The Singapore Convention on Mediation - a new era in international dispute resolution?
Mediation, where parties to a dispute request the assistance of a third person, or mediator, in their attempts to settle their dispute, is an established method of dispute resolution, especially in the commercial sector. It is seen as a less formal method of dispute resolution than court or arbitration proceedings and can be cheaper and quicker. However, it currently suffers from a major disadvantage with regard to disputes with an international background: mediated settlements are not internationally binding.
That may be about to change. The so-called Singapore Convention on Mediation (the “Convention”), a new convention that paves the way for settlements reached by mediation to be recognised internationally, officially opened for signature on 7 August 2019. Under the Convention, parties will be able to apply directly to the courts of a state party to the Convention to enforce settlement agreements resulting from mediation without needing to initiate new proceedings. UNCITRAL, which has developed the Convention, hopes that it will make settlements resulting from mediation much easier to enforce, akin to the New York Convention for arbitral awards, thereby promoting mediation as a mechanism for international dispute resolution.
In this alert we analyse the key aspects of the Convention and examine how it might impact the conduct of international disputes. Businesses entering into contracts with international parties and considering mediation as a dispute resolution mechanism will need to ensure they comply with the Convention’s requirements should they wish later to rely on it.