Singapore Convention on Mediation signed to give mediated settlements a little more bite

Mediation is very seldom if ever chosen (when negotiating a contract at the outset) as a means of resolving contractual disputes in the UK, principally because a mediated settlement is not directly enforceable in the Courts.  A new treaty has this month been signed to give mediated settlements a little more bite.

New treaty – Singapore Convention

As of 7 August 2019, 46 countries, including the US and China, signed a new international treaty on mediation named after Singapore – the “Singapore Convention on Mediation” (the “Singapore Convention”).

This signing by 46 countries came after the United Nations General Assembly, at its 73rd session in New York, passed a resolution on 20 December 2018 to adopt the United Nations Convention on International Settlement Agreements Resulting from Mediation, and to name it after Singapore.

UK and EU – in our out?

Both the EU and the UK have yet to sign the treaty.

What happens if the UK signs?

Signing up to the Singapore Convention is significant because this treaty will enable enforcement of cross-border commercial mediated settlement agreements among the signatory countries.

The problem with enforcing mediated settlements

Whilst mediation is recognised as a means to resolve cross-border commercial disputes, an often-cited obstacle is that if a party reneges on his obligations in a mediated settlement agreement, unlike a court judgment or an arbitral award, the mediated settlement agreement is only binding contractually but not directly enforceable in the Courts of the jurisdiction of the breaching party. The party alleging a breach will therefore have to obtain a judgment or an arbitral award before it can seek enforcement.

How solved by the Singapore convention

Where it applies, the Singapore Convention provides an effective means to enforce cross-border commercial mediated settlement agreements.

Under Article 3 of the Singapore Convention, it provides that a settlement agreement may be enforced by the Courts of the State that is party to the Convention.

Procedure

Under article 4(1) of the Singapore Convention, the procedure for a party seeking enforcement of a commercial mediated settlement agreement is straightforward. That party must supply to the competent authority:

• The settlement agreement signed by the parties.
• Evidence that the settlement agreement resulted from mediation – such evidence can include the mediator’s signature on the settlement agreement, a document signed by the mediator indicating that the mediation was carried out or an attestation by the institution that administered the mediation.

Under article 4(2)(5) of the Singapore Convention, when considering such request for relief, “the competent authority shall act expeditiously”.

Under article 5 of the Singapore Convention, there are limited grounds for a competent authority to refuse to grant relief.

View from Singapore

Singapore’s Home Affairs and Law Minister K Shanmugam expects Singapore and other countries will be “fairly quick” to ratify the Singapore Convention (countries that have signed will now have to go through a domestic process to ratify the convention).

Looking forward to UK ratification?

It is expected  that more countries will sign up to and ratify the Singapore Convention in time to come. There should be little pushback from countries against signing the Singapore Convention for reasons of political inexpediency.

It does come as a surprise that the EU and UK, which are jurisdictions with a robust rule of law to have not signed up at this time. However, we understand that for the EU, the reason for non-signing at this time is logistical where the European Commission has yet to decide whether it has competence or would require individual states to sign.

For the UK, 2019 has been and will continue to be a crucial year where the meaning of its sovereignty may be redefined for its future generations, and presumably this Singapore Convention is not its urgent and immediate priorities. It is nevertheless expected that the UK will sign and ratify the Singapore Convention in the future.

The effect of the Singapore Convention is constructive and it will only promote confidence in doing business between companies registered in different jurisdictions and promote growth of international commerce.

For the full text of the Singapore Convention, it can be found here:

https://uncitral.un.org/sites/uncitral.un.org/files/singapore_convention_eng.pdf

This piece was prepared and researched by Paul Wong.

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