Update on the Singapore Convention on Mediation to be signed in Singapore on 7 August 2019.
Introduction
On 6 and 7 August 2019, the signing ceremony and conference for the United Nations Convention on International Settlement Agreements Resulting from Mediation, also known as the Singapore Convention on Mediation (“Convention”), will be held in Singapore. This treaty is regarded as a milestone in mediation as it will facilitate the enforcement of mediated international commercial settlement agreements, in a manner similar to how the New York Convention facilitates the recognition and enforcement of international arbitration awards. In addition, this is the first treaty concluded under the auspices of the United Nations organisation to be named after Singapore.
Background to the Convention
The United Nations Commission on International Trade Law’s Working Group II on Dispute Settlement has been working on instruments to enable the cross-border enforcement of mediated international commercial settlement agreements. On 20 December 2018, a resolution to adopt the Convention was passed by the 73rd United Nations General Assembly.
Key Features of the Convention
Some key features of this Convention are as follows:
(a) Scope of Application
The Convention will apply to international commercial settlement agreements that arise from mediation. It will not apply to settlement agreements concluded to resolve a dispute arising from transactions where one party, being a consumer, engaged in the transaction for personal, family or household purposes, settlement agreements relating to family, inheritance or employment law and settlement agreements concluded in the course of court proceedings and which are enforceable as a court judgment or arbitral award.
(b) Mode of Enforcement
The Convention does not prescribe a specific mode of enforcement but provides the conditions to be fulfilled in order for a state to enforce a settlement agreement. Each state party is to enforce a settlement agreement in accordance with its rules of procedure and under the conditions laid down in the Convention.
(c) Exceptions to Enforcement
A state can refuse to grant relief if one of the grounds in the Convention can be proved. The grounds on which relief can be refused include:
- A party to the settlement agreement was under an incapacity;
- The settlement agreement is, null and void, inoperative or incapable of being performed under the law which it is subjected to;
- The settlement agreement is not binding according to its terms or has been subsequently modified;
- The obligations in the settlement agreement have been performed or are not clear or comprehensible;
- Granting relief would be contrary to the terms of the settlement agreement;
- There was a serious breach by the mediator of standards applicable to the mediator, without which breach that party would not have entered into the settlement agreement;
- There was a failure by the mediator to disclose to the parties circumstances that raise justifiable doubts as to the mediator’s impartiality or independence and such failure to disclose had a material impact or undue influence on a party without which failure that party would not have entered into the settlement agreement;
- Granting relief would be contrary to the public policy of the state;
- The subject matter of the dispute is not capable of settlement by mediation under the laws of the state.
Significance of the Convention
While mediation is an increasingly popular way to resolve cross-border commercial disputes, an obstacle that has long hindered its growth is the difficulty in ensuring that parties comply with the terms of the mediated settlement. As mediated settlement agreements are merely contractual in nature, they cannot be directly enforced in courts unlike court judgements and arbitral awards.
The significance of the Convention is that it addresses this obstacle by offering an effective means to enforcement of mediated international commercial settlement agreements, akin to how the New York Convention facilitates the recognition and enforcement of international arbitration awards.
The ability to enforce a mediated settlement agreement internationally will encourage parties to come to the mediation table in order to resolve their disputes. In addition, the Convention will signal the recognition of mediation as a meaningful means of resolving cross-border commercial disputes, promoting the use of mediation as a mode of dispute resolution.
Apart from promoting the use of mediation, the Convention is also expected to cement Singapore’s position as an international dispute resolution centre. Prior to the enactment of this Convention, Singapore has already taken steps to provide a full suite of services for the resolution of disputes in Singapore, such as by enacting the Mediation Act 2017, which enables, amongst other things, mediated settlement agreements to be recorded as orders of court.
For further information contact:
Philip Fong
Managing Partner
Head, Litigation and Dispute Management
Eversheds Harry Elias
philipfong@eversheds-harryelias.com
+65 6361 9819