Commercial mediation in Singapore

Mediation can be court-based or private, the former being conducted by a judge or court official and the latter being referred either to the SIMC or the SMC. The SIMC, which was established as part of a drive to provide world-class mediation services, also provides a hybrid “Arb-Med-Arb” process, which can ultimately result in a mediation settlement being recorded as a consent arbitral award. Unless contractually agreed, there is no obligation to mediate. However, the courts can encourage mediation through specially designed programmes. There may be adverse costs orders as a result of a party’s conduct in relation to mediation. Mediations are confidential. Settlement agreements are enforced as contracts but under provisions of national and international law, may be more easily enforceable.

What is the status of mediation in this jurisdiction?

Mediation is a recognised form of ADR in Singapore. It is not only employed privately in disputes matters but forms an integral part of the dispute resolution framework in Singapore.

The introduction of the Singapore Mediation Act (“Mediation Act 2017”) on 1 November 2017, as well as the Singapore Convention on Mediation Act 2020, which was passed into law on 3 February 2020 and came into effect on 12th September 2020, both allow parties to apply to the Singapore courts to record their mediated settlement agreement as an order of the court. This enables the agreement to be directly and immediately enforceable as a court order if there are subsequent breaches of the terms of the agreement.

How is a mediation conducted?

Mediation in Singapore has been largely institutionalised. In addition to court-based mediation, disputants may also undertake private mediation in a structured manner.

Court-based mediation is mediation conducted in the court by a judge or court official after parties have commenced litigation proceedings. The bulk of court-based mediation is handled under the Court Dispute Resolution mediation programme (“CDR”) at the Primary Dispute Resolution Centre (“PDRC”). Under the CDR programme, either the party or their lawyer can apply for mediation after all the pleadings have been filed and all parties involved agree. Upon receiving the written application for mediation, PDRC will schedule a mediation session which is presided over by an experienced District Judge who plays the part of a settlement judge.

Parties who wish to pursue private mediation refer disputes to the Singapore International Mediation Centre (“SIMC”). In line with the goal of making Singapore a premier destination for legal services and resolution of disputes in Asia and globally, and to meet the increasing demand for quality dispute resolution services, the SIMC was launched on 5 November 2014 as an independent, not-for-profit institution that aims to provide world-class mediation services targeted at the needs of parties in cross-border commercial disputes, particularly those based in Asia. Together with the Singapore International Arbitration Centre (“SIAC”) and the Singapore International Commercial Court, the launch of the SIMC completes the suite of options available to international users of cross-border commercial dispute resolution services.

The SIMC provides three main services:

First, it primarily administers mediations if parties have agreed to have the mediation conducted in accordance with the SIMC Mediation Rules.

Second, for mediations which are not administered in accordance with the SIMC Mediation Rules, parties may consent to use SIMC’s services as an appointing authority for mediators or experts on an ad hoc basis.

Third, SIMC collaborates with SIAC to provide services under an innovative hybrid process known as “Arb-Med-Arb”.

“Arb-Med-Arb” is a process whereby a dispute is formally referred to arbitration before mediation is attempted. After the commencement of the arbitral proceedings, the arbitration is stayed for parties to mediate their dispute. If the parties are able to resolve their dispute through mediation, their mediated settlement agreement may be recorded as a consent arbitral award. This arbitral award would be internationally enforceable under the framework of the New York Convention. If the parties are unable to settle their dispute through mediation, they can continue with the arbitration proceedings. Under the SIAC-SIMC Arb-Med-Arb Protocol, the arbitrators and mediators are separately and independently appointed by SIAC and SIMC respectively. The arbitrators and mediators would ordinarily be different persons unless otherwise agreed by the parties. With this process, the cost-effectiveness and flexibility of mediation is combined with the finality and enforceability of arbitration.

Private mediation could also be conducted by the Singapore Mediation Centre (“SMC”), a non-profit organisation guaranteed by the Singapore Academy of Law. Typically, one or both parties contact SMC with a request for mediation. The case may also be referred to SMC by the courts. When the consent of all parties involved has been obtained, SMC arranges for the Mediation Agreement to be signed, appoints a mediator and attends to all other administrative details such as date, time and place for mediation. A party may reject the proposed mediator if it has valid reasons to do so (e.g. conflict of interests). The parties’ lawyers play a significant role in assisting the mediator and advising the parties throughout the mediation process.

Is there any obligation on litigants to mediate?

Litigants are only obliged to mediate when mediation clauses have been incorporated in their contract. The apex court of Singapore, the Court of Appeal, held in the case of HSBC Institutional Trust Services (Singapore) Ltd v Toshin Development Singapore Pte Ltd [2012] SGCA 48, that an agreement to negotiate in good faith (in the form of an express clause found in a contract) is effective and enforceable. Parties to such agreements are bound to negotiate in good faith. More recently, in the case of International Research Corp PLC v Lufthansa Systems Asia Pacific Pte Ltd and another [2013] SGCA 55, the Court of Appeal also held that a multi-tiered dispute resolution clause that mandates that parties mediate before proceeding to arbitration, is effective and enforceable. The parties’ obligation to mediate was viewed as a pre-condition to a valid arbitration in that case.

Where there is a breach of a mediation clause, normal contractual principles apply, and parties are potentially entitled to various remedies, including damages or a stay of proceedings.

Nonetheless, courts today increasingly encourage mediation. For appeals made to the Court of Appeal from the High Court, the Supreme Court Registry plays a role in encouraging mediation in appropriate appeals via recommended directions in case management conferences. Particular efforts were made to promote mediation in cases with claims between S$100,000 and S$250,000 in the Subordinate Courts. Special pre-trial conferences were also implemented to inform the parties concerned of all dispute resolution programmes available. In fact, almost all cases at the Subordinate Courts undergo some form of mediation.

Does the court have powers to support a mediation?

Generally, courts cannot compel parties to mediate a commercial dispute. However, the Subordinate Courts adopt a holistic approach in the provision of dispute resolution services to the wider community. Specially designed mediation programmes are available within the courts for a wide range of disputes, one of which is CDR where civil disputes are referred for mediation by the PDRC, as explained above.

Other mediation programmes offered in the courts include that offered by the Small Claims Tribunal which was established in 1985 with the passing of the Small Claims Tribunals Act. It handles disputes relating to contracts and claims not exceeding S$10,000 in value. Once a claim is lodged in the Small Claims Tribunal, the parties concerned are obliged to attend a mediation session before a registrar. Where an amicable resolution cannot be reached, the matter will be fixed for hearing before a referee.

Does failure to mediate attract adverse cost consequences?

The Singapore Rules of Court have been recently amended to provide that adverse cost consequences may be ordered having regard to a party’s conduct in relation to mediation or ADR. Order 59 Rule 5(c) of the Rules of Court provides that when the Court is exercising its discretion as to costs, it shall take into account “the parties’ conduct in relation to any attempt at resolving the cause or matter by mediation or any other means of dispute resolution”. While there is no established case law examining the effect of this amendment, it suggests that Singapore is adopting a progressively active stance in encouraging ADR, particularly mediation.

Are mediations confidential?

Mediations in Singapore are confidential. Apart from the mediator and the parties, no third party is privy to the mediation proceedings. Discussions which may prejudice a party will not be revealed in court if mediation is unsuccessful. Further, matters raised in private interviews between the mediator and a party during the mediation process cannot be disclosed to any other party by the mediator. Where mediation sessions are conducted at SMC, mediators and the parties are bound by an agreement which prohibits the disclosure of information relating to the mediation.

Several statutory provisions have been enacted to safeguard the confidentiality of mediation through privilege and secrecy provisions. These provisions include sections 19 and 20 of the Community Mediation Centres Act and section 23 of the Evidence Act.

Is there a system of accreditation and/or regulatory body for mediators?

In private mediations, there is no law or system regulating the accreditation or standards of mediators. Thus, SMC has designed its own scheme of mediator training and accreditation. SMC invites nominations from various professional and trade organisations. These nominees attend a mediation workshop at SMC and depending on their assessment after the workshop, they may be appointed to the Panel of Principal Mediators. SMC’s accreditation is subject to renewal every year. Under the SMC Mediation Procedure, a mediator has to comply with the SMC’s Code of Conduct, which guides the mediator with regard to issues such as neutrality, impartiality and confidentiality.

On the other hand, mediations at CDR are conducted by judges, as it is presumed that they will command greater respect and confidence from the parties in dispute. Settlement judges are directed by the Model Standards of Practice for Court Mediators of the Subordinate Courts. They are also required to subscribe to the Code of Ethics for Court Mediators of the Subordinate Courts of Singapore. The Code of Ethics covers issues concerning informed consent, conflict of interests, neutrality, impartiality and confidentiality.