Singapore Convention on Mediation Launched

North of England’s Helen Barden, Senior Solicitor (FD&D) and Sarah McCann, Solicitor (FD&D) have written on The United Nations Convention on International Settlement Agreements Resulting from Mediation (New York, 2018) (the Singapore Convention on Mediation), a new international convention aims to help enforce settlement agreements which have arisen out of commercial mediation, recognizing “the value of mediation as a method of amicably settling disputes arising in the context of international commercial relations.”

The authors said that the Convention should encourage businesses to mediate cross-border disputes rather than going straight to the courts or tribunals. It would give the parties greater certainty that agreements reached would be enforceable. Some of the large economic powers in the world, including the US and China, have signed the Convention.

The authors accepted that, as with the New York Convention, which recognizes the enforcement of foreign arbitration awards, it would take time for the Convention to build up support. In addition, only time will tell how the Convention would work in practice, as it would depend on the local laws where the settlement agreement was to be enforced.

The arbiters said that it seemed necessary for the parties who wished to rely on the Convention to address this at the mediation and settlement agreement stage. The Convention states that:

“A Party to the Convention may declare that…it shall apply…only to the extent that the parties to the settlement agreement have agreed the application of [the] Convention”.

Therefore, said Barden and McCann, it might be wise for the parties to expressly refer to their agreement to the application of the Convention within the terms of the settlement agreement. In addition, as evidence that the settlement agreement arose from a mediation, a paragraph could be included in the mediation agreement, which should be signed by the parties and the mediator, that the parties agree it is a mediation for the purpose of the Convention.

However, the writers conceded that whether this would constitute sufficient evidence for the purpose of enforcing the settlement agreement under the Convention in all participating countries, remained to be seen.

It was also worth noting, in the same way that countries might be reluctant to enforce an arbitration award under the New York Convention where they considered the arbitrator not to be impartial, the Singapore Convention on Mediation stipulated that a ground for refusing to enforce a settlement agreement would be where they considered the mediator not to be impartial. Also, what would give reason to doubt a mediator’s impartiality in one country might be different in another.

The writers concluded that how the Convention would work in practice remained to be seen. There seemed to be no reason in theory why it should not be as successful as the New York Convention. The hope was that it would encourage commercial parties to mediate disputes where appropriate.