Singapore Convention to strengthen mediation as means to resolve international disputes

On 20 December 2018, the UN General Assembly adopted the UN Convention on International Settlement Agreements Resulting from Mediation, known as the Singapore Convention. The Convention is expected to be signed in August 2019 meaning that it will enter into force in early 2020 (provided that at least three states will ratify the Convention).

Although mediation has risen in popularity as a means to resolve cross-border commercial disputes, a major drawback of this method is the inability to effectively enforce mediated settlement agreements internationally. Currently, mediated settlement agreements outside of court proceedings or arbitration are enforced in the same way as any other contract – requiring the initiation of full court proceedings and thus incurring significant delays and costs compared to the enforcement of a judgment or an arbitral award. The Singapore Convention seeks to change this by facilitating the enforcement of mediated settlement agreements, and essentially to achieve what the New York Convention of 1958 has done for arbitration.

The Convention aims at granting mediated settlement agreements a status similar to arbitral awards. Each signatory of the Convention will be obliged to enforce mediated settlement agreements in accordance with its own rules of procedure. A competent authority may only refuse enforcement of a mediated settlement agreement based on one of the few grounds listed in article 5 of the Convention. For instance, it may refuse to grant enforcement upon request if a party was under some form of incapacity, the settlement agreement is technically ineffective, or if the agreement is not binding or final. Also, issues of public policy may be considered.

The enforcement regime of the Convention will, however, only apply to settlement agreements that have arisen from mediation and relate to an international case. Furthermore, certain areas have been excluded from the Convention's scope, such as inheritance, family and employment law. Also, the Convention does not apply to settlement agreements approved by a court or an arbitral tribunal.

The enforcement regime established by the Convention is expected to increase confidence in mediation among commercial parties and boost its use in international disputes. But the reach and impact of the Convention will also depend on the number of states that ratify it, and this remains to be seen.

For more information on this Convention, please contact Nino Sievi.