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SINGAPORE MEDIATION CONVENTION- A GAME CHANGER?

- By Kanika Saran


Keywords: Singapore Convention, settlement agreement, mediation, enforcement, arbitral awards


Introduction

Alternate methods of dispute resolution play a crucial role in the resolution of commercial disputes. Parties prefer mediation for dispute resolution due to its efficiency, however, lack of an international enforcement mechanism has been one of the significant disadvantages/drawbacks of such process. Therefore, following in the steps of the New York Convention, the UNCITRAL Working Group II framed the United Nations Convention on International Settlement Agreements Resulting from Mediation (the “Singapore Convention”) [1]. The Singapore Convention responds to the demand for an expeditious enforcement mechanism [2] that allows the Court to enforce the mediated settlement agreement in cross – border disputes in the signatory country, under the conditions stated in the Convention. [3] Although, the New York Convention has been envisaged as a ‘game changer’ in the alternative dispute resolution space, in comparison, the Singapore Convention is still in its infancy.


A Critical Analysis of the Convention:-

Article 2(3)- The scope of ‘Mediation’ is too broad–

Firstly, the Singapore Convention does not lay down specific standards as to the qualification of a mediator. Furthermore, due to lack of an uniformly accepted standard of qualification, it leads to disparity and confusion. Secondly, the definition of ‘Mediation’ does not give any concrete stand on the source of mediation that may constitute the mediation process. The Convention will include the scope of the settlement of a dispute by mediation as well as any other means including via conciliation, a decision by the expert body, or in any other form. Therefore, the potential for adopting varied procedures in the mediation process may give rise to problems of enforcement of settlement agreements as the procedures may vary across different jurisdictions.


Article 3(1) - Uncertainties surrounding the enforcement procedure –

The Singapore Convention does not clearly state the procedure for enforcement. In fact, Article 3(1) leaves open-ended questions with respect to the relief available to the parties for enforcement of a settlement agreement. Generally, damages or specific performance of a contract are considered to be the appropriate relief for a challenge to a contract. However, the signatories to the Singapore Convention will have to undertake a gap-filling exercise in this regard to clarify this aspect through their domestic legislations in order to avoid undue/unnecessary confusion amongst parties. The dependency on local law will only create challenges for the signatories due to lack of uniform standard of practice.


Article 4(1)(b)(i) & (ii)- Signature of the Mediator on the Settlement Agreement

The scope of the evidence of the settlement agreement requires the signature of the mediator on the settlement agreement or document stating that mediation had taken place. However, it does not require the signature of the parties to the mediation. In practice, most mediators refuse to sign the mediation agreement or give evidence that they mediated the agreement. Therefore, there will neither be any reasoning for reaching the settlement agreement nor any certainty that such mediation was carried out among the parties.


Article 5(1)- Refusal to grant relief at the request of the party –

The competent authority may refuse to grant any relief upon the request of a party until a proof is provided with respect to the applicability of any of the grounds mentioned in Article 5(1) of the Singapore Convention. Permitting the aforesaid will lead to ambiguities in mediation and distrust of the parties to the mediation in the clear presumption of enforcement of settlement agreement. Refusal to grant relief will force the parties to go back – and – forth, despite reaching a settlement agreement through mediation.


Article 5(1)(b) (i) and (ii) – The requirements of an enforceable settlement agreement-

The scope under Article 5(1)(b)(i) is wide enough to cover all kinds of contracts. Irrespective of whether the party has signed a settlement agreement or not, this provision casts an additional duty on the parties to establish that the “agreement in principle” was binding while seeking enforcement. [4] Moreover, “according to its terms” provides for a restriction within the scope of the agreement.


Article 5(1)(e) – The standards to measure serious breach by the mediator-

The question regarding the ‘standards’ applicable to judge the scope of a ‘breach’ has not been stated clearly. The ambit of ‘breach’ ranged from ‘any breach’, ‘material breach’ to ‘unacceptable breach’. [5] Moreover, the National Court where the mediation took place may refer to the rules of code and conduct applicable to measure the ‘breach’ by the mediator in that jurisdiction. [6] Therefore, different domestic codes of conduct applied to evaluate the mediator might lead to a number of different, and inconsistent, enforcement reliefs across various jurisdictions.


Article 5(1)(f)- Disclosure by a Mediator –

An acceptable defence to enforcement will be if the parties to the mediation are able to establish that the mediator’s failure to disclose circumstances raising doubts to its impartiality and independence has impacted as well as influenced, not only the intention of the parties but also the outcome of the settlement agreement. However, this provision is clearly in contrast with Article V(1)(b) of the New York Convention, as neither the parties are required to establish that the circumstances had an influence on the arbitral award, nor is the same accepted as a ground for refusal of enforcement of the arbitral award.


Article 6(1)- ‘Opt in’ or ‘Opt out’ is compromised:-

The ‘opt in’ or ‘opt out’ procedure allows the parties to have the contents of the settlement / written agreement to be made enforceable, with the consent of the other party. Such formalities can expose the parties to the mediation to time consuming as well as costly process which may persuade them to choose multi-tiered (arbitration – mediation – arbitration) methods for dispute resolution which provides finality as well as expedites the enforcement of the arbitration awards.


Concluding Remarks

The New York Convention has been ratified by 165 countries and Singapore Convention has only been signed by 53 countries and has been ratified by only 5 countries. Therefore, parties to commercial transactions will continue to prefer arbitration over mediation as the enforcement of an arbitral award is easier and its finality narrows the scope for the award to be set aside. It is not enough for a country to be a signatory to the Singapore Convention, until the domestic courts limit the scope of grounds challenging such agreements. Moreover, there is a requirement for formulating proper guidelines regarding various concerns of a mediator, in order to minimize future issues regarding enforcement of the settlement agreements. The Convention has several loopholes which are required to be clarified before parties opt for mediation over arbitration, Although, this Convention is considered to be a welcome change for international resolution of disputes, there is a long way before it can be considered to be a viable option for commercial disputes.



Kanika Saran is a Litigation & Arbitration Associate at ZEUS Law Associates, Delhi. She holds an LLM LLM in International Arbitration and Dispute Resolution from the National University of Singapore.

Preferred Citation – Kanika Saran, ‘Singapore Mediation Convention - A Game Changer?’ (ICAR, 31 March 2021) <insert accessed link here>.


ENDNOTES


[1] United Nations Convention on International Settlement Agreements Resulting from Mediation, United Nations published at <https://uncitral.un.org/sites/uncitral.un.org/files/singapore_convention_eng.pdf > accessed on 10th March, 2021 (hereinafter, the “Singapore Convention”).


[2] Article 4(5) of the Singapore Convention.


[3] Article 3(1) of the Singapore Convention.


[4] Ben Davidson, Michael Lo, ‘The Singapore Mediation Convention: a way forward for international dispute resolution?’ (Corrs Chambers Westgarth) < https://corrs.com.au/insights/the-singapore-mediation-convention-a-way-forward-for-international-dispute-resolution> accessed on 6th March, 2021.


[5] Michel Kallipetis, QC, ‘Sponsored briefing: The Singapore Convention- The Mediator’s Perspective’ (Disputes Yearbook 2020 (Legal Business), 27th March, 2020) < https://www.legalbusiness.co.uk/analysis/disputes-yearbook-2020/sponsored-briefing-the-singapore-convention-the-mediators-perspective/ > accessed on 15th March, 2021.


[6] Sapna Jhangiani, ‘The Singapore Convention on Mediation – A Commitment to Multilateralism’ (Clyde & Co, 20th August, 2019 < https://www.clydeco.com/insight/article/the-singapore-convention-on-mediation> accessed on 17th March, 2021.

The views and opinions expressed in the article are those of the author(s) solely and do not reflect the official position of the institution(s) with which the author(s) is /are affiliated. Further, the statements of the author(s) produced herein should not be construed as legal advice.


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