’s fee:

In addition to the above mentioned, the Regulations oblige the litigants to pay the conciliator a fee for his/her services (the "Fee"). The Regulations contain strict and comprehensive provisions concerning the Fee, determining that such shall be paid to the conciliator, whether the litigants have reached a settlement or not. The conciliator shall inform the litigants of the required Fee and the manner of payment, at the beginning of the cocniliation process. The conciliator’s expenses shall be paid separately from the Fee (the "Expenses"). Furthermore, the Regulations state that the litigants shall agree in advance on the amount of Fee and Expenses to be paid by each of them or shall equally bear any Fee and Expenses. The court might oblige the litigants to pay the conciliator a fixed sum of money, constitutes as a deposit of the Fee and Expenses. The Regulations also state that the court shall rule in case of dispute with respect to the Fee and Expenses. Furthermore, the Sample Conciliation Agreement states that the conciliator’s notice regarding the Fee and Expenses shall obligate the litigants. Lastly, and as shall be further discussed, the lack of payment of the Fee and Expenses shall be a sufficient reason for the conciliator to terminate the process.

The Thai Rules21 deal in details with the issue of conciliator's fee. The Rules

empower the Office to “fix the costs of the conciliation”, and define what such fee shall include22. As a default, both parties shall equally bear the conciliator's fee. In addition, Rule 16 empowers the Director to order the parties to deposit certain deposits “for the costs of the proceedings”. The lack of payment of such deposits may lead to the suspension of the proceedings by the Director.

Article 6 - Conduct of Conciliation

(1) The Model Law states that the parties are free to agree on the rules and

manner of the conciliation.

21 Rules 14-16. 22 Rule 14.


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The Law and Regulations do not mention such matter, except for the Sample Conciliation Agreement as shall be discussed in sub-section 2 below.

Sub-Article 6(1) of the Model Law is quite similar in its spirit to Article 3 of the Model Law regarding variation by agreement (except for not mentioning the cogent principles to be kept), and consists the same principals as the Thai Rules; Rule 3.

Thai Rules: The Thai Rules do not deal with such matter. The reason for such

is that the default shall be the manner and conduct under the TAI rules, unless the parties agreed otherwise, subject to principles of public order and good morals. The Thai Rules require each of the parties to submit a “written statement” describing the general nature of the dispute and the issues in dispute23. The Conciliator shall have the power to request “further facts from the parties”24.

(2) The Model Law determines that in the event that the parties can not agree on the manner and rules of the conciliation, then the conciliator shall determine such rules and manner, taking into the circumstances, the parties' wishes and the need for a speedy settlement.

The Sample Conciliation Agreement determines as a default (since the Agreement is conditioned to the parties’ changes) that the Conciliator shall be the one determining the place and date of each meeting, and shall also determine the rules and manner of the process, as long as those were not determined by other laws.

• Please note that the Sample Conciliation Agreement also allows the conciliator to manage documents' files and to write minutes of the conciliation meetings. Such documents shall be for to use of he conciliator only. In addition, the conciliator is allowed to consult with an expert and obtain such expert's opinion.

The Law, Regulations and Sample Conciliation Agreement do not mention the need for a "speedy settlement". In this regard, it is interesting to note that the Arbitration Law requires the arbitrator to act in the most efficient manner that he/she thinks will lead to a justifiable and speedy ruling of the dispute. The arbitrator is also required to give a ruling within a period of 3 months (with an additional 3 month extension).

23 Rule 8(1). 24 Rule 8(2).


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Thai Rules: The Thai Rules do not express exactly that the Conciliator may

conduct the proccedings as he/she considers approprite, subject to certain criteria. However, the Thai Rules do subject the conciliator to ceretain criteria, which are similar and even more detailed than the Model Law. The criteria that are not mentioned under the Model Law are: justice (the principle of “fairness” is mentiopned under “fair treatment”- Section 6(3)of the Model Law), usages of the trade concerned, including previous business practices between the parties25. In addtion, Rule 9(3) is more detailed, allowing the Conciliator to hear oral statements for the sake of “speedy settlement”, subject to the request of either party. Rule 10 adds another check and balance mechanism, by obligating the Director to supervise the proceedings with regard to “speediness and fairness”. To conclude, I hold the opinion that the Thai Rules are more detailed than the Model Law and no adoption neither further adjustment are needed.

(3) The Model Law sets the cogent obligations of the conciliator to maintain a

fair treatment and take into consideration the circumstances of the case.

The Regulations are much more detailed and strict than the Model Law with respect to the conciliator’s cogent obligations (supported by the Supreme Court's ruling);

(i) According to the Regulations (and as mentioned in sub-section 3 hereto), the conciliator is required to act in a fair manner, good faith and without any favoritism.

(ii) As described in sub-section 5(5) hereto, the Regulations determine that the conciliator shall avoid any of conflict of interest, and therefore shall disclose and cease acting as one in case of even a doubt of such conflict. The Sample Conciliation Agreement requires the conciliator to warrant that he/she is not dependent on any of the parties and that he/she did not have any previous professional or personal relations with any of the parties.

(iii) The Regulations also state that conciliator shall explain (if needed) the parties the nature of the process (and the differences from arbitration, conciliation or professional treatment) and the details of the Sample Conciliation Agreement.

25 Rules 9(1), 9(2).


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(iv) In addition, the Regulations require the conciliator to

explain the parties the need to consider any matter of minor or incapacitated person.

(v) Furthermore, according to the Regulations, the conciliator is banned from providing a party with any advice concerning professional matter that is not part of his/her field of specialty, and he/she shall not provide any professional opinion within the course of the conciliation even if such is part of his/her field of specialty.

a. Please note that the Regulations allow the conciliator to give a professional opinion regarding the dispute only once the process was ceased, subject to the parties' consent).

Thai Rules: The Thai Rules do not determine the principles of “independent

and impartial”26 and “fairness and justice”27 as cogent ones. I therefore, recommend on doing so.

(4) The Model Law allows the conciliator to make proposals for a settlement of

the dispute.

The Regulations states that the conciliator does not have an authority to rule in the dispute, and the Sample Conciliation Agreement, similar to the Model Law, allows the conciliator to raise proposals for a settlement of the dispute for the parties.

Thai Rules: The Thai Rules determine the same in this regard, adding that

“such proposals need not be in writing and need not be accompanied by a statement of the reasons therefore”28.

Article 7 - Communication between Conciliator and Parties

The Model Law allows the conciliator to meet or communicate with the parties together or separately.

26 Rule 9(1). 27 Rule 9(2). 28 Rule 9(4).


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The Regulations are similar to the Model Law, but in addition allow the conciliator to meet with any person related to the dispute, including separate meetings with the lawyers of any litigant.

• Please note that the Regulations state that any meeting of the conciliator with one of the parties ("litigants") without such party's lawyer shall require that party's consent.

As mentioned before, the reason for the differences between the Regulations and the Model Law derive from the concept of the Law and Regulations that deal with litigants who were addressed to a conciliation process throughout a judicial procedure.

Thai Rules: The Thai Rules do not mention a similar provision to that of

Article 7.

Article 8 - Disclosure of Information

The Model Law gives the conciliator the option to disclose any information he/she received from a party to the conciliation to any other party to the conciliation.

• Pleases note that such choice is optional since the Model Law uses the word: “may”.

The abovementioned disclosure of information shall not be exercised in the event that the disclosing party asks the conciliator specifically not to disclose such information. The Regulations are similar to the Model Law with respect to that matter. In addition, the Regulations are broader than the Model Law as for the definition of the source of such disclosed information; According to the Regulations, such information does not necessarily have to be received from a party to the process. Furthermore, the Regulations seem sharper and less vague than the Model Law with respect to the use of such disclosed information, by determining that such information shall be disclosed by the conciliator to a party to the process only [same as the Model Law] and shall be used by the conciliator for the sole purpose of the conciliation process only (except for information which he/she could obtain otherwise by using a reasonable effort).

Thai Rules: The Thai Rules do not deal with the matter of disclousre between

the Conciliator and the parties themselves. Hence, I suggest adding such provision to the Thai Rules as well.


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Article 9 - Confidentiality

The Model Law requires that all information relating to the conciliation process shall be kept confidential (unless otherwise agreed by the parties), except where such disclosure is required under the law or for the purpose of implementation or enforcement of a settlement agreement. As described in details in section 8 above, the Regulations also treat the information disclosed within the conciliation process as confidential - but only from the conciliator’s point of view. The Regulations (as well as the Law or the Sample Conciliation Agreement) do not obligate the parties to keep any information as confidential. An explanation to that might be that the broad and cogent obligation of good faith may obligate the parties to act in a confidential manner.

Thai Rules: The Thai Rules contain a similar confidentialy provision29.

However, there are several differences: The Thai Rules refer to the “Office and the Conciliator”, while the Model Law is general and applies to “all information”. I belive that a general draft will be more suitable, since the parties themselves and other third parites should be subject to confidentialy. Hence, I recommend on changing the wording of the Thai Rules accordingly. In addition, I recommend on adding the exception of “except where disclosure is required under the law...” to avoid any possible legal conflicts.

Article 10 - Admissibility of Evidence in Other Process

(1) The Model Law specifies several details, information, proofs and other by-products of the conciliation, stating that those shall not be introduced as an evidence in a judicial process (i.e. shall be deemed as inadmissible evidence), including the fact that a party has refused to accept a proposal for settlement made by the conciliator.

(2) The Model Law further states that the above mentioned provision shall apply

irrespective of the form of the information or evidence referred to therein.

(3) The Model Law also obligates arbitral tribunal, court or other competent governmental authority not to accept such information mentioned above,

29 Rule 12.


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unless the disclosure of such information is required under the law or for the purpose of implementation or enforcement of a settlement agreement.

(4) The above mentioned provisions shall apply whether or not the arbitral,

judicial or similar proceedings relate to the dispute.

(5) The conciliation process does not null the admissibility of an evidence that otherwise would have been admissible, subject to the provisions of sub-section 1 mentioned above.

The Law and Regulations are very brief regarding that matter; the Law states that any information provided within the conciliation process shall not serve as evidence under any judicial civil process. The Regulations require the judge to explain such matter to the litigants and to further bring to their knowledge that their refusal to initiate a conciliation process or the cease of the process shall not affect the result of the judicial process (similar to the Model Law).

Thai Rules: The Thai Rules are very similar to the Model Law regarding such

matter. Both deal with inadmissiblity of evidences produced during the conciliation process and prohibit the conciliator from testifying in another process30. However, please note that the Model Law is more comprehensive and covers more matters that are consireded inadmissible than in Rule 18, i.e.: A party’s invitation for conciliation, a document prepared solely for the conciliation and the determination that such provision “applies irrespective of the form of the information or evidence referred to therein31”. In addition, the Model Law covers “arbitral, judicial or similar proceedings”32, while the Thai Rules refer to the first two mentiond. Another important difference is the Model Law’s specific determination that all such information disclosed, “shall be treated as inadmissible” except when such information is “required under the law” or for “implementation or enforcement of a settlement agreement”33. For some reason, the Thai Rules do not contain such provision, although the Rule dealing with confiodentiality, uses the same wording and exempts the requirement of confidentiality when “implementation and enforecement” are needed34. I strongly suggest on adding a similar provision to the Thai Rule dealing with evidences produced during the conciliation proceedings35 by adding a specific

30 Rule 17 and Rule 18. 31 Articles 10(1)(a), 10(1)(f), 10(2). 32 Article 10(1). 33 Article 10(3). 34 Rule 12. 35 Rule 18.


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provision regarding inadmissibility of such evidences produced during the conciliation proceedings, and exemption from such requirement when it is required under the law or for implementation or enforcement of the settlelemnt agreement. I also advise on including more information to be considered as inadmissible as a party’s invitation for conciliation, a document prepared solely for the conciliation and the determionation that such provision “applies irrespective of the form of the information or evidence referred to therein”. A wider defintion including any “similar process” will be advisable as well.

I further recommend on adding a similar provision as Article 10(5) of the

Model Law: “Subject to the limitations of paragraph 1 of this article, evidence that is otherwise admissible in arbitral or judicial or similar proceedings does not become inadmissible as a consequence of having been used in a conciliation”.

Article 11 - Termination of Conciliation Proceedings

According to the Model Law, the conciliation process may be terminated in the following events:

(a) The conclusion of a settlement agreement; (b) Declaration of the conciliator, after consulting with the parties, that there is

no longer any justification for the process; (c) Declaration of termination made by the parties to the conciliator; (d) A termination declaration of a party to the other parties and the conciliator.

The Regulations are similar in a way to the Model Law, but much more detailed regarding the conciliator's abilities to terminate the process, as shall be described below: (a) As for the any party's termination of the process: The Regulations allow

any party to terminate the process upon a written termination notice (the Regulation state that in such case the litigant may ask the court to renew the judicial procedures).

(b) As for the conciliator's choice to terminate the process, the Regulations are much more detailed than the Model Law regarding the possible reasons for such termination (more than the reason of un-justification of the process) and allow the conciliator to terminate the process, if it is in his/her opinion that one of the following reasons have occurred (in addition to the obligation of the conciliator to cease the process in case of conflict of interest, as described in detailes in sub-sections 5(5) and 6(3) above):

(i) The matter is not suitable for a conciliation process;


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(ii) One or all of the parties do not act in good faith, or are not

cooperative with the conciliator; (iii) One or all of the parties do not disclose the necessary

information for the process; (iv) There is no possibility to achieve a settlement agreement; (v) The fore coming settlement agreement is not-legal, un-moral,

or contradicts the public policy; (vi) The fore coming settlement agreement is clearly not fair; (vii) The fore coming settlement agreement is not considering the

matter of a minor or incapacitated person related to the dispute;

(viii) A substantial damage might be caused to a third party, as a result of the settlement agreement;

(ix) The litigants do not pay the conciliator's Fee or Expenses.

• Please note, that in addition to the Regulations' detailed provisions regarding such matter, the conciliator is required to inform the court of his/her decision to terminate the process without specifying his/her reasons including the conciliator’s opinion in any matter related to the process, except as described in sub-section 6(3)(v)(a) above.

Thai Rules: Article 11 of the Model Law is similar to Rule 13 of the Thai

Rules. However, the Thai Rules determine that each such declaration of termination shall be in writing. I belive that a written declaration is usefull and therefore should be kept as such. In addition, the Model Law requires the conciliator to consult with the parties before he/she declars that further efforts at conciliation are no longer justified36. Since the the conciliation process is voluntarily in nature, I advise on adding a similar provision to the Thai Rules as well.

Article 12 - Conciliator Acting as Arbitrator

The Model Law forbids the conciliator, as a default option, to act as an arbitrator with respect to matters arisen or otherwise related to the dispute, unless otherwise agreed by the parties.

36 Article 11(b).


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The Regulations state that the conciliator shall not be constituted as a party to the dispute agreement and he/she is not be obliged under any obligations or was granted any rights under such agreement. The Sample Conciliation Agreement also determines that the conciliator shall not be responsible for the results of the process. The Regulations however allow the litigants to agree that the conciliator shall be appointed as an arbitrator after the process has terminated. The Sample Conciliation Agreement's spirit is similar to the Model Law with respect to the said matter; the Sample Conciliation Agreement states that the conciliator is obliged not to give any professional services to the litigants in the future in any matter related to the dispute, without the consent of the other litigants.

Thai Rules: The Thai Rules are similar to the Model Law in such aspect37. The

Rules go even further by determining that a conciliator shall not act as “a representative or counsel” in addition to an arbitrator, in matters related to the dispute.

Article 13 - Resort to Arbitral or Judicial Proceedings

According to the Model Law, any arbitral tribunal or court should respect the parties' undertaking not to initiate any arbitral or court proceedings during such time or event of conciliation (only if such undertaking was expressly made), except that any party would think it is necessary for preserving such party's rights. The initiation of such proceedings shall not be regarded as a waiver concerning the conciliation. The Law and Regulations state that the judicial process shall be suspended for the period of time authorized by the court (subject to the court's ability to extend such period upon the litigants' request), and that once the conciliation process has ceased, the court shall order the renewal of the judicial process (in case of a conciliation which took place during a judicial process).

o Please note that the Arbitration Law has a similar provision to the Model Law, in which the court shall respect the mutual consent of the parties for arbitration in matter of any dispute, and therefore shall withhold the judicial procedures for that purpose, subject that the party asking such withheld shall be willing to take all the necessary requirements to conduct such

37 Rule 2(2).


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arbitration process, and except for the court's opinion that there is a special reason not to hold an arbitration process regarding such dispute.

Thai Rules: The Rules also prohibit the parties from “bringing the dispute...in

court or by arbitration”, upon the parties’ agreement38. However, please note that the Thai Rule referes to the parties, while the Model Law addresses to the “arbitral tribunal or the court”. Perhaps shch provision allows the court/arbitrator themselves to refrain from hearing the case, and refer such to conciliation. I strongly advise on incorporating into the Thai Rules a similar provision limiting such prohibition “to the extent necessary for a party, in its opinion, to preserve its rights”39.

In addition, please note that the Thai Rules40 allow, if requested by the parties,

to include an arbitration clause in which any dispute arising out of or relating to the settlement agreement shall be submitted to arbitration.

Article 14 - Enforceability of Settlement Agreement

According to the Model Law, the settlement agreement between the parties shall be binding and enforceable. The Regulations are very detailed with respect to the settlement agreement; According to the Regulations, once the litigants have reached into a settlement, they or the conciliator shall conduct such settlement in writing, and shall detail in it all the conditions for the settlement of the dispute. The litigants will sign the settlement agreement, and the conciliator shall execute it by his or her signature. In addition, the conciliator is obligated to inform the court of the settlement agreement as soon as possible. The Law allows the litigants to ask the court to give the settlement agreement a validity of a court ruling (in such case the Regulations require the conciliator to provide the court with the agreement attached to his/her notice and the Regulations further detail the legal procedure for such request). • Please note that the court may summon the litigants in order to get their

explanation regarding the settlement agreement.

38 Rule 4. 39 Article 13. 40 Rule 11(2).


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The Sample Conciliation Agreement also states that the status of the settlement agreement is of a contract and the court may give it a validity of a court ruling.

Thai Rules: The Thai Rules do not contain a similar provision. Hence, I advise

on including such in the Thai Rules as well.

In addition, I would like to note that the Thai Rules require the conciliator to “draw up the settlement agreement” in the event that the parties have reached an agreement as to their dispute. “The parties shall then sign the settlement agreement”41. I belive that such provision is an important and useful one.

41 Rule 11(1).


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