On 12 September 2020, the United Nations (UN) Convention on International Settlement Agreements Resulting from Mediation, also now known as the Singapore Convention on Mediation entered into force (the “Singapore Convention”). It has been described as a potential ‘game-changer’ in terms of the development of international commercial mediation and arrives with the expectation that it will become mediation’s equivalent of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”). The Singapore Convention is designed to achieve a similar objective, that is, to facilitate and remove the barriers to the global enforcement of mediated settlement agreements. As a sign of how important cross-border dispute resolution and related enforcement mechanisms have become to attracting investment, it is notable that while the New York Convention was launched with just 24 state signatories in 1958, in contrast, 53 countries have so far signed the Singapore Convention (including China, the US, India, Malaysia, the Philippines and South Korea). Of these 6 have so far ratified it (Singapore, Saudi Arabia, Qatar, Fiji, Belarus and Ecuador) and others are expected to follow suit shortly.
This means that global businesses will now be in a position to enforce mediated settlement agreements in countries that have ratified the Singapore Convention by applying directly to the courts in those countries rather than having to commence breach of contract actions.
Therefore, in addition to the potentially significant advantages available through the use of mediation to resolve disputes, the more streamlined process of cross-border enforcement introduced by the Singapore Convention will also save substantial legal costs and time.
As with the New York Convention, the circumstances in which enforcement under the Singapore Convention may be refused are limited, including breaches of due process and public policy concerns. It is also anticipated that courts will impose a high threshold and not easily refuse enforcement.
Ultimately, while the success of the Singapore Convention might be thought to depend on the number of countries which eventually ratify it, in practice, it is expected that its very existence will contribute significantly to the continued growth and popularity of international commercial mediation – either as a stand-alone dispute resolution option, or as part of a tiered dispute resolution option in combination with arbitration.
