THE SINGAPORE CONVENTION

IMPLICATIONS FOR MEDIATING INTERNATIONAL COMMERCIAL DISPUTES (UPDATE)

On 12 September 2020, the United Nations Convention on International Settlement Agreements Resulting from Mediation, also known as the Singapore Convention (‘Convention’) came into force.

The Convention opened for signatures just over a year ago, on 7 August 2019, and very rapidly gained 53 signatories, signalling a widely felt appreciation of the need for such an instrument, under which Convention states agree to enforce international settlement agreements arising from mediation of disputes (see The Singapore Convention – Implications for Mediating International Commercial Disputes).

Key signatories of the Convention include the US, China and India, and to date it has been ratified by Ecuador, Fiji, Qatar, Saudi Arabia, and Singapore, while the UK and the EU have yet to sign. The EU has first to decide whether its member states can sign the Convention individually or whether the EU can sign the convention on behalf of its members. The UK is yet to state its position on whether it will sign and ratify the Convention after it leaves the EU in January 2021.

However, even if the EU or its member states, or the UK do not become parties to the Convention ratify, an international settlement agreement arising from a mediation in these states can still be relied on and enforced in a Convention state. This is because the Convention does not apply the principle of reciprocity, meaning that a Convention state will enforce such a settlement agreement even if mediation from which it resulted was held in a non-Convention state.

Rapid adoption

The speed with which the Convention has come into force suggests that there is substantial ‘buy-in’ to the idea of using mediation as a means of resolving international disputes. Contrasted with litigation or arbitration, mediation provides for both a confidential means to resolve disputes while preserving a way for parties to negotiate a solution to their dispute that avoids a ‘winner take all’ outcome. As more countries ratify the Convention, thereby making international settlement agreements produced by mediation easier to enforce, the attractiveness of mediation as a means of resolving international disputes will undoubtedly increase.