Singapore Convention heralds new era for international mediation – or is it a false dawn?

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7 August 2019 will herald a new era in international mediation with the introduction of a new global enforcement scheme for mediated settlements.

The signing of the United Nations Convention on International Settlement Agreements Resulting from Mediation, or (to use its catchier title) the Singapore Convention, is in response to claims that the absence of such a regime has limited the use of mediation in an international context. It applies to international agreements resulting from mediation and concluded in writing to resolve commercial disputes.

It is hoped that the Singapore Convention will have the same positive impact on mediation as the New York Convention had on arbitration, making it the default option for commercial parties embroiled in international disputes. Unfortunately, that optimism is somewhat tempered by a degree of scepticism over the inclusion of Article 5(1)(e) which deals with grounds for refusing to grant relief against enforcement.

The reason for concern is the introduction of a ground for resisting enforcement based on mediator misconduct. It provides that enforcement of a settlement reached at mediation may be refused if there has been “a serious breach by the mediator of standards applicable to the mediator or the mediation without which breach that party would not have entered into the settlement agreement.”

This implies that a party resisting enforcement will have recourse to Article 5(1)(e) as an additional ground of defence based on breach of highly subjective standards, such as fairness or impartiality. Equally, the perception of the mediator’s conduct may be clouded by their experience and the outcome of the process.

Also, due to the fact that Article 5(1)(e) addresses the conduct of the mediator rather than parties involved, a party faced with a defence on this ground may not be aware of the circumstances surrounding it if the alleged misconduct took place in a private session.

Others regard enforcement as a non-issue. They argue that settlement agreements mitigate risk with a ‘belt and braces’ use of securities, guarantees and asset-backed obligations. Ultimately, the parties signing up to a mediated deal will naturally want to factor in compliance as a mutually beneficial aspect.

Putting those reservations aside, it is hoped that a standard coherent framework for cross-border enforcement of settlements provided by the Singapore Convention will encourage the international use of mediation. Research conducted by the International Mediation Institute indicates that a formalised convention would have such an effect.

In any event, it is likely that instances requiring the International enforcement of settlement agreements under the Singapore Convention will be few and far between, partly because it has been drawn up in restrictive terms which include the requirement to prove a causal link between the ‘serious breach’ and the party entering into the settlement agreement. However, on these rare occasions, it will be interesting to see how often the Article 5(1)(e) defence is invoked.

Ultimately, it cannot be denied that the Singapore Convention is well-intended and if it helps to remove a perceived barrier to the use of international mediation then it will have served its purpose. It may even bolster the profile mediation across the globe. Time will tell.