“United Nations Convention on International Settlement Agreements Resulting from Mediation” (also known as the “Singapore Convention on Mediation”, the “Convention”) is an unprecedented international convention named after Singapore, the city state well-known for its prosperity and commercial efficiency. The Convention has been opened for signature since its signing ceremony on 7 August 2019, during which 46 countries including Singapore, China and the United States have put their pen to paper.
This article explains the nature and the functions of the Convention and some concepts related to the Convention.
Mediation under the Convention
Mediation is a non-adversarial method of dispute resolution with the help of a neutral third party.
Dispute methods of dispute resolutions may be put into two broad categories:
Article 2 of the Convention stipulates that “Mediation” means a process, irrespective of the expression used or the basis upon which the process is carried out, whereby parties attempt to reach an amicable settlement of their dispute with the assistance of a third person or persons (“the mediator”). Occasionally disputants may be represented by Mediation advocate to attend and facilitate in the mediation.
In practice, a typical mediation has the following three features:
The Convention requires the mediator to be neutral, independent and impartial throughout the mediation. The mediator needs to not only be substantially neutral, independent and impartial, but also eliminate any reasonable doubt on appearance by the disputants as to his or her neutrality, independence and impartiality. It is also noteworthy that Article 2 of the Convention provides that the mediator has no authority to impose a solution upon the parties to the dispute.
The convention does not stipulate any particular form of which a mediation should be conducted. However in practice, a typical mediation would follow the structure as shown below:
Functions of the Convention
By signing the Convention, signatories agree to pass laws and regulations to enforce a settlement agreement in accordance with its rules of procedure and under the conditions laid down in this Convention. This means that settlement agreements made after properly conducted mediations in accordance with the Convention (if applicable) may be enforced in those jurisdictions.
For the avoidance of doubt, however, not all settlements agreements via mediation will definitely be enforced. A signatory state may refuse to enforce a settlement agreement in accordance with Article 5 of the Conventions. The main grounds of refusal include:
Applicability of the Convention
One should also take note that the Convention only applies to Commercial disputes. The Convention expressly excludes disputes involving transactions for personal or family purposes (that is, consumer disputes). Matrimonial, Probate and Labour disputes are also excluded.
The Convention only applies to International disputes. To be qualified as an international dispute, the following condition(s) need to be satisfied at the time when parties signed the settlement agreement:
The Convention only applies to a settlement agreement in Writing. The requirement that a settlement agreement be in writing can be met by an electronic record if the content therein is accessible so as to be useable for subsequent reference.
The Convention is not applicable under the following circumstances:
The following table summarises the possible methods of enforcement of a concluded settlement agreement:
Since the Convention will come into force 6 months after more than three signatories ratify or approves the Convention, we all now await for it to become in force in the early 2020. The Convention provides an alternative means to enforce a settlement agreement that is concluded via mediation, promoting mediation as a means to resolve cross-border commercial disputes amicably in this globalised world. Commercial parties should seek legal advice on how to protect their interests under the Convention.