Singapore Convention on Mediated Settlement Agreements comes into force tomorrow, 12 September 2020

Tomorrow marks an important day for international dispute resolution as the Singapore Mediation Convention comes into force, just over a year after its signing ceremony on 7 August 2019.  More formally known as the United Nations Convention on International Settlement Agreements Resulting from Mediation, the new Convention aims to establish a global enforcement regime for settlement agreements resulting from mediation of international commercial disputes, broadly akin to the 1958 New York Convention for the enforcement of arbitral awards.

To date, a total of 53 states have signed the Convention and 5 states have either ratified (Singapore, Fiji, Qatar and Saudi Arabia) or approved (Belarus).  However, a key feature of the Convention that has not been widely appreciated is that it will apply to mediations conducted anywhere in the world, not just within jurisdictions that have ratified it. Any jurisdiction that ratifies/approves the Convention agrees to enforce any mediated settlement agreement covered by the Convention, regardless of where the mediation was conducted. Accordingly, the fact that it has not yet been signed by the UK or the EU does not mean that it cannot be relied on to enforce settlements resulting from mediations held in those jurisdictions.

Of course, at this early stage, the Convention can only be relied on to facilitate enforcement in the current member states. However, given that 48 other countries have already taken the first step of signing the Convention, it seems likely that this list could soon increase substantially. And the fact that those countries include the world’s three largest economies – China, the US and India – bodes well for the Convention becoming an important element of the global dispute resolution landscape.

By way of background, the Convention stems from a concern that the use of mediation to resolve international disputes has been impeded by the fact that, unless a settlement reached via mediation is in the context of a pending arbitration and can be converted into an arbitral award, parties could only enforce it in the same way as any other contract. That would usually involve bringing fresh proceedings for breach of contract. In an international context, this could involve potentially difficult (and usually lengthy) processes to obtain a court judgment and then enforce it in a foreign jurisdiction.

It is important to note that, in practice, enforcement of mediated settlements is in fact rarely an issue (at least compared to litigation and arbitration), given that both the decision to mediate and the agreed resolution are voluntary, rather than imposed upon the parties. Having negotiated and documented a resolution through a formal process, commercial parties do for the most part tend to stick to it. Nevertheless, it had become clear in recent years that the lack of a formal enforcement process could account for at least some of the patchiness with which mediation has been embraced across different jurisdictions globally. This is supported by our analysis of the data collected at the recent Global Pound Conference series. That project sought the views of thousands of dispute resolution stakeholders across the globe on various issues, including as to what would most improve commercial dispute resolution. Particularly in Asian jurisdictions, nearly two thirds of respondents said that what would be of most benefit would be  legislation to aid enforcement of settlement agreements.  In other regions, this was seen as less pressing than other factors but still received substantial support. The new Convention directly meets this call for regulation and certainty.

Further detail:

For detail on when and how the new Convention will operate, see our earlier post here.

For commentary on some practical issues for mediating parties to consider now,  see an article by Jan O’Neill (Professional Support Lawyer, London ) published on the Practical Law Dispute Resolution Blog here.  Also, click here to hear Jan more recently considering the implications of the Convention in a podcast discussion with the Managing Director of CEDR, James South.

For guidance more generally on incorporating mediation and other forms of ADR  into your business, see our ADR Toolkit here.

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Signatories as at 12 September 2020: Afghanistan, Armenia, Belarus, Benin, Brunei Darussalam, Chad, Chile, China, Colombia, Congo, Democratic Republic of the Congo, Ecuador, Kingdom of Eswatini, Fiji, Gabon, Georgia, Ghana, Grenada, Guinea-Bissau, Haiti, Honduras, India, Iran, Israel, Jamaica, Jordan, Kazakhstan, Laos, Malaysia, Maldives, Mauritius, Montenegro, Nigeria, North Macedonia, Palau, Paraguay, Philippines, Qatar, Rwanda, South Korea, Samoa, Saudi Arabia, Serbia, Sierra Leone, Singapore, Sri Lanka, Timor Leste, Turkey, Uganda, Ukraine, the US, Uruguay, Venezuela.

Ratified/approved by:  Singapore, Fiji, Saudi Arabia, Belarus (approved with reservations), Qatar

Alexander Oddy
Alexander Oddy
Partner, London
+44 20 7466 2407
Jan O'Neill
Jan O'Neill
Professional Support Lawyer, London
+44 20 7466 2202
Priya Aswani
Priya Aswani
Professional Support Lawyer, Singapore
+65 68688077

 

Singapore Convention on Mediated Settlement Agreements to enter into force on 12 September 2020

From 12 September 2020, all international settlement agreements resulting from mediation will potentially be able to be enforced under the new Singapore Convention, regardless of where in the world the mediation took place.

Article 14 of the Singapore Convention provides that it will enter into force six months after three signatory states have ratified it into their domestic law. We have previously reported that Fiji and Singapore deposited their instruments of ratification on 25 February 2020. On 12 March 2020, Qatar became the third state to ratify the Convention, meaning that the Convention will enter into force on 12 September 2020 – just over a year after its signing ceremony on 7 August 2019. Continue reading

The new Singapore Convention: Some practical issues to consider now

As has been well publicised, the new Singapore Convention seeks to establish a global enforcement regime for settlement agreements resulting from mediation in cross-border commercial disputes. Signed on 7 August 2019 by 46 countries, the Convention could feasibly be in operation as early as the first half of next year (it will enter into force six months after ratification by at least three signatory states).

One feature of the Convention that has not been widely highlighted is the fact that, once it enters into force, it will apply to mediations conducted anywhere in the world, not just within jurisdictions that have ratified it. This is because, unlike most other enforcement treaties, it does not operate on the basis of reciprocity between contracting states.  It will therefore be advisable for all mediating parties, regardless of whether their home state ever ratifies the Convention, to factor into their mediation procedures the potential to rely on the Convention should enforcement become necessary.

It is therefore timely to consider a number of practical issues emerging from the Convention, which litigants and their representatives should be turning their minds to now with a view to putting themselves in the best position to take advantage of the Convention in the future should the need arise.

Jan O’Neill in our London disputes team has published a post on the Practical Law Dispute Resolution Blog discussing a number of such practical issues. Click here to read the post.

(For more commentary on the Singapore Convention, see also Jan’s earlier blog post here.)

 

Jan O'Neill
Jan O'Neill
Professional Support Lawyer, London
+44 20 7466 2202