Singapore Convention on Mediation
Forty-six countries have signed up to the United Nations Convention on International Settlement Agreements Resulting from Mediation (“Singapore Convention on Mediation”) today. The signatory countries included Singapore, China, India, South Korea and the USA. The Convention, which was adopted by the UN General Assembly in December 2018, facilitates the cross-border enforcement of international commercial settlement agreements reached through mediation. It complements existing international dispute resolution enforcement frameworks in arbitration (the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards) and litigation (the Hague Convention on Choice of Court Agreements and the recently concluded Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters). Article 1(3) of the Singapore Convention carves out settlement agreements which may fall within the scope of these other instruments to avoid an overlap. The Convention does not prescribe the mode of enforcement, but leaves it to each Contracting State to do so “in accordance with its rules of procedure and under the conditions laid down in this Convention” (Article 3(1)). Formal requirements to evidence the settlement agreement are specified although the competent authority in the state of enforcement is also granted flexibility to accept any other evidence acceptable to it (Article 4). The settlement agreement may only be refused enforcement under one of the grounds listed in Article 5. These grounds include the incapacity of a party to the settlement agreement, the settlement agreement is null and void under its applicable law and breaches of mediation standards. Only two reservations are permitted: one relating to settlement agreements to which a government entity is a party and the other relating to opt-in agreements whereby the Convention applies only to the extent that the parties to the settlement agreement have agreed to the application of the Convention (Article 8).
While mediation currently commands a much smaller slice of the international dispute resolution mode pie compared to arbitration or litigation, some countries are making concerted efforts to promote mediation. To that end, the Singapore Convention will assist to increase mediation’s popularity among litigants in international commercial disputes.
I am a bit puzzled by this – what does the Convention achieve? You are still going to have to bring an action to enforce the settlement contract, no?
It is amazing that on the first day the Singapore Convention can attract so many countries to sign. This is in contrast with the Hague Convention on Choice of Court Agreements and the recently concluded Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters. This may be the issue of the subject matter- mediation v litigation. Is this also partly because of the sponsoring organization-UN v Hague Conference?
See also:
https://uncitral.un.org/en/texts/mediation/conventions/international_settlement_agreements
https://treaties.un.org/pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXII-4&chapter=22&clang=_en
To Thomas Dillon: The Convention provides for the direct enforcement of cross-border settlement agreements between parties resulting from mediation. From my understanding, using the Convention ought to be easier in procedural terms and more cost-effective than the alternative: sue for breach of the settlement agreement/arbitrate and then attempt to get the resulting judgment/arbitral award enforced in the jurisdiction where the judgment/award debtor has its assets.
To Jeanne Huang: I suspect it may be the latter point. But let’s see how many countries enact the Convention into their laws.
Dear Adeline, thank you for your comment. The problem is, I do not see any provision for the “direct” enforcement of a settlement agreement. A country can be a member of the Convention and simply rely on its existing enforcement rules. That may explain why so many countries signed the Convention.
Dear Thomas, I meant ‘direct’ as opposed to the alternative route, as the Convention elevates a private contractual agreement into an instrument that could circulate under the Convention. There is also no need for any approval of the settlement agreement by a national court/authority prior to circulation. Apparently this was suggested, but not pursued, during the negotiations. See Schnabel, (2019) 19:1 Pepperdine Dispute Resolution Law Journal 1, for a helpful account of the Convention’s provisions and the negotiations leading up to it.
Thank you for the reference, Adeline. By deliberately omitting recognition (pace Mr. Schnabel), the Convention returns litigants to the existing rules about the enforcement of settlement contracts. It seems that this was foreseen (see paras 79-80, Report of Working Group II (Dispute Settlement) on the work of its sixty-fifth session (Vienna, 12-23 September 2016) – https://undocs.org/A/CN.9/896).
Dear Thomas, thanks for your comment. I am not sure in what sense you are using the word ‘recognition’, but Schnabel (who was involved in the negotiations) and other commentaries on the Convention state that Art 3(2) covers the concept of ‘recognition’ (in the sense of being able to raise the settlement agreement as a defence), albeit the drafters consciously avoided using the word.
Looking at the Convention from a conflicts perspective, the Convention would be advantageous in instances where the plaintiff would normally sue for breach of contract (and may be bound to do so in a particular jurisdiction because of a dispute resolution clause), but the defendant’s assets in that particular jurisdiction are insufficient to satisfy the judgment (or arbitral award if arbitration proceedings are commenced). The Convention ought to offer an easier route in this instance as there would be no need for the interposition of a judgment/arbitral award, and having to obtain enforcement thereof in another jurisdiction. Article 3(1) allows each Contracting State to use its own procedural rules for enforcement purposes, but those rules have to comply with the conditions set out in the Convention. In particular, the formal requirements set out under the Convention are relatively minimal and intended to be exhaustive.
Singapore law already has quite favourable rules on the enforcement of international mediated settlement agreements as it has set up a separate regime to deal with this issue, as opposed to leaving it purely as a matter of enforcement of a contract. However, I understand from colleagues who have far more expertise on international mediation than I do, that some of the current procedural requirements under Singapore law are still more strict than those set out in the Convention. These would need to be tweaked when the Convention is enacted into Singapore law.
I am using “recognition” in what I think is its strict sense, as in Article III of the New York Convention. I appreciate that the hope of some was to create a system of “direct” enforcement of mediated settlements, but the Singapore Convention simply does not achieve this, as the travaux cited above make clear. In the EU, at least, it will be interpreted in the light of Article 6(2) of Directive 2008/52/EC: ” The content of the agreement may be made enforceable by a court or other competent authority in a judgment or decision or in an authentic instrument in accordance with the law of the Member State where the request is made.” The Convention will be good publicity for mediation, even if it weakens legal certainty with its questionable provisions about mediator misconduct as a defence to enforcement. But that is for another discussion.
Perhaps I could provide some clarifications in respect to the relationship between Art 3(2) of the Singapore Convention in contrast with Art III of the NY Convention. The word ‘recognition’ expressly appears in Art III of the NY Convention, but that term of art is marginalised viz Art 3(2) of the Singapore Convention. The explanation to my mind is rooted in the fundamentals of the concept of res judicata, which provides the theoretical support for private international law recognition of dispute resolution outcomes. ‘Res judicata’ is a Latin term for ‘a matter [already] judged’; it presupposes an outcome of a determinative process. At least in the last 60 years, the arbitration-related jurisprudence has evolved in such a way where it has extended to apply to matters resolved at arbitration (also a determinative process), covered by the terms of reference under an arbitration agreement (AKN v ALC [2016] 1 SLR 966 at [57] – [59]; Econ Piling Pte Ltd v Shanghai Tunnel Engineering [2011] 1 SLR 246 at [37]). This is in line with what Art III of the NY Convention provides.
Also in the common law, a blip in jurisprudence had created a rule that our Court of Appeal in AKN v ALC at [59] had termed an “‘extended’ doctrine of res judicata” which embraces generally the concepts of Henderson v Henderson and the abuse of court processes, to give rise to a general defence that may be applied to stop parties from filing claims in court – which, in practice, is also a manifestation of recognition of dispute resolution outcomes; this has been applied to stop parties from litigating discrete matters already resolved in non-determinative forums such as at mediation (see Chan Gek Yong v Violet Netto [2019] 3 SLR 1218). In the civilian traditions, the latter manifestation of an ‘extended’ doctrine of res judicata simply does not exist; recognition of dispute resolution outcomes remain founded upon res judicata and whatever rules and articles that dictate so in their respective civil codes. Hence during the deliberations of the drafting of Article 3 of the Singapore Convention – led by a Singapore delegate – confusion and a vehement debate materialised, over whether settlement agreements may engender recognition in the private international law sense. There was, in the views of representatives from civilian traditions, no compatibility between the application of a settlement agreement – i.e., a dispute resolution outcome derived from facilitative processes, which essentially is founded on contract – and its recognition (in the private international law sense) in court. Hence to avoid further confusion, the drafters of the Singapore Convention intentionally avoided the word ‘recognition’ in Art 3(2). But in substance, Art 3(2) is drafted in a way that embodies the function of a recognition provision, which could be transplanted into civilian codes of law, if indeed a state of a civilian law tradition signs on to the Convention and must ratify the terms. In other words, they do not need to call it ‘recognition’ in their jurisdiction, but the rest of the world may, objectively, understand this function as ‘recognition’.
There is no such controversy in respect to the drafting of Art III of the NY Convention, as the concept of ‘recognition’ of arbitration outcomes is compatible in both civilian and common law traditions.
In any case, both Art III of the NY Convention and Art 3(2) of the Singapore Convention engenders the same quality of recognition, and it is not true that the Singapore Convention eschews recognition and “returns litigants to the existing rules about the enforcement of settlement contracts”. Issues that have been resolved at mediation cannot be re-litigated in court, if courts of states that have signed on to the Singapore Convention are to comply with Art 3(2).
As to the Singapore Convention interpreted in light of the EU Mediation Directive (2008), this has been provided for under Article 7 of the Singapore Convention, which preserves the subsisting treaty obligations of states/entities signing on to the Singapore Convention. The applicability of the EU Mediation Directive is limited by the domicile of parties to the settlement agreement sought to be enforced. If the EU signs on to the Singapore Convention, the limit would be removed, but it does not mean that they need to abolish the 2008 regime – Article 7 of the Singapore Convention preserves subsisting treaty obligations.
As to the degree of ‘direct’ enforcement of mediated settlements, the directness of enforcement of international mediated settlement agreements under the Singapore Convention is the same as the directness of enforcement of international arbitral awards under the NY Convention. In fact in the context of judicial settlements of an international nature the Singapore Convention provides an even more direct method of enforcement – compared with the enforcement regime under the Hague Convention on Choice of Court Agreements, and also the 2019 Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters – as there is no need to register the settlement agreement in the jurisdiction of its conclusion before it may be circulated extra-territorially.