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.

At this stage, the Convention will only apply where a settlement agreement is sought to be enforced (or relied on as a defence) in the ratifying states – Singapore, Qatar or Fiji. However, given that 49 other countries have already taken the first step of signing the Convention (including China and the US), it seems likely that this list could soon increase substantially.

For more detail on when and how the new Convention will operate (including what qualifies as an ‘international’ settlement agreement), see our earlier post here.

The Convention’s imminent entry into force presents an opportune moment for a refresher on some of the practical issues that emerge from its legal framework. 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, which those involved in mediations should be turning their minds to now. Click here to read that post.

 

Tomas Furlong
Tomas Furlong
Partner, Singapore
+65 6868 8085
Gitta Satryani
Gitta Satryani
Of Counsel, Singapore
+65 6868 8067
Priya Aswani
Priya Aswani
Professional Support Lawyer
+65 6868 8077

Singapore and Fiji ratify the Singapore Convention on Mediated Settlement Agreements taking a significant step towards its entry into force

Yesterday, on 25 February 2020, Singapore and Fiji became the first two countries to deposit at the United Nations Headquarters their instruments of ratification of the Singapore Convention, more formally known as the United Nations Convention on International Settlement Agreements Resulting from Mediation. Singapore and Fiji have taken an important step towards bringing the Singapore Convention closer to coming into force.

The Convention will commence operation six months after three signatory states have ratified it into their domestic law.  All it will now take therefore, for the clock to start ticking, is one more signatory state to deposit its instrument of ratification at the United Nations headquarters in New York.

Earlier this month, on 4 February 2020, the Singapore Convention on Mediation Bill was passed into law, though its provisions have yet to come into effect.  The Bill was effectively fast-tracked through the Singapore Parliament given it was only tabled on 6 January 2020 for its first reading.  The main purpose of enacting the Bill was to implement the Convention in Singapore and therefore allow for ratification.

The Singapore Convention was first opened during a signing ceremony and conference held in Singapore on 7 August 2019, where Singapore hosted more than 1500 delegates from 70 countries.  46 countries signed the Convention on the day.  In the months following the signing ceremony, 6 other countries signed the Convention bringing the current total number of signatories to the Convention to 52.  For more information on the signing ceremony and conference in August 2019, please click here and here to read our previous posts.  A full current list of the signatories can be found at the foot of this blog post.

Speaking in Parliament on 3 February 2020, during the second reading of the Bill, Senior Minister of State for Law in Singapore Edwin Tong stated that a key challenge that parties face when dealing with a business dispute which has settled is ensuring the counterparty complies with the terms of the agreement. While a mediated settlement agreement is contractually binding, it is not itself directly enforceable in courts unlike a court judgment or an arbitral award.  He emphasised that this difficulty was also highlighted by the 2016 Global Pound Conference Survey where respondents indicated that legislation or conventions that promote the recognition and enforcement of settlements including those reached in mediation would most improve commercial dispute resolution.

The Singapore Convention is an answer to a number of themes we observed at the Global Pound Conference series. That series sought the views of thousands of dispute resolution stakeholders across the globe on various issues, including which developments would most improve commercial dispute resolution.   The Convention’s proper impact however, and in particular whether it will be as significant as the New York Convention, remains to be seen. Meaningful engagement by signatory states through their domestic institutions, practitioners and businesses is required. In addition, making effort to promote ratification by signatory states will be important, as will be continued engagement with states that have not yet signed the Convention. Singapore and Fiji’s ratification, nevertheless, is an important step forward in building this international framework supportive of mediation.

 

Signatories as at 25 February 2020: Afghanistan, Armenia (26 Sep 2019), Belarus, Belize, Brunei, Chad (26 Sep 2019), Chile, China, Colombia, Republic of the Congo, Democratic Republic of the Congo, Ecuador (25 Sep 2019), Kingdom of Eswatini, Fiji, Gabon (25 Sep 2019), Georgia, Grenada, Guinea-Bissau (26 Sep 2019), Haiti, Honduras, India, Iran, Israel, Jamaica, Jordan, Kazakhstan, Laos, Malaysia, Maldives, Mauritius, Montenegro, Nigeria, North Macedonia, Palau, Paraguay, Philippines, Qatar, Rwanda (28 Jan 2020), South Korea, Samoa, Saudi Arabia, Serbia, Sierra Leone, Singapore, Sri Lanka, Timor Leste, Turkey, Uganda, Ukraine, the US, Uruguay and Venezuela. The rest of the countries signed the Convention on 7 August 2019.

 

Tomas Furlong
Tomas Furlong
Partner, Singapore
+65 6868 8085
Gitta Satryani
Gitta Satryani
Of Counsel, Singapore
+65 6868 8067
Priya Aswani
Priya Aswani
Professional Support Lawyer
+65 6868 8077

46 countries sign the Singapore Convention on mediated settlements today

After extensive discussions between member states, the United Nations Convention on International Settlement Agreements Resulting from Mediation, also known as the Singapore Convention, was signed today. A total of 46 countries signed the Convention, including the world’s two largest economies, the US and China, and several of the largest economies in Asia. This is the highest number of first-day signatories of a UN trade convention to date. A full list of signatories can be found at the foot of this blog post. It is understood that further states are planning to sign the Convention in the near future.

With this Convention, the role of mediation in cross-border disputes is strengthened. The status of mediation is elevated and enforcement is simplified. The occasion is a momentous one in recent legal history. We discuss its impact below.

Mediation and enforcement

Mediation is an informal and confidential process, where a neutral mediator helps parties to bridge their differences and repair working relationships. It is usually quick and inexpensive and has a high success rate.  The goal is that the parties reach a settlement at (or soon after) the mediation, thereby avoiding costly litigation or arbitration. The parties should record any settlement in a binding settlement agreement. Should a party refuse to honour the terms of the settlement agreement, the counterparty(ies) may sue on the settlement agreement as a contract for breach of contract.

In practice, enforcement is not normally an issue as the parties reach a negotiated settlement voluntarily. However, if problems do arise, enforcement can become a procedural headache, particularly in cross-border situations, where a party may have to go to court in the counterparty’s jurisdiction and start proceedings to enforce the settlement. The mediated settlement agreement can become another step on an ultimately longer dispute resolution journey.

Where litigation or arbitration is already on foot, mediated settlements may be recorded as part of those proceedings and potentially be enforced as a judgment or arbitral award. Arb-med-arb clauses have even evolved (for example, Singapore’s SIMC/SIAC Protocol), to aid enforcement of mediated settlements. These require arbitration to be started before the parties go to mediation and, if the parties settle at mediation, the settlement is enforceable under the New York Convention 1958 as a consent award.

Looking at the overall dispute resolution framework, the Hague Convention on Choice of Court Agreements and the new Hague Judgments Convention are designed to assist enforcement of court judgments internationally (though with limited uptake to date). The New York Convention has hugely benefited international arbitration, with enforcement regarded as arbitration’s trump card. In many ways, the Singapore Convention is the missing piece in the enforcement jigsaw.

The impact of the Singapore convention

The Singapore Convention applies to settlement agreements resulting from mediations resolving cross-border commercial disputes. It provides a standardised framework for enforcement within signatory states, much like the New York Convention for arbitral awards.

The Singapore Convention seeks to give mediated settlement agreements bite by recognising the enforceability of the agreements, if they meet the following criteria:

  1. The settlement agreement is “international” – meaning either: (i) at least two or more parties to the agreement have their place in business in different countries or (ii) the country with close connection to the performance of the settlement agreement is different to the place of business of the parties;
  1. The agreement is signed by the parties and “resulted from mediation”. Mediation is defined broadly as “a process, irrespective of the expression used or the basis upon which the process was carried out, whereby the parties attempt to reach an amicable settlement of their dispute with the assistance of a third person or persons (the “mediator”) lacking the authority to impose a solution upon the parties to the dispute”;
  1. The agreement does not fall within the excluded category of settlement agreements. The excluded category includes settlement agreements relating to family, inheritance or employment law and consumer disputes.
  1. None of the listed grounds to refuse enforcement applies.

If a settlement agreement meets these criteria, each signatory state to the Convention (and its courts) should recognise and enforce the agreement in accordance with its own rules, without substantive review or fresh litigation. This should aid enforcement against assets located in the signatory state and the discharge of other remedies like specific performance or injunctions. Also, if a dispute arises in a signatory state and a party claims it was already resolved by the agreement, the party can invoke the settlement agreement to prove that the matter has already been resolved on those terms.

The Convention therefore provides greater certainty to parties in international transactions who have reached a settlement of their dispute through mediation.

Conclusion

The Singapore Convention is an answer to a number of themes we observed at the Global Pound Conference series. That series sought the views of thousands of dispute resolution stakeholders across the globe on various issues, including which developments would most improve commercial dispute resolution. Nearly two thirds of respondents in Asia nominated legislation to aid enforcement of settlement agreements, including those reached through mediation. In other regions, this was seen as less pressing than other factors but still received substantial support. (see below)

The Singapore Convention will formally come into effect following ratification by at least three signatory states. Its full impact, and in particular whether it will be as significant as the New York Convention, remains to be seen. Meaningful engagement by signatory states through their domestic institutions, practitioners and businesses is required. In addition, engagement with states that have not yet signed it will also be important. Nevertheless, today is an important step forward in building an international framework supportive of mediation.

For commentary on some of the Convention’s more interesting features, please see Jan O’Neill (Professional Support Lawyer, London)’s article published on the Practical Law Dispute Resolution Blog here.

You can find our guidance on multi-tiered dispute resolution clauses, dispute avoidance and improving conflict management here.

Signatories as at 7 August 2019: Afghanistan, Belarus, Belize, Brunei, Chile, China, Colombia, Republic of the Congo, Democratic Republic of the Congo, Kingdom of Eswatini, Fiji, Georgia, Grenada, Haiti, Honduras, India, Iran, Israel, Jamaica, Jordan, Kazakhstan, Laos, Malaysia, Maldives, Mauritius, Montenegro, Nigeria, North Macedonia, Palau, Paraguay, Philippines, Qatar, South Korea, Samoa, Saudi Arabia, Serbia, Sierra Leone, Singapore, Sri Lanka, Timor Leste, Turkey, Uganda, Ukraine, the US, Uruguay and Venezuela. 

 

For more information, please contact the authors.

Tomas Furlong
Tomas Furlong
Partner, Singapore
+65 6868 8085
Anita Phillips
Anita Phillips
Foreign Legal Consultant (England & Wales), Hong Kong
+852 2101 4184
Reshma Nair
Reshma Nair
Associate, Singapore
+65 6868 8002
Priya Aswani
Priya Aswani
Professional Support Lawyer, Singapore
+65 6868 8077

 

Singapore International Mediation Centre signs MOU with China International Economic and Trade Arbitration Commission and Korean Commercial Arbitration Board

The Mane Forum was held today in Singapore on the eve of a historic moment – the signing of the United Nations Convention on International Settlement Agreements Resulting from Mediation, also known as the Singapore Convention.

This morning, the Singapore International Mediation Centre signed a Memorandum of Understanding with China International Economic and Trade Arbitration Commission and Korean Commercial Arbitration Board to commit to jointly promoting mediation consulting, joint conferences and training amongst other initiatives.

There was gripping discussion in the afternoon on the differing standards applicable to mediators and mediations around the world. Singapore was urged to take the lead to form a working group with prominent mediators from different jurisdictions to explore drawing up a uniform mediation practice code and submit a draft to the United Nations for further discussion.

Also explored was the potential to use Online Dispute Resolution as an additional tool to resolve suitable disputes.

Notable speakers today included Mr Edwin Tong, SC (Senior Minister of State, Ministry of Law and Ministry of Health), Dr Noeleen Heyzer (Former Under Secretary General of the United Nations), Ms Anna Joubin-Bret (Secretary of UNCITRAL), Mr Rimsky Yuen (Former Secretary for Justice in Hong Kong SAR), and various chairpersons and heads of eminent Arbitration and Mediation centres around Asia.

 

 

 

 

 

Launch of Asia Pacific Guide to Privilege 2019

Please click here to access a preview of the Guide.

We are pleased to launch the 2019 edition of our Asia Pacific Guide to Privilege.

Businesses are increasingly faced with multi-jurisdictional disputes where evidence rarely falls within the borders of a single country and complex legal privilege issues often surface when dealing with communications across multiple jurisdictions.

Compiled by our network of Herbert Smith Freehills lawyers and trusted local counsel, the updated Guide takes account of the latest developments across Asia Pacific and covers 21 jurisdictions.

Many enforcement actions either emanate from or involve long-arm jurisdictions outside Asia and span across many jurisdictions in Asia. Given for example the English Bribery Act’s broad jurisdiction and extra-territorial reach coupled with aggressive enforcement agencies, clients around Asia ought to understand how the authorities in England will apply the law of privilege, in addition to how the law is applied across Asia. Moreover, although English case law is persuasive in most common law jurisdictions, legal advice privilege is an area in which a number of common law jurisdictions, such as Australia, Hong Kong and Singapore, have chosen to depart from English case law. Given the spotlight on these issues, we have added a new chapter on England & Wales and a related comparative question in each of the other 20 chapters across Asia-Pacific.

We hope that this comprehensive Guide will be useful particularly to multinational companies who operate numerous subsidiaries across borders.

Please email asia.publications@hsf.com to request a hard copy of the Guide.

 

Peter Godwin
Peter Godwin
Regional Head of Practice - Dispute Resolution, Asia, Managing Partner - Kuala Lumpur
+60 3 2777 5104
Gareth Thomas
Gareth Thomas
Partner, Head of Commercial Litigation, Hong Kong
+852 2101 4025
Alastair Henderson
Alastair Henderson
Managing Partner - Southeast Asia
+65 6868 8058
May Tai
May Tai
Managing Partner - Greater China
+852 2101 4031
Dominic Geiser
Dominic Geiser
Partner, Hong Kong
+852 2101 4629
Peter Butler
Peter Butler
Partner, Sydney
+61 2 9225 5686
Helen Tang
Helen Tang
Partner, Shanghai
+86 21 2322 2160
Julian Copeman
Julian Copeman
Partner, London
+44 20 7466 2168
Narendra Adiyasa
Narendra Adiyasa
Partner, Jakarta
+62 21 3973 6108
David Gilmore
David Gilmore
Partner, Tokyo
+81 3 5412 5415
Mike McClure
Mike McClure
Partner, Seoul
+82 2 6321 5701
Chinnawat Thongpakdee
Chinnawat Thongpakdee
Partner, Bangkok
+66 2 857 3829

 

 

New convention on cross-border recognition and enforcement of civil and commercial judgments

The final text of the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (the Convention) was agreed on 2 July 2019.

The Convention promotes greater certainty in cross-border dealings and aims to reduce the timeframe for recognition and enforcement of judgments, by enabling the free circulation of judgments in civil and commercial matters across borders.

Uruguay became the first state to sign the new Convention, however it will only enter into force after it has been ratified by at least two contracting states. Continue reading

LAUNCH OF HSF’S NEW BANKING LITIGATION BLOG

Herbert Smith Freehills has launched a new banking litigation blog, which you can find at https://hsfnotes.com/bankinglitigation.

The blog will bring you the latest banking litigation developments of interest to financial institutions, delivered with speed and sector insight. The blog will also be used as a platform to house previously published e-bulletins / podcasts / webinars. It should therefore serve as a useful, searchable database for our clients to review created material. All of the content has been categorised by sector themes (see drop down menu on the left hand side of the blog home page), tagged with keywords and is searchable. If you have an interest in this area, we encourage you to click on the link to the blog and take a look.

To keep up to date, you can subscribe to the blog by entering your e-mail address on the site in order to receive updates by e-mail as soon as new material is posted.

 

Herbert Smith Freehills is excited to announce the launch of its new publication – Contract Disputes in Hong Kong: A Practical Guide 2019

 

Click here for a sneak preview

With the launch of this new Guide, our market-leading litigation team has wrapped up a three-year project during which it produced eight issues of the Contract Disputes Practical Guide series for Hong Kong, an initiative that has been hugely popular with clients in the territory. We have also published similar individual issues in Chinese, which have gained impressive traction in both Hong Kong and Mainland China.

The Guide (i) provides drafting tips for in-house legal counsel who negotiate or manage commercial contracts that apply Hong Kong law; (ii) highlights legal pitfalls to avoid disputes before they arise; and (iii) aims to act as the first point of reference if issues do arise.

It has eight chapters featuring the following topics: formation of and interpretation of contracts, pre-contractual statements (misrepresentation and other possible causes of action such as negligent statements), good faith and endeavours obligations, termination of contract, remedies for breach of contract, liquidated damages, limitation and exclusion clauses, and dispute resolution and governing law clauses.

The Guide is practical and user-friendly and we hope it will be of use not only to in-house legal counsel but also to those on the commercial side of an organisation. With so many regional contracts executed under Hong Kong law, we hope that the Guide will be equally popular with clients from other parts of Asia as well as Hong Kong.

If you would like a copy of the Guide or more information, you may reach out to:

 

Gareth Thomas
Gareth Thomas
Partner, Hong Kong
+852 2101 4025
Dominic Geiser
Dominic Geiser
Partner, Hong Kong
+852 2101 4629
Priya Aswani
Priya Aswani
Professional Support Lawyer
+65 6868 8077

 

HONG KONG’S FUNDING LAW NOW IN FORCE

Hong Kong’s long-awaited legislation permitting third parties to fund arbitrations and related proceedings takes effect today. As heralded in our earlier posts, this is a widely welcomed development in one of the world’s leading arbitral seats, and is expected to generate considerable activity.

If you have questions on the new law, funders’ Code of Practice, or third party funding generally, please contact Justin D’Agostino, Simon Chapman, Dominic Geiser, Briana Young, or your usual Herbert Smith Freehills contact.

 

Justin D'Agostino
Justin D'Agostino
Global Head - Dispute Resolution; Managing Partner - Asia
+852 2101 4010
Simon Chapman
Simon Chapman
Partner, Hong Kong
+852 2101 4217
Dominic Geiser
Dominic Geiser
Partner, Hong Kong
+852 2101 4629
Briana Young
Briana Young
Professional Support Consultant, Hong Kong
+852 2101 4214

 

Singapore: Herbert Smith Freehills advises on third-party funded arbitrations and contributes to leading publication on litigation funding

Singapore introduced legislation in 2017 to allow third-party funding in international arbitration and associated proceedings including enforcement and mediation. Our Singapore team is already representing clients in two significant Singapore-seated arbitrations in which the claimants are third-party funded. It is understood that these are amongst the first funded arbitrations in Singapore.

In the light of these exciting developments, Herbert Smith Freehills’ Alastair Henderson, Daniel Waldek and Emmanuel Chua discuss the legal landscape and trends in the Singapore chapter to the 2019 edition of Getting the Deal Through: Litigation Funding.

The Guide provides expert local insight into third-party funding and related laws, and answers key questions in 21 jurisdictions. Topics covered include: (i) whether third-party funding is permitted; (ii) funding options; (iii) fees and interests funders may charge; (iv) conditional or contingency fee agreements: (v) applicable legislative/regulatory provisions; (vi) termination of funding; (vii) after-the-event insurance; (viii) costs of litigation, adverse costs and security for costs; and (ix) disclosure and privilege. The Guide will be of interest to third party funders, lawyers and end-users of dispute resolution processes alike, to understand and navigate the latest developments in this area of the law.

Click here to view this publication.

Should you have any questions about third party funding in Singapore, please contact Alastair Henderson, Daniel Waldek or Emmanuel Chua.

 

Alastair Henderson
Alastair Henderson
Managing Partner, Southeast Asia
+65 68688058
Daniel Waldek
Daniel Waldek
Senior Associate
+65 68688068
Emmanuel Chua
Emmanuel Chua
Senior Associate
+65 68688027