The Singapore Convention on Mediation: Changing Dispute Resolution – by Sanjivan

The Singapore Convention on Mediation: Changing Dispute Resolution

 

The Author is Sanjivan Chakraborty, a B.A.LL.B (Hons.) student at National Law University and Judicial Academy, Assam.

 

Introduction:

 

On August 7, 2019, the United Nations Convention on International Settlement Agreements Resulting from Mediation opened up for signature in Singapore. The Convention, commonly known as the Singapore Convention on Mediation, was signed by 46 countries, including the United States of America, China, India, etc.

 

The Conventions are aimed at increasing the enforceability of settlement agreements that come out of mediation.

 

It is believed by many that the Singapore Convention on mediation will be for mediation equivalent to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Award – commonly known as the New York Convention – for arbitration.

 

The Singapore Convention could mark as a pivotal step in the growth of mediation as a preferred mode of dispute resolution.

 

Key aspects of the Singapore Convention on Mediation:

 

Much like its counterpart, the New York Convention, the Singapore Convention is a relatively short document and resembles the New York Convention.

 

The key aspects include:

 

  • Inclusions and Exclusions:

 

The type of mediation to which the Singapore Convention applies is referred to in Article 1 of the Convention. The Singapore Conventions applicability is limited to that of commercial disputes, which are of an international nature. It achieves similar effects to that of the New York Convention, which is applicable only in case of recognition and enforcement of arbitral awards, which are foreign and non-domestic in nature.

 

Types of a settlement agreement which are excluded from the ambit of the Convention:

  • Those arising from transactions engaged by one of the parties for personal,
  • Family or household purposes;
  • Relating to family, inheritance or employment law;
  • Which have been approved by a court or concluded in the course of proceedings before a court and are enforceable as a judgment in a court;
  • Recorded and enforceable as an arbitral award.

 

  • Defining mediation

 

One of the key features of the Singapore Convention is its broad definition of the term mediation. Article 2(3) of the Convention defines mediation as an attempt by the parties “to reach an amicable settlement of their dispute with the assistance of a third person or persons (‘the mediator’) lacking the authority to impose a solution upon the parties”.

 

The Singapore Convention will apply to a settlement agreement as long as it falls within the ambit of this definition, regardless of whether the process of settlement is called “mediation” or not.

 

Further, the Convention puts it straight that there is no requirement that the mediation is administered by a mediation institution or it is conducted by a mediator who is accredited.

 

The definition of the term mediation has been broadened intentionally in the Convention. It is done so aiming to increase the attractiveness of the Singapore Convention. Such a broad definition will allow the Convention to be much more flexible, which is one of the most attractive features of mediation.

 

  • Formalities:

 

The Convention provides certain formalities that are to be fulfilled before any relief can be granted based on a settlement agreement. Under Article 4(1) of the Convention, it is required that (a) the settlement agreement is signed by the parties; and (b) there needs to be evidence that the settlement agreement is a result of a mediation.

 

In addition to this, the Convention also provides a range of options to indicate that the settlement agreement is a result of mediation and has the signature of the mediator or a statement from the mediation institution. This is done so to improve flexibility.

 

  • Grounds for refusal:

 

Article 5 of the Convention provides for grounds for refusing relief from a mediation settlement agreement. The grounds provided for under Article 5 of the Convention are exhaustive.

 

A large number of the grounds listed under Article 5 of the Singapore Convention have a resemblance to those in the New York Convention, some are:

  • A party to the settlement agreement was under incapacity (Article 5 (1)(a));
  • Granting relief would be contrary to public policy (Article 5 (2)(a));
  • The subject matter of the dispute is not capable of settlement by mediation (Article 5 (2)(b)).

 

It also includes grounds of refusal in relief which are more mediation specific, such as:

  • The settlement agreement is null and void, inoperative or incapable of being performed under the law to which it is subject (Article 5 (1)(b)(i));
  • The settlement agreement is not binding or is not final according to its terms (Article 5 (2)(b)(ii)) (which is to be judged by looking at the settlement agreement on its face);
  • The settlement agreement is not clear or comprehensible (Article 5 (1)(c)(ii)).

 

The rest is focused on the conduct of the mediator, like:

  • Where there is a serious breach by the mediator of standards applicable to the mediator or the mediation (Article 5 (1)(e));
  • Failure by the mediator to disclose circumstances relevant to the mediators’ impartiality or independence (Article 5 (1)(f)).

 

  • Parties allowed to expressly opt-out:

 

Under Article 5(1)(d), the Singapore Convention provides that reliefs may not be granted in cases where the relief is contrary to the terms of the settlement agreement.

 

This is one of the most significant provisions of the Convention, as it allows parties to expressly opt-out.

 

  • Reservation by Parties Signatory to the Convention:

 

The final distinctive feature of the Singapore Convention is the ability of Signatory States to make a reservation under Article 8 that the Convention will apply only to the extent that the parties to the settlement agreement have agreed to apply it.

 

In other words, where a Signatory State expresses such a reservation, parties to a settlement involving a party belonging to that State or assets in that State would need to “opt-in” to the Singapore Convention.

 

Where is it leading?

 

This Convention will make settlement agreements arising out of mediations easier to enforce and means that if a party to a mediated settlement has assets in a convention country, then the other party may be able to enforce the settlement agreement in an expedited manner under the Convention. It is important to keep a record of which countries have signed up, and any reservations included to determine whether the Convention will affect you. It will also be important to consider whether a specific opt-in or express opt-out is desirable. If it is intended that the Convention applies, parties will want to be especially careful that settlement terms are clearly drafted (which is, of course, always sensible).

 

Like the New York Convention, the Singapore Convention requires implementation in domestic legislation. Such laws may, of course, differ between jurisdictions. Significantly, the Working Group recognized that difficulties might arise due to their failure to obtain consensus on certain provisions, and it remains to be seen whether differences in domestic legislation prove to be problematic.

 

Endnotes:

  1. The Singapore Convention on Mediation, Ashurst (7th August, 2019), https://www.ashurst.com/en/news-and-insights/legal-updates/the-singapore-convention-on-mediation/

 

 

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