07 Oct 2020
On 7 August 2019, the world witnessed the birth of the Singapore Convention on Mediation (the SCM) – the first international hard law instrument allowing to enforce settlement agreements in states who have become parties to it.
On that day, more than 40 states expressed their support of the document. A year later, on 12 September 2020, the Convention has finally entered into force: 6 states, i.e. Singapore, Fiji, Qatar, Saudi Arabia, Belarus and Ecuador have ratified the document. This procedure allowed to incorporate the Convention into these countries’ national legislation and made it binding upon them.
What is the subject-matter?
The Convention governs solely commercial settlement agreements concluded in writing as a result of mediation. Agreements entered into in order to settle personal, family or household purposes or relating to family, inheritance or employment law, as well as those enforceable as judgements or arbitral awards, do not fall within the provisions of the Convention.
Why is it important?
The SCM borrows a page from the New York Convention and gives parties to mediation an opportunity to directly and relatively effortlessly enforce settlement agreements stemming from cross-border mediation proceedings in countries that have ratified the Convention. Long-lasting, costly and often inefficient enforcement proceedings in national courts will no longer be required.
The instrument was adopted after years of combined effort of more than 100 countries and international organisations under the auspices of the United Nations Commission on International Trade Law (UNCITRAL) Working Group II.
Parties seeking to enforce their settlement agreements in countries which have not yet formally joined the Convention would, however, need to enforce them as usual contracts: that is, only after litigation stage enforcement procedure would take place, provided that the latter exists in the jurisdiction in question.
Mediation has never been the bottom of the ninth: it is widely recognised as a secure, effective and rather delicate means of alternative dispute resolution. The reason for this is that most parties are willing to put an end to their conflict, comply with their settlement agreements’ provisions and ensure the absence of misunderstandings in their future dealings. Wider ratification of the Convention may, however, not only further strengthen mediation’s positions on the market and facilitate recourse to it around the world, but also promote and facilitate international commercial and business affairs.
One might look at the document through a fresh lens…
We live in a progressively complex world. Legal issues of international importance become more and more frequent, while mechanisms of coping with them may not always prove to be efficient.
The global COVID-19 outbreak is a striking case in point. The virus has triggered stagnation of millions of commercial dealings and, as a result, the necessity to resort to dispute resolution services.
Constraining, but essential governmental policies and frequent parties’ inability to progress with their current or plan future proceedings have drawn attention to the importance of non-adversarial and interest-based dispute resolution and enforcement proceedings, like, for instance, mediation.
Even though the traditional way to conduct mediation is to meet and discuss matters of concern physically, efficiency, safety, flexibility and sustainability of mediation, proceedings conducted remotely, in particular, over video calls, has also come to light: parties have an opportunity to resolve their conflicts swiftly, in a comfortable environment, without the need to travel and possibly encounter each other in person. Modern technology available will relieve parties and neutrals of anxiety about at first sight severe drawbacks of remote mediation proceedings.
In this context, more heavy reliance on the procedural freedoms provided for by the Convention might be reasonably expected.
There is still a great number of states who have signed, but not ratified the Convention, however, due to advantageous nature of and an increasing demand for mediation, especially during these challenging times, we believe we might expect some progress on this front.
Mediation is a sensitive dispute resolution process. Its purpose is not only to settle disputes but, more importantly, to preserve friendly and long-lasting relationships between the parties, to find a solution beneficial for both and thus safeguard healthy and cloudless future collaboration. These features of mediation have been known and recognised for a long time, but the Convention has slowly but surely been making progress with their reinforcement.
By Kateryna Honcharenko MCIArb, CIArb Research Executive
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