The UN Convention on International Settlement Agreements Resulting from Mediation was signed by 46 nations, including China, India and the United States on August 7, 2019. Within six months, a further six nations had signed. The Convention will improve the enforceability of international commercial settlement agreements reached through mediation, rather than, as now, treating such settlement agreements as ordinary contracts, exposed to jurisdictional and other vagaries of enforcing contracts across borders.
But the Convention has a value far beyond enforcement. This is the mediation field’s version of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Not only was the New York Convention the catalyst for the huge uptake of arbitration around the world, but it crucially stimulated worldwide respect for arbitration as an alternative to litigation. This motivated an increase in global trade and investment and created a new world legal order.
The Singapore Convention on Mediation can have a similar influence on the international appetite for mediation. Indeed “the primary goal of the Convention is to promote the use of mediation for the resolution of cross-border commercial disputes as mediation [which] is seen as not only a faster, less expensive form of dispute resolution but also as more likely to preserve commercial relationships”.[ii] It will emphasize the extraordinary value of mediation and underscore its credibility. The Convention is arguably the most significant happening in dispute resolution since the 1976 Pound Conference, progenitor of modern mediation. The Convention provides that it comes into force six months after the first three nations have ratified it. Those nations were Singapore, Fiji and Qatar, and the Convention’s entry into force date is established as September 12, 2020. Saudi Arabia has since ratified, and it now needs to be signed and ratified by all nations, and to come into full operation internationally as quickly as possible.
Background to the Singapore Convention on Mediation
There have been previous attempts to secure international enforcement of mediated settlement agreements. For example, the 2008 EU Mediation Directive[iii] addressed enforcement of mediated settlement agreements but required parties to deliberately opt into enforcement in other jurisdictions. Article 6.1 of the Directive reads: Member States shall ensure that it is possible for the parties, or for one of them with the explicit consent of the others, to request that the content of a written agreement resulting from mediation be made enforceable (emphasis added). While it is inspiring that the EU tried to address enforcement of cross-border mediated settlements 12 years ago, an opt-in approach is likely to result in less, rather than more, opportunity for enforcement.
An international Convention on the enforcement of mediated settlement agreements was initially proposed by the United States in June 2014 in the context of the United Nations Commission on International Trade Law (UNCITRAL). The mission was assigned to UNCITRAL’s Working Group II. To reinforce the proposal, an international survey was conducted on the use and perception of commercial mediation in international legal and business communities led by Professor Stacie I. Strong at the University of Missouri. Analysis of the results[iv] of the 221 responses indicated that participants were strongly in favour of a convention on both the enforcement of agreements to mediate or conciliate international commercial disputes, and the enforcement of settlement agreements arising out of international commercial mediation and conciliation. There was a similar vote in support of a mediation enforcement Convention during the Global Pound Conference Series 2016-17[v].
Working Group II began work in 2015. I was fortunate to be part of Singapore’s team to UNCITRAL’s Working Group II on Conciliation, which met between 2015-2018. The Working Group was chaired by Ms Natalie Morris-Sharma from the Singapore Ministry of Law. The Singapore team comprised officers from the Ministry and myself representing the private sector.
It was not an easy Working Group, considering there were representatives from 50 countries, with different legal systems and cultures. Naturally, each country had its own social, economic and political interests. It was thus with a great sense of achievement that we managed, in February 2018, to prepare the draft text for a Convention on the enforceability of international commercial mediated settlements, and a Model Law to the same effect.
In June 2018, 26 countries spoke in support of Singapore hosting the signing ceremony for the Convention. And on 20 December 2018, the UN General Assembly passed a Resolution to adopt it. The signing ceremony was unprecedented because 46 countries agreed to promote the cause of mediation. The countries that signed represented more than half of the world’s population. Many more countries have expressed their interest to sign, and the objective now is to secure more signatories and more ratifications.
The need for all nations to ratify the Singapore Convention on Mediation
Nations ratifying the Convention are required to enforce international commercial settlement agreements arrived at through mediation in accordance with their national rules of procedure and the conditions set out in the Convention. The Singapore Convention on Mediation provides for automatic enforcement of international mediated settlement agreements in countries ratifying it, unless the parties opt out. Other provisions of the Convention[vi] will not be recited here owing to space limitations. They are comprehensively explained with clear examples in The Singapore Convention on Mediation: A Commentary by Nadja Alexander and Shouyu Chong[vii].
If nations believe in mediation as a means to resolve disputes efficiently and effectively, there seems to be every incentive for them to sign and ratify the Singapore Convention immediately. Over 160 nations are signatories to the New York Arbitration Convention; global trade and investment will be boosted if all those nations now offer the same enforceability mechanism to international mediated settlement agreements.
The Singapore Convention on Mediation represents the dawn of a new era in dispute resolution on a global scale. We can all persuade our Governments to sign, ratify and implement the Convention.
George Lim SC[i]
[i] George Lim, Senior Counsel, is the current Chair of the Singapore International Mediation Centre. He was President of the Law Society of Singapore from 1998-99. George has mediated close to 500 disputes. In addition to his international law practice, he has trained hundreds of judges and lawyers in mediation, and assisted governments in mediation capacity building. George helped establish the Singapore Mediation Centre and the Fiji Mediation Centre and serves on the Board of the International Mediation Institute (IMI). In 2013, George was appointed co-Chair of a Working Group convened by the Chief Justice of Singapore and the Singapore Ministry of Law to make recommendations on developing Singapore as a global centre for commercial mediation. George was Singapore’s mediation consultant to UNCITRAL’S Working Group II on Conciliation, which resulted in the signing of the Singapore Convention on Mediation on 7 August 2019. He is the co-editor of Mediation in Singapore: A Practical Guide (2015, 2017). (http://www.mediatewith.me/)
[ii] Timothy Schnabel, leader of the US delegation to the UNCITRAL Working Group II meetings that curated the Singapore Convention on Mediation. See: The Singapore Convention on Mediation: A Framework for the Cross-Border Recognition and Enforcement of Mediated Settlements, Pepperdine Dispute Resolution Law Journal Vol 19.1 2019
[iii] For the text of the EU Mediation Directive 2008, click here.
[iv] For more on the Survey, click here.
[v] To see the GPC voting results, click here.
[vi] For the full text of the Singapore Mediation Convention, click here.
[vii] For the publisher’s link to the book, click here.
Originally published via Mediate.com on July 10 2020. Republished with permission.