The Singapore Convention On Mediation

The United Nations Convention on International Settlement Agreements Resulting from Mediation – also known as the Singapore Convention on Mediation – was open for signature in Singapore on 7 August 2019. 46 countries, including the United States, China and Singapore have signed the Convention on the first day.¹ The Convention focuses on increasing the enforceability of settlement agreements that arise out of mediation. Touted as mediation's equivalent of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), many commentators herald the Singapore Convention as marking a pivotal moment for the growth of mediation as a method of dispute resolution. In this briefing, Rob Palmer, Georgia Quick, Cathryn Neo and Ed Davies consider some of the key features of the Singapore Convention and its potential impact for commercial parties.

Mediation and support for the Convention

The concept of mediation is not new, certainly in respect of domestic disputes. Broadly, mediation is a process whereby parties try to settle a dispute using the assistance of a neutral third person who acts as the mediator. The mediator does not have any authority to impose a decision on the parties and serves only to help them come to a mutually-acceptable resolution. However the usage of mediation in the international arena has not been as significant as might be expected.

In a 2014 survey conducted by the International Mediation Institute, the results showed that 93 per cent of the respondents would be more likely to mediate a dispute with a party from another country if that country had ratified a convention on the enforcement of mediated settlement agreements.²

The actual rate of non-compliance with mediated settlement agreements is in reality already low³  as parties are unlikely to refuse to act on a settlement agreement which they themselves have taken the time and effort to negotiate. Nonetheless, if there is a perceived (rather than actual) inability to efficiently enforce a mediated settlement agreement, the Singapore Convention will serve as an important step towards encouraging cross-border mediation providing parties with the certainty of a framework for enforcement and lending legitimacy to the process. The promotion and education associated with the introduction of the Singapore Convention will itself also bring much greater awareness to the process and no doubt an increased impetus to mediation associations and focus on the processes.

Key features of the Singapore Convention

Like the New York Convention, the Singapore Convention is a relatively short document and in fact bears much resemblance to its arbitration counterpart. Key features include:

1. Inclusions/Exclusions:

Article 1 sets out the types of mediation to which the Singapore Convention applies. Importantly, the application of the Singapore Convention is limited to commercial disputes which are international (which achieves a similar effect as the New York Convention which only deals with the recognition and enforcement of foreign and non-domestic arbitral awards).

Excluded are settlement agreements:

• 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; and
• recorded and enforceable as an arbitral award.

2. Definition of mediation:

Article 2(3) provides a broad definition of mediation as an attempt by parties "to reach 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". As long as the settlement falls within this definition, the Singapore Convention applies regardless of whether the process of settlement is called a "mediation". Equally there is no requirement that the mediation be administered by a mediation institution or conducted by an accredited mediator. This provision is intentionally broad and aims to increase the attractiveness of the Singapore Convention by not being overly prescriptive and maintaining the flexibility that is one of the attractive features of mediation.⁴

3. Formalities:

Article 4(1) sets out certain formalities which must be fulfilled before relief can be granted in reliance on a settlement agreement. The requirements are: (a) the settlement agreement must be signed by the parties; and (b) there must be evidence that the settlement agreement resulted from mediation.

A range of options are provided for to evince that the settlement agreement resulted from mediation including a signature by the mediator or a statement by the institution, given the need for flexibility.

4. Grounds for refusing relief:

The grounds for refusing relief from a mediated settlement agreement as listed in Article 5 are exhaustive. A number of them broadly resemble those in the New York Convention, including where:

• 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)); and

• the subject matter of dispute is not capable of settlement by mediation (Article 5 (2)(b)).

Other grounds for refusing relief are more specific to the mediation context, including: 

• 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); and
• the settlement agreement is not clear or comprehensible (Article 5 (1)(c)(ii)).

Others focus on the conduct of the mediator;

• 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)).

The manner in which these procedural grounds are applied will be of considerable interest, given the absence of any universally accepted process and the unique procedures often associated with mediation (such as a mediator in many cases holding private discussions with each of the parties). To ensure these grounds are not too widely engaged a causal connection between the conduct or non-disclosure and entry into the settlement was added which will provide a relatively high bar.

The Working Group expressed an intention to reduce the available defences to a minimum so as not to overly complicate the Convention with many grounds of review which would impede on the efficiency of the mediation process.⁵

5. Parties may expressly opt-out:

Article 5 (1)(d) expressly provides that relief may not be granted where it is contrary to the terms of the settlement agreement. Significantly this allows parties (who are aware of the Singapore Convention) to expressly opt-out.

6. Reservations by Signatory Parties:

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.⁶ 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.

Whether or not an express opt-in is required will depend on where enforcement is sought. As a result, we may well see the development of a standard practice amongst mediators of recommending to parties that all settlement agreements should include an express opt-in to the Singapore Convention.

Where to now?

The Singapore Convention will come into force six months after three countries have ratified, accepted, approved or acceded to the Convention.⁷ This is likely to be achieved, given that 46 countries signed on the first day it opened for signatures.⁸ The corresponding UNCITRAL Model Law on International Commercial Mediation and International Settlement Agreements Resulting from Mediation adopted by the United Nations General Assembly in 2018 (amending the UNCITRAL Model Law on International Commercial Conciliation, 2002) will also assist signatory countries by providing the legal framework and procedures for implementing the Convention. 

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 an express 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 recognised that difficulties might arise due to their failure to obtain consensus on certain provisions,⁹ and it remains to be seen whether differences in domestic legislation prove to be problematic. 

Accompanying such legislation, we are likely also to see development of further guidelines on mediator conduct, given the potential implications of mediator misconduct under the Singapore Convention.  We can expect mediation institutions to play a key role in development of these guidelines.  The Singapore Convention will have increasing application if more States sign up to and ratify it. The delayed success of the New York Convention illustrates this.  When the New York Convention was first launched on 10 June 1958, there was limited interest, particularly from major trading states. In fact, there were only 10 Signatories at the time of its launch.  Some 60 years later, the New York Convention now boasts 160 Signatories.¹⁰  Whether the Singapore Convention sees a more rapid growth trajectory remains to be seen, although it is expected that it may. It will be also be interesting to see whether the opt-in reservation is utilised and the extent to which parties seek to expressly opt-out.

1. Cara Wong, '46 countries sign international mediation treaty named after Singapore' The Straits Times (Singapore, 7 August 2019) available from https://www.straitstimes.com/singapore/key-facts-about-the-singapore-convention-on-mediation.

2. International Mediation Institute, IMI survey results overview: How Users View the Proposal for a UN Convention on the Enforcement of Mediated Settlements (16 January 2017) available from https://www.imimediation.org/2017/01/16/users-view-proposal-un-convention-enforcement-mediated-settlements/.

3. Report on International Mediation and Enforcement Mechanisms, Professor David S. Weiss, Esq and Michael R. Griffith, Esq, [20].

4. United Nations, General Assembly, Report of Working Group II (Arbitration and Conciliation) on the work of its sixty-fourth session, A/CN.9/867 (1-5 February 2016) available from https://undocs.org/A/CN.9/867, [121].

5. Timothy Schnabel, 'The Singapore Convention on Mediation: A Framework for the Cross-Border Recognition and Enforcement of Mediated Settlements', (2019) 19(1) Pepperdine Dispute Resolution Law Journal 19(1) 42.

6. A reservation that the convention does not apply to the convention party itself or any government agencies is also permitted under Article 8).

7. Article 14 of the United Nations Convention on International Settlement Agreements Resulting from Mediation.

8. Cara Wong, '46 countries sign international mediation treaty named after Singapore' The Straits Times (Singapore, 7 August 2019) available from https://www.straitstimes.com/singapore/key-facts-about-the-singapore-convention-on-mediation.

9. United Nations, General Assembly, Report of Working Group II (Arbitration and Conciliation) on the work of its sixty-eighth session, A/CN.9/934, (5-9 February 2018), available from https://undocs.org/A/CN.9/934, [64].

10. The list of Signatory States can be accessed here (http://www.newyorkconvention.org/list+of+contracting+states).