New Singapore Convention on Mediation opens for signatures
The United Nations Convention on International Settlement Agreements Resulting from Mediation, otherwise known as The Singapore Convention on Mediation ("the Convention"), was signed by an initial 46 countries on 7 August 2019 in Singapore. The Convention will formally come into force six months following ratification by at least three signatories.
The United Nations previously observed that a frequently cited challenge to the use of mediation by international, commercial parties was "the lack of an efficient and harmonized framework for cross-border enforcement of settlement agreements resulting from mediation."
In response, the UN commission on international trade law proposed the Convention with the aim that commercial settlement agreements reached by international parties would be binding and enforceable in signatory States, without the need for further litigation. It is hoped that the Convention will work in much the same way as the New York Convention on the recognition and enforcement of foreign arbitral awards.
The Convention will apply to settlement agreements "resulting from mediation", which are international in nature.
An agreement will be international in nature if (a) at least two parties have their places of business in different States or (b) the State in which the parties have their places of business is different from either (i) the State in which a substantial part of the obligations under the settlement agreement is performed; or (ii) the State with which the subject matter of the settlement agreement is most closely connected.
The Convention does not apply to consumer, personal/family, inheritance or employment disputes.
As with the New York Convention, there are some limited grounds for refusing to enforce a settlement agreement, including, for example, that one party was under some incapacity, that the agreement is void at law, as a result of mediator misconduct or impartiality or if enforcement would be contrary to public policy.
The position in the UK
The United Kingdom has not currently signed the Convention and the law and procedure in relation to the enforcement of foreign mediated settlements in England and Wales continues, for the time being, to depend upon the origin of the settlement:
- In European, cross-border disputes, mediated settlements are enforceable by way of a "mediation settlement enforcement order" pursuant to CPR 78.24. Where there are existing proceedings, parties may make an application under Part 23 of the CPR. Where there are no existing proceedings, parties may make an application under Part 8 of the CPR, as amended by Practice Direction 78.
- In non-European, cross-border disputes, there is no provision for enforcement by the English courts. Where one party to a foreign, mediated settlement refuses or fails to honour the terms of that agreement, the other party would have to sue on the settlement agreement, either in court or arbitration (depending on the dispute resolution mechanism in the agreement) and then look to enforce the foreign judgment/award in England and Wales.
It remains to be seen what the position will be for European, cross-border disputes post Brexit.
It will be interesting to see whether the UK chooses to sign up to the Convention in due course. Whilst there has been a lot of support for the Convention, as demonstrated by the large number of opening signatories, there has also been some criticism. In particular, questions have been raised regarding how parties will be able to demonstrate that a settlement resulted "from mediation" and how allegations of mediator misconduct and impartiality will be dealt with. The Convention does appear to represent a very significant step forward, however, in terms of international recognition of mediation as a legitimate means of resolving commercial disputes.
The full list of signatories
As at 7 August 2019, the following countries are signatories to the Convention: Afghanistan, Belarus, Benin, Brunei, Chile, China, Colombia, Congo, Democratic Republic of Congo, Eswatini, Fiji, Georgia, Grenada, Haiti, Honduras, India, Iran, Israel, Jamaica, Jordan, Kazakhstan, Laos, Malaysia, Maldives, Mauritius, Montenegro, Nigeria, North Macedonia, Palau, Paraguay, Philippines, Quatar, Republic of Korea, Samoa, Saudi Arabia, Servia, Sierra Leone, Singapore, Sri Lanka, Timor-Leste, Turkey, Uganda, Ukraine, USA, Uruguay, Venezuela.
For more information contact Harriet Chopra at Harriet.Chopra@michelmores.com / +44(0)20 7659 4626.