27 Mar 2020

On 12 March 2020, Qatar ratified the Singapore Convention on Mediation – thereby starting the 6-month clock before the treaty comes into force.

This read considers the potential impact of this development on mediation in the international dispute resolution arena, and how this ties in with Singapore’s role as an international dispute resolution centre.

  1. Mediation refers to a party-centric approach to dispute resolution where a neutral third-party (i.e. a mediator) is engaged not to determine the party at fault, but to instead facilitate parties in negotiating a solution. In addition to its cost-effectiveness, mediation grants parties a substantive degree of control over the outcome of a dispute since settlement terms (if any) are crafted by the parties themselves. More importantly, mediation avoids potential instances of long-drawn litigation and allows for the preservation of harmonious commercial relationships that are often developed over extended periods of time.
  2. Despite its commercial attractiveness, businesses remain skeptical about the effectiveness of mediation in dispute resolution since ensuring compliance with a settlement agreement[1] is often a challenging task. Such agreements may be contractually-binding, but they are not directly enforceable by an innocent party against a defaulting party in the courts. Whilst this issue has been addressed in Singapore by the Mediation Act 2017 (the “Mediation Act”),[2] it continues to exist when settlement agreements are entered into across state lines.
  3. On 7 August 2019, a treaty governing the cross-border enforceability of settlement agreements resulting from international commercial mediation was opened for signature in Singapore. Known as the United Nations Convention on International Settlement Agreements Resulting from Mediation, or the Singapore Convention on Mediation (the “Convention”), the treaty has been signed by 52 states as of 28 January 2020.[3] The Convention will come into force on 12 September 2020,[4] following its ratification by Singapore; Fiji; and Qatar.[5]
  4. Article 3 of the Convention provides that signatories may, in accordance with their respective domestic procedures:
  • enforce an international settlement agreement;[6] or
  • where a dispute arises in respect of a matter claimed to have been resolved by an international settlement agreement, invoke such agreement.[7]
  1. On 4 February 2020, the Singapore Convention on Mediation Bill (the “Bill”) was passed to implement the articles of the Convention in Singapore. The procedure for enforcing or invoking an international settlement agreement in Singapore is set out in Section 4 of the Bill which provides that a party may apply to record the same as a court order, subject to the requirements[8] being met and there being no ground for refusal.[9] In addition to implementing the articles of the Convention in Singapore, the Bill also expands the scope of the Mediation Act to include “international” settlement agreements.[10]
  2. Whilst the Bill and the Mediation Act may appear to share key similarities, a closer reading of the Bill will reveal its less restrictive nature. Unlike the Mediation Act, the Bill does not require an applicant to obtain the consent of any other contracting party in an application under Section 4 and imposes no limitation period in respect of such applications.
  3. By establishing a central framework for the enforcement of international settlement agreements, the certainty that the Convention provides to businesses circumvents the enforceability issue identified earlier in [2]. Further, this central framework could allow businesses to avoid the costlier options in litigation and arbitration that are often accompanied by unfamiliarity in contentious foreign proceedings.
  4. Described by Singapore’s Prime Minister Lee Hsien Loong as the “missing third piece[11] in the international dispute resolution framework that currently includes the Hague Convention on Choice of Court Agreements and the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards, the Convention thereby places mediation in the same league as litigation and arbitration in the international dispute resolution arena. Considering its cost-effective and relationship-preserving elements, mediation may in fact become the dispute resolution mechanism of choice following the Convention. Whilst enforceability issues may continue to exist amongst non-signatories, this is unlikely to be a long-term concern given the current global support for the Convention.[12]
  5. Singapore has long recognized the importance of mediation in dispute resolution against the backdrop of the rise in regional trade and investment,[13] and has developed an impressive ecosystem for international commercial mediation in order to solidify its position as a leading international dispute resolution centre. Singapore is home to Maxwell Chambers, the world’s first integrated dispute resolution complex that houses the Singapore International Mediation Centre. Singapore has also seen the introduction of several pro-mediation initiatives such as the creation of a mediators’ panel for disputes related to China’s Belt and Road Initiative,[14] lower fees for copyright dispute mediation[15] and an online service allowing the public to engage professional mediators.[16] Transposing the Convention into domestic legislation within a short time span of 6 months is perhaps Singapore’s latest move in further improving its mediation capabilities, and a demonstration of its commitment to best practices to the rest of the world. Considering these factors amidst the rise in cross-border commercial transactions in the region, the city-state is particularly well-equipped to benefit from any increase in demand for international commercial mediation following the Convention.

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[1]           For the purposes of this read, a “settlement agreement” shall refer to a settlement agreement resulting from the mediation of a dispute for which there have been no court proceedings commenced.

[2]           Mediation Act 2017, Section 12: A party to a settlement agreement may, with the consent of all other contracting parties, apply to record the same as a court order within 8 weeks of contracting.

[3]           United Nations Commission on International Trade Law, ‘Status: United Nations Convention on International Settlement Agreements Resulting from Mediation’.

[4]           United Nations Convention on International Settlement Agreements Resulting from Mediation, Article 14: In order to come into force, a 6-month period must elapse following the ratification of the Convention by 3 signatories.

[5]           See Footnote 3: Singapore and Fiji both ratified the Convention on 25 February 2020 and more recently, Qatar followed suit on 12 March 2020.

[6]           See Footnote 4, Article 3(1).

[7]           ibid, Article 3(2).

[8]           Singapore Convention on Mediation Bill, Section 6.

[9]           ibid, Section 7.

[10]          ibid, Section 12.

[11]          Prime Minister’s Office (Singapore), ‘Speech by PM Lee Hsien Loong at Singapore Convention on Mediation Signing Ceremony & Conference’ at [5].

[12]          See Footnote 3: During its opening on 7 August 2019, the Singapore Convention on Mediation received 46 signatures – A record number for any United Nations Trade Convention.

[13]          International Commercial Mediation Working Group (Singapore), ‘Executive Summary: Recommendation of the Working Group to Develop Singapore Into a Centre for International Commercial Mediation’ at [5].

[14]          The Straits Times, ‘Singapore, China to set up mediators’ panel for Belt and Road projects’.

[15]          The Straits Times, ‘Lower rates for copyright dispute mediation’.

[16]          The Straits Times, ‘New online service to help engage mediation services’.