29 Jul 2019
Singapore Convention, a mediation milestone
By James South
A version of this article first appeared in the New Law Journal on 26 July 2019.
One of the most common refrains I have heard over the years, from judges, lawyers and governments in the over 30 countries I have worked in as a mediator, trainer or consultant is: "what is the point of mediation if any settlement reached is not binding in the sense that it is enforceable?".
This is often said in relation to the domestic legal framework, but it has also increasingly been the case in respect of cross border disputes, which are taking on greater significance in our increasingly globalised world as countries look to encourage foreign investment.
It is for this reason that I believe that the signing of the Singapore Convention on the Enforcement of Mediated Settlement Agreements on 7 August this year, and subsequent ratification by countries around the world will prove to be a significant milestone in the development, use and acceptance of mediation, not only for cross border disputes but domestically as well.
The Convention, which was approved by resolution of the United Nations General Assembly in December 2018, is intended to do the same for mediated settlements in cross-border disputes as the New York Convention of 1959 has done for International Arbitral Awards.
Despite this positivity, for those who hope it will change the field of mediation overnight there may be some disappointment. However, those who expect no change at all are also likely to be proved wrong with the passing of time.
Why a Mediation Convention?
For decades, there has been a wish to improve the status of Cross-Border mediated settlement agreements in order to increase further the enforceability and certainty of settlements. Which is why, as part of its work on commercial settlements, the Working Group II of the United Nations Commission on International Trade Law (UNCITRAL) has been developing a mediation Convention since early 2015.
The perceived need for this work by UNCITRAL came about from international mediation being recurrently turned down as an ADR option for the reason that a settlement might not be readily enforceable in a different jurisdiction.
This might seem hard for many multinationals and the international Alternative Dispute Resolution (ADR) centres, which take part in numerous successful cross-border meditations globally without enforcement issues ever arising.
Nevertheless, the new Convention gives reassurance that a mediated outcome will have the same protection that international arbitration has.
The last decade has seen significant growth for mediation internationally.
Many jurisdictions have incorporated legal recognition of mediation into their domestic legal frameworks, including the legal recognition of mediated settlement agreements.
Mediation laws can now be found from Dublin to Hanoi, and Rio de Janerio to New Jersey. New Jersey is particularly interesting, as its mediation law represents the second prong of UNCITRAL's work stream: in 2017, it was the first jurisdiction to enact (what was then) UNCITRAL's Draft Model Mediation Law. The motivation for creating a model law was to ensure that jurisdictions without provisions for recognising and enforcing mediated agreements, but did not yet feel ready to sign the Convention, would still have access to a mechanism with the same result.
In this way, the Model Law and the Convention exist to compliment each other.
What to expect from the Convention over the next few years
On 7 August, a number of nations will sign the Convention, with the expectation that many more countries will join in the following 12 months. It is great to hear that the United States, China and India,as well as around another 10 states have recently committed to ratifying the Convention, which should encourage other states to follow their lead.
This would replicate the development of The New York Convention, which also did not start with a full complement of nations, but grew over time.
The EU example
In the short to medium term, an important factor of the Convention is its reflection of an international willingness to recognise mediation. .
We can compare its introduction with the EU Cross-Border Mediation Directive (which came into force in 2011) and its own indirect consequences. With the European Union Directive, the EU had already stipulated for over a decade that those countries wishing to accede to the Union should create a hospitable environment for ADR.
However, the consequence of the Directive was to see the enactment of primary legislation in a number of the older Member States, with Italy, Spain and Greece as notable examples (England & Wales was already covered by Civil Procedure Rules of 2000).
Thus, the change in the EU Directive created changes in member states that have been widely favourable to the users of commercial mediation and stimulated new growth in its uptake, beyond the direct impact of the EU Directive. Given the success of the Directive in this respect, it is somewhat disappointing that the EU has not been as forthcoming in relation to encouraging its member states in signing the Singapore Convention.
It can be hoped that something similar will happen on a global scale in relation to the Singapore convention. Given the role the European Union has played in developing mediation in its neighbourhood, it is somewhat disappointing that the EU have indicated that they will not be signing the Convention yet.
It is not unreasonable to expect a growing understanding and willingness towards mediation in both the signatories to the Convention and in their closest trading partners in neighbouring nations.
However, there is still work to be done to ensure that the Convention can really act as a catalyst for the development of mediation worldwide.
The greater the number of signatories the greater the impact it will have.
It is for this reason that CEDR along with many other ADR organisations including the International Mediation Institute, will work together to influence governments around the world to ratify the Singapore Convention as quickly as possible.
The ultimate goal is that in a few years’ time, when a party from any jurisdiction is in dispute with a company from another jurisdiction, whereas a decade earlier they might have been apprehensive about using a less familiar process such as mediation and worried about enforceability, they will now be both a familiar and willing participant.
Whilst there will be specific advances in the use of international mediation in the coming years it may be that in another decade we can pinpoint the signing of this convention as a significant moment in the incremental growth in the use of Cross-Border Mediation.
Further details about the Singapore Convention can be found at its website: https://www.singaporeconvention.org/index.html