The ‘United Nations Convention on International Settlement Agreements Resulting from Mediation’ (the Convention) was signed by 46 States on 7 August 2019 in an official ceremony held in Singapore. The Convention, known as the ‘Singapore Mediation Convention’ is the product of the United Nations Commission on International Trade Law (UNCITRAL), and in particular, the Working Group II (Dispute Resolution), which aimed at establishing an international regime for the enforcement of settlement agreements resulted from a successful mediation.
The mediation Convention is generally similar to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the New York Convention) in the sense that it seeks to provide parties with the confidence that any settlement agreements made during mediation will be enforceable directly by the courts of a State ratified the Convention. According to the Preamble of the Convention, this instrument also facilitates the development of ‘harmonious international economic relations between states’.
Practical Benefits of the Singapore Mediation Convention
Establishing an international enforcement regime concerning settlement agreements would render mediation more appealing in the resolution of international trade disputes. A significant practical benefit of this convention is that the contracting States are obliged to recognize international settlement agreements resulting from mediation in commercial disputes. This would entail either direct enforcement of cross-border settlement agreement at the request of either parties or allowing parties to invoke the settlement agreement as a defence against a related claim.
An efficient outcome would be the reduction of the enforcement costs, since a party does not need to commence a claim for breach of contract in the competent national court and attempt to enforce the resulting judgement in foreign appropriate courts.
Harmony with other relevant international instruments
According to its Preamble, the ultimate goal of the Convention is to facilitate the development of ‘harmonious international economic relations between states’. The Convention is likely to achieve the success of the New York Convention in terms of number of signatory states and application by international businesses. Article 1 of the Convention expressly excludes from its scope settlement agreements that have been recorded and are enforceable as arbitral awards, as well as agreements that have been approved by a court or concluded in the course of court proceedings and ‘are enforceable as a judgment in the State of that court’. The reason to exclude these agreements is to avoid potential overlap with existing conventions, notably the New York Convention and the Convention on Choice of Court Agreements (2005), thus creating and maintaining a harmonious relationship concerning the application of international instruments.
Key provisions of the Convention
Apart from Article 1 already discussed briefly, Article 3 entails the key obligations of the Parties to the Convention in relation to both enforcement of settlement agreements and the right of a disputing party to enforce a settlement agreement covered by the Convention. Each Party to the Convention can choose the procedural mechanisms that may be followed where the Convention fails to prescribe any requirement. Article 4 sets out the formalities for relying on a settlement agreement: the disputing party shall provide the competent authority with the settlement agreement signed by parties and evidence showing the settlement agreement resulted from mediation. The competent authority is entitled to request any necessary documents in order to verify that the requirements of the Convention are complied with.