By Yiming (Irene) Zeng and Yashas Malik
Introduction
The United Nations Convention on International Settlement Agreements Resulting from Mediation, also named the Singapore Convention on Mediation, is a multilateral treaty that applies to international settlement agreements resulting from mediation (Singapore Convention on Mediation, 2024). The Convention aims to solve the lack of a process by which settlement agreements can be recognised internationally. It is recognised as an important development for arbitration and mediation and a meaningful tool for resolving international disputes (Pandjaiitan & Larner, 2024). This report will explore the Convention’s status and discuss its advantages and disadvantages, as well as commentaries from Australia and other countries.
Status of Singapore Convention
The Singapore Convention was adopted by the United Nations in December 2018. It was opened for signature for all States in Singapore on 7 August 2019 and remains open for signature at the United Nations Headquarters in New York. The world’s largest economies, the US, China, India, and South Korea, signed the Convention on the day it opened for signature. As of 13 June 2024, 58 states have signed the convention, and 14 states have deposited their respective instruments of ratification or approval.
Advantages
- Standardised and efficient
The convention has a standardised and efficient framework for enforcing and invoking international settlement agreements, promoting mediation as a viable and effective method for resolving trade disputes. Mediation is an alternative dispute resolution (ADR) process facilitated by a neutral third party aiding a voluntary negotiation. It is often a preferred dispute resolution mechanism due to its promptness, cost-effectiveness, and tendency to maintain the relationship between disputing parties as well maintaining confidentiality (Tan, 2023). Beyond promoting mediation, the convention seeks to facilitate international trade and commerce, benefitting multinational organisations. Signing the convention demonstrates a commitment to trade and investment and in turn consolidates a state’s position in international trade law; signalling its willingness to support alternative dispute resolution mechanisms (United Nations, 2020).
- Fills the gap in the existing framework
Singapore Prime Minister Lee Hsien Loong described the Convention as the “missing third piece” in the international dispute resolution enforcement framework (Lee, 2019). For cross-border disputes, many businesses rely either on arbitration enforced via the New York Convention or litigation. The Singapore Convention complements existing mechanisms and provides businesses with greater flexibility, efficiency, and lower costs, resulting from mediation being easier to enforce internationally (Law Council of Australia, 2020).
- Makes Internationally Mediated Settlement Agreements (iMSAs) enforceable
A notable challenge faced by global commercial mediation has been the complexity of enforcing iMSAs (Tan, 2023). Without the Singapore Convention, iMSAs must be enforced as a contract or under the domestic law of the jurisdiction where enforcement is sought (Alexander & Chern, 2023). If a party does not comply with the terms of the contract, further court proceedings are required to compel the fulfilment of these obligations, which could prove difficult because parties may need to navigate complex legal processes across different jurisdictions (Martignoni et al., 2019). Under the Singapore Convention, a contracting state only needs to submit the iMSA to a court or other body designated by the contracting state for direct enforcement of the settlement agreement. Moreover, the convention lists the possible circumstances under which iMSAs can be enforced and recognised, eliminating the need for time-consuming and costly litigation in foreign jurisdictions (Tan, 2023).
Potential Shortcomings to Overcome
- Varied Standards of Practice
While the Convention allows signatories to enforce settlement agreements according to local rules, this flexibility can lead to uncertainty and potential obstacles. However, by acknowledging these challenges, efforts can be made towards creating more uniform standards to ensure smoother enforcement processes across different jurisdictions (Dani, 2017).
- Confidentiality Concerns
The requirement for written and signed settlement agreements under the Convention can raise confidentiality concerns for mediators. However, this can be addressed by developing protocols and safeguards to protect confidentiality while still complying with the Convention’s requirements (Dani, 2017).
- Standards for Mediator Appointment
The absence of internationally accepted standards for appointing mediators under the Convention can lead to confusion. By collaborating and sharing best practices, different jurisdictions can strive to establish clearer guidelines and standards to enhance the consistency and quality of mediations globally (Dani, 2017).
An Australian Perspective
On 10 September 2021, Australia became a signatory to the Singapore Convention, which reaffirmed its commitment to alternative dispute resolution within the international context. For Australian business owners, especially those engaged in cross-border trade, it offers numerous advantages, such as improving the efficiency of international dispute resolution. This leads to substantial cost savings, enhanced flexibility, and better compliance by the parties concerned. Further, it reinforces Australia’s reputation as a premier hub for dispute resolution and its global standing as a leading destination for international trade and business, and it strengthens trade relations with major economies such as China and India (Hill & Wang, 2021).
The signing of the Singapore Convention marks a significant advancement for Australia’s international dispute resolution framework, heralding improved access to justice in commercial disputes (Payne, 2021). Attorney-General Michaelia Cash highlights that enforceable mediation will streamline dispute resolution, benefiting individuals and businesses by reducing time and costs. Minister for Foreign Affairs Marise Payne (2021) emphasises the Convention’s role in promoting mediation as an alternative to court litigation, facilitating international trade, and ensuring recognition of privately mediated settlement agreements. These comments underscore Australia’s commitment to simplifying and enhancing certainty and autonomy in commercial disputes, signalling support for efficiency and fairness in global trade (Payne, 2021).
Given Australia’s reputation for strict and efficient enforcement of laws, and the exceptional depth of its domestic mediation industry, the country is well-positioned to utilise this opportunity to become a hub for international mediation. By leveraging early adoption of the Singapore Convention, Australia can attract global businesses seeking reliable and effective dispute resolution mechanisms. This strategic positioning not only promotes international trade, but also reinforces Australia’s role as a leader in the global mediation landscape, driving economic growth and fostering a more robust international business environment.
Conclusion
The Singapore Convention on Mediation represents a significant step forward in the realm of international dispute resolution. By providing a standardised and efficient framework for enforcing international settlement agreements resulting from mediation, the Convention promotes mediation as a viable method for resolving trade disputes. It addresses a gap in the existing enforcement framework, making internationally mediated settlement agreements enforceable and eliminating the need for costly and time-consuming litigation across foreign jurisdictions. While there are some challenges, such as the lack of uniform standards of practice and confidentiality issues, the Convention offers tangible benefits for businesses and countries alike. Australia’s signing of the Convention reaffirms its commitment to facilitating international trade and enhancing access to justice, further solidifying its reputation as a premier hub for dispute resolution and a leading destination for global commerce.
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References
Alexander, N., & Chern, C. (2023). The Elgar Companion to UNCITRAL: The Singapore Convention. Edward Elgar Publishing. 242-266. https://doi.org/10.4337/9781803924540.00021
Dani, R. (2017). Singapore Convention on Mediation: Viability & Challenges. VIA Mediation Centre. https://viamediationcentre.org/readnews/MzA1/Singapore-Convention-on-Mediation-Viability-Challenges#:~:text=The%20root%20of%20these%20challenges,hindrances%20to%20the%20Convention’s%20success
Hill, A., & Wang, A. (2021). Australia’s long-awaited signing at the Singapore Convention on Mediation. MST Lawyers. https://www.mst.com.au/australias-long-awaited-signing-at-the-singapore-convention-on-mediation/
Law Council of Australia. (2020). Singapore Convention on Mediation – Consultation Paper. https://lawcouncil.au/resources/submissions/singapore-convention-on-mediation-consultation-paper
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Tan, D. (2023). The Singapore Convention on mediation to reinforce the status of international mediated settlement agreement: Breakthrough or redundancy? Conflict Resolution Quarterly, 40(4), 467-482. https://doi.org/10.1002/crq.21377
United Nations. (2020). United Nations Convention on International Settlement Agreements resulting from Mediation (New York, 2018) (the “Singapore Convention on Mediation”) Commission on international trade law. United Nations. https://uncitral.un.org/en/texts/mediation/conventions/international_settlement_agreements
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