Arbitration

The Mediation Unit of the Office of the Ombudsman is currently designing an arbitration project, more information about which will be available on the website soon.

As part of its efforts to improve ways of responding to grievances, the Office proposed in its 2019 Annual Report (consistent with its Annual Reports of 2017 and 2018) that, on an interim basis, “the five [funds and programmes] organizations support the development of a specialized training programme and the provision of other arbitration access services.” To that end, the Office periodically conducts global arbitration webinars to raise awareness of the complexities involved in the arbitration proceedings and the benefits of informal resolution.

As per its mandate that includes “address[ing] work-related issues through … providing … information”, “exploring a range of options,” and “advis[]ing and mak[ing] suggestions or recommendations, as appropriate, on actions needed to settle conflicts” (see para 3.15-3.16 of the ToR, ST/SGB/2016/7) the Office provides information, inter alia, related to arbitration as one option to resolve disputes involving non-staff personnel and explores informal options to settle those. In addition, the Office encourages parties to seriously consider mediation prior to resorting to arbitration.

To learn more about mediation and its benefits, please visit our mediation page. You can find useful materials on mediation, including a mediation guide, mediation newsletters, interviews by our mediators within the “Peace at work” project, the profiles of our mediators, and much more.

Arbitration is a formal dispute resolution process, agreed upon by all parties, in which one or more arbitrators make a decision that is binding on the parties. Arbitration follows specific arbitration rules, chosen by the parties. The arbitrator´s decision is subject to limited appeal mechanisms. In the United Nations context, arbitration is the only formal mechanism included in non-staff contracts to resolve disputes. This means that in case of a dispute the non-staff member and the organization will determine all the features of arbitration.

The following are the key principles of arbitration and how they apply for the funds and programmes agencies:

• Consent

Arbitration is only an option if both parties have agreed to it. In the five agencies, all non-staff contracts include arbitration clauses, which means the parties have agreed to arbitration in advance.

• The Parties Choose the Arbitrator(s)

Normally, the parties can choose the number of arbitrators as well as who the arbitrator(s) will be. Both parties pay for the costs of such arbitrators. In addition to the selection of arbitrators, the parties also choose the applicable law, the language, and venue of the arbitration, among others.

• Neutrality and Independence

Arbitration is a neutral process in all contexts. This means that arbitrators do not take sides and cannot be biased toward one or another party. They must be neutral and independent throughout the entire process.

The arbitrator is an impartial and independent third party appointed by the parties. He or she will hear each party´s case and apply the relevant laws and rules to make a ruling, which is called an “arbitral award”. The arbitration award is final and binding on the parties and can only be appealed in certain situations. Unlike a judge, the arbitrator is chosen by the parties.

Compared to mediation, arbitration typically is an expensive and lengthy process. While mediation takes, on average, from 8-16 hours, arbitration takes months and even years. Unlike the mediation services provided by the Office, which are free, arbitration services are usually fee-based. Each arbitrator and counsel have their own fees, depending upon their experience and the area in which they are practicing.

Typically, each party pays for their own lawyer, and the parties split the cost of the arbitrator´s fees and expenses. However, under the UNCITRAL Rules that apply to arbitrations between non-staff and their organizations, the costs of the arbitration are, in principle, borne by the losing party. Although arbitrator(s) have the discretion to apportion the arbitration costs at the end of the case, parties need to be mindful of their potential cost exposure prior to engaging in the process. As opposed to arbitration, mediation services provided by the Office of the Ombudsman are free.

Before filing a claim, the parties are strongly encouraged to consider resolving their dispute amicably through mediation. In fact, all non-staff contracts of the five agencies provide for an effort to reach amicable settlement before filing for arbitration. This suggestion is made with good reason, because mediation comes with a lot of benefits. Most importantly, mediation is free for all personnel and is significantly quicker than arbitration, so it can save significant financial resources and time.

The Mediation Unit of the Office of the Ombudsman for United Nations Funds and Programmes

304 East 45th Street
6th Floor, Room FF-671
New York, NY 10017
USA

mediation@fpombudsman.org