The United Nations Convention on International Settlement Agreements Resulting from Mediation, also known as the “Singapore Convention on Mediation” (the “Convention”) is intended to provide a framework for the enforcement of international settlement agreements resulting from mediation.
What is mediation?
Mediation is a process whereby parties attempt to reach an 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 to the dispute.
Why consider mediation?
The mediation process is more flexible, and in many instances, more cost and time efficient than other dispute resolution processes such as litigation and arbitration.
Further, as noted in the Preamble to the Convention, the use of mediation reduces instances where a dispute leads to the termination of a commercial relationship.
What agreements does the Convention apply to?
Agreement resulting from mediation and concluded in writing by parties to resolve a commercial dispute (the “settlement agreement”) which, at the time of its conclusion, is international.
What settlement agreements are excluded by the Convention?
What are the requirements for enforcement?
What grounds can the competent authority of the Party to the Convention rely on to refuse to grant relief?
Which states have signed the Convention?
As of 7 August 2019, 46 states have signed the Convention. A full list of the signatories is available here.
What is the status of the convention?
The Convention enters into force six months after deposit of the third instrument of ratification, acceptance, approval or accession. As of the date of this Article, the Convention is not yet in force.
How does the Convention impact the shipping industry?
In recent years, mediation as a mode of dispute resolution is increasingly gaining recognition in the shipping industry. Mediation forms part of BIMCO’s Standard Dispute Resolution Clause. Maritime arbitral institutions have procedures by which parties are asked to consider whether the case is suitable for mediation (e.g. Third Schedule of LMAA Terms and Schedule A of SCMA Rules) and have also set up mediation procedures either within or associated with the arbitration process (e.g. LMAA / Baltic Exchange Mediation Terms, SMA Rules for Mediation, SCMA Arb-Med-Arb Protocol).
Further, given the expectation of an increase in the number of international commercial disputes in Asia with trade initiatives such as China’s Belt and Road Initiative, it is important that such disputes can be resolved quickly and efficiently.
The coming into force of the Convention therefore promotes the cross-border enforcement of international commercial settlement agreements reached through mediation.
To this end, Members may wish to consider whether it may be appropriate (a) to refer dispute(s) to mediation in the first instance and/or (b) for mediation clauses to form part of their standard form contracts.