What is the Singapore Mediation Convention – When does it apply?
On 7 August 2019, the Singapore Mediation Convention was signed by 46 States at an official signing ceremony in Singapore. This marks the dawn of a new enforcement framework for international commercial settlement agreements resulting from a formal mediation (i.e Mediated International Settlement Agreement). The Singapore Mediation Convention is meant to work in a similar fashion to the New York Convention, which you can find our article on the New York Convention here (insert link).
Why does this matter to international commercial parties?
Before this, if two international parties enter into a settlement agreement following a mediation and one party breaches the terms, the only way the other party can obtain a remedy is through commencing court proceedings or arbitration proceedings in the jurisdiction specified in the settlement agreement. Many a time, the enforcement processes for cross-border settlement agreements are extremely difficult, lengthy and costly, adding unnecessary stress, costs and delays for the parties to reach a final resolution.
With the advent of Singapore Mediation Convention, it is now possible for a non-breaching party to directly enforce the terms of a Mediated International Settlement Agreement in the courts governing the breaching party. The courts in the Contracting State would be bound to give effect to the terms of the settlement agreement by way of a judgment, provided that all the criteria are fulfilled.
Criteria for the Singapore Mediation Convention to apply:
The Singapore Mediation Convention will only apply where the settlement agreement:
- results from a mediation;
- is in writing;
- is an agreement between two or more parties who have their place of business in different States; and
- the place of business of each of the parties is in a Contracting State that has acceded to or ratified the Convention.
What is the process of enforcement?
Parties seeking to enforce an International Mediated Settlement Agreement will need to provide to the court of a Contracting State with:
- a signed Mediated International Settlement Agreement; and
- evidence that such an agreement resulted from mediation (i.e attestation by the mediation institution, mediator’s signature on the settlement agreement).
The courts of the Contracting State will then enforce the terms of the agreement in accordance the conditions set out in the Convention and with its domestic procedural rules. The courts will be able to give effect to both pecuniary (i.e monetary) and non-pecuniary remedies.
Who are the current signatories to the Singapore Mediation Convention?
- By far, 46 States have signed the Singapore Mediation Convention, including the US, China, Singapore, Malaysia, India, Philippines, Saudi Arabia, Republic of Korea and others. For the full list of signatories, please see the link here. Note that the list is subject to changes as the Convention is open for signature for other countries who may wish to join in the future.
- Note that the UK, the European Union and Australia have not yet signed the Convention, but may do so in the future.
- The Convention will only enter into force 6 months after at least 3 States have ratified it. The Contracting countries will be able to bring the Singapore Mediation Convention into effect by adopting the Model Law on International Commercial Mediation.
The Singapore Mediation Convention will potentially have a significant impact in changing the conduct of international dispute resolution across Asia and across the globe. If you are involved in cross-border projects or transactions with business entities in any of the signatories countries mentioned above, you may want to consider mediation as a less costly and more efficient alternative dispute resolution method in the future!