Singapore has launched a convention on mediation that aims to help enforce settlement agreements which have arisen out of commercial mediation.
On August 7th a new UN treaty, the UN Convention on international settlement agreements resulting from mediation (the Singapore Convention on Mediation) was open for signature at a ceremony at the Shangri-La Hotel, Singapore. Singapore became the first among 46 countries including China, India and the USA to sign the treaty, which will come into force at a later date.
Adopted by the UN general assembly in December last year, the Singapore convention on mediation provides for cross-border enforcement of international commercial settlement resulting from mediation in member states which in turn, gives businesses greater certainty, assurance and facilitates international trade and commerce.
The UN Singapore Convention on Mediation is intended to encourage businesses to mediate cross-border disputes instead of going straight to the courts or tribunals. It will give the parties greater certainty that the agreements will be enforceable.
The working of the Convention will depend on the local laws where the settlement agreement is to be enforced.
Prior to the introduction of the treaty, parties lacked an efficient and harmonised framework for cross-border enforcement of settlement agreements resulting from mediation. The Singapore convention on mediation responds to this need with the twin goals of facilitating international trade and promoting the use of mediation for the resolution of cross – border commercial disputes.
The Singapore convention on mediation has been hailed as the ‘missing piece’ in the enforcement framework of international disputes which up till now includes the convention on the recognition and enforcement of foreign arbitral awards (the New York convention) and the Hague convention on choice of court agreements designed to assist cross-border enforcement of arbitration awards and court judgments, respectively.
North of England Club’s Helen Barden Solicitor (FD&D) and Sarah McCann Solicitor (FD&D) noted that the Convention reads: “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, they said, 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.”
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.
Barden and McCann observed that 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 was not impartial, the Singapore Convention on Mediation stipulated that a ground for refusing to enforce a settlement agreement was where they considered the mediator was not impartial”
In yesterday’s piece on the new Singapore Convention on Mediation I erroneously listed “Helen Barden Solicitor (FD&D) and Sarah McCann Solicitor (FD&D)” as working for Standard Club. In fact they work for North of England P&I Club. Apologies for the mistake.