Enforcement of agreements to mediate in the Singapore District Courts

Singapore CBD from the harbour

The enforcement of dispute resolution clauses in commercial disputes is usually a matter of procedural importance. Giving effect to dispute resolution clauses (e.g., a choice of court agreement, an arbitration agreement, or an agreement to mediate) upholds parties’ expectations when they conclude contracts, ensuring that the compromises made during contractual negotiation, which are clearly reflected in the terms of the contract, are upheld. Unfortunately, the enforcement of agreements to mediate is a rarely-addressed matter in the Singapore courts. In spite of the advent of the 2017 Mediation Act (No. 1 of 2017), under which section 8 of the Act specifically provides the Singapore courts with powers to enforce agreements to mediate, the provision has so far been seldomly invoked.

It is useful to study how courts interpret agreements to mediate, as the methodology may be applied in like cases.

This article brings to our attention of an unreported judgment from the Singapore District Court, where the outcome of the case could have turned on the enforcement of an agreement to mediate concluded between the parties. This judgment is worthy of deeper analysis because it may be applied in future cases where agreements to mediate are similarly brought to the Singapore court for enforcement. It is useful to study how courts interpret agreements to mediate, as the methodology may be applied in like cases. Yet this article will serve as a reasoned critique to the approach adopted by the Singapore District Court, in Zhongguo Remittance Pte Ltd v Samlit Moneychanger Pte Ltd and others [2020] SGDC 73 (“Zhongguo Remittance”).

The common law on enforcing agreements to mediate

As a general rule of thumb, the common law has developed to accommodate the enforcement of adequately-drafted agreements to mediate favourably. Recently, this sentiment has been evidently expressed by the Technology and Construction Court of the Queen’s Bench Division in England in Ohpen Operations UK Ltd v Invesco Fund Managers Ltd [2019] EWHC 2246 (TCC). Justice O’Farrell ruled (at para 32) that the English court “has a discretion to stay proceedings commenced in breach of an enforceable dispute resolution agreement [(including agreements to mediate)]. In exercising its discretion, the court will have regard to the public policy interest in upholding the Parties’ commercial agreement and furthering the overriding objective in assisting the Parties to resolve their disputes.”

Furthermore, the court opined (at para 58):

“There is a clear and strong policy in favour of enforcing alternative dispute resolution provisions and in encouraging parties to attempt to resolve disputes prior to litigation. Where a contract contains valid machinery for resolving potential disputes between the parties, it will usually be necessary for the parties to follow that machinery, and the court will not permit an action to be brought in breach of such agreement.”

Enforceability of agreements to mediate in the Singapore District Court

The case of Zhongguo Remittance from the Singapore District Court provides an interesting contrast to the trend in the common law which favours such enforcement. The parties were in dispute over an unlawful means conspiracy and harassment claim. On 3 November 2017, the Plaintiff sought a judicial remedy against the 1st to 3rd Defendants from the Singapore District Court. The parties subsequently entered into a Consent Judgment on 3 July 2018. In it, the 1st to 3rd Defendants agreed to cease their offensive actions against the Plaintiff. Furthermore, all parties had agreed to the following dispute resolution clause, which contains an agreement to mediate, in clause 8 of the Consent Judgment, reproduced below:

“8. […] Any future dispute arising between the parties, including but not limited to disputes arising out of or in connection with this Settlement Agreement, such as any question regarding its existence, validity or termination, s