Much has already been written on the upcoming United Nations Convention on International Settlement Agreements Resulting from Mediation, also known as the Singapore Convention. Deborah Masucci and M. Salman Ravala have claimed that adoption of the Convention “signals the most credible acknowledgment of mediation as a meaningful tool to resolve cross-border commercial disputes”. Dr. Peretz Segal has highlighted the importance of party autonomy in mediation through the Convention.
In this piece, George Lim and Karl Mackie discuss the Singapore Convention. How will it benefit businesses? What will countries gain from signing the Convention? What will signing the Convention entail?
A successful mediation results in a settlement agreement. Currently, however, a party may face difficulties in ensuring that the other party complies with the terms of the settlement agreement, which is only binding contractually and therefore not directly enforceable in the courts. This has posed an obstacle to the international growth of mediation. Thus far, there has been no international mechanism for the efficient enforcement of such settlement agreements for international commercial parties.
The Convention will be the first multilateral agreement to facilitate the enforcement of mediated settlement agreements across borders. It is the result of work undertaken by a Working Group of UNCITRAL and is expected to be adopted by the 73rd United Nations General Assembly in December 2018. The Convention will be open for signature in Singapore in August 2019.
Benefits of Mediation
By addressing an oft-cited weakness of mediation, the Convention will promote the use and acceptability of mediation as an option for businesses to resolve their disputes. The advantages for businesses which choose to use mediation to resolve these disputes include:
- Cost and time savings. Mediations can be organised within weeks, and concluded in a day or two, and therefore incur less costs than court proceedings or arbitrations. Around 70% of disputes mediated globally are settled within one day.
- Control over outcome. Parties are responsible for, and jointly determine the terms of the settlement, with the mediator facilitating the resolution. This is unlike litigation or arbitration, where the outcome is decided by the judge(s) or arbitrator(s).
- Preservation of relationship. Mediation is non-confrontational and facilitated by the mediator, whereas litigation and arbitration are more adversarial forms of dispute resolution. Mediation may be more suitable where parties wish to preserve and avoid affecting long-term commercial relationships.
- Confidentiality. Mediation is a confidential process where what was discussed or agreed in private would not be disclosed to a third party without the consent of the parties.