07 Aug 2019
Today, on 7 August 2019 the world celebrated a launch of a new frontier of cross-border mediation: a signing ceremony of the United Nations Convention on International Settlement Agreements Resulting from Mediation (the Singapore Convention on Mediation) took place in Singapore.
46 countries, including the US, China and India signed the Convention, which is believed to be able to play the same part for enforcement of international settlement agreements as the New York Convention, which now has 160 parties, did for arbitral awards.
Hundreds of delegates from various countries attended the ceremony and were able to witness a successful result of several years of joint hard work of more than 80 states (including the US, Canada, Russian Federation, China, India etc.) and numerous IGOs/NGOs within the framework of the United Nations Commission on International Trade Law (UNCITRAL) Working Group II, chaired by Singapore. The aim was to create a special regime where promotion and facilitation of not only international mediation, but also trade and safeguarding enforcement of international settlement agreements resulting from mediation would be more efficient.
"Today, a group of states have come together to recommit ourselves to multilateralism and to declare that we remain open for business, we are prepared to make binding commitments, and we are committed to preserving our relationships." said Lee Hsien Loong, Prime Minister of Singapore.
In 2015 the UNCITRAL Working Group II in New York for the first time entered into discussions about the new Convention that would change a global approach to international nature of mediation in general and a more efficient way to enforce international settlement agreements in particular. Since 2015 various drafts have been proposed and in 2018 the final drafts were approved on the 51st session of the Working Group.
The Convention applies to commercial settlement agreements concluded in writing as a result of mediation. It does not cover agreements enforceable as judgements or arbitral awards and those concluded to settle personal, family or household disputes or relating to family, inheritance or employment law.
Convention also does not prescribe any rules as to how state-parties are expected to conduct enforcement procedures: only reliance on national rules of procedure to this end is expected.
Parties can seek enforcement under the Convention where there is a signed settlement agreement and “evidence that the settlement resulted from mediation” (Article 4 has a number of requirements of such evidence, inter alia, settlement agreement signed by a mediator or a document signed by the mediator indicating that the mediation was carried out).
Incapacity of one of the parties or if the agreement is null and void, inoperable or incapable of being performed in accordance with the law it was subjected to by the parties are some of the grounds for refusing to grant relief under the Convention.
The Convention therefore mirrors some of the provisions of the New York Convention, however it allows its parties to formulate reservations within the limits set forth in Article 8: a state, for instance, can declare that the Convention shall not apply to settlements agreements to which it is a party.
Even though it is still uncertain whether even those states who have already signed the Convention would follow the road offered by the instrument in question, since only ratification is able to make it a part of their national legislation, a significant number of signatures has demonstrated that states are willing to take international mediation to a new level.
The Convention has the necessary power to invigorate wider use of cross-border mediation and allow parties to avoid time and cost-inefficient routes to enforcement they encountered before: through litigation procedures in national courts. Instead, parties will now be able to apply for enforcement directly. Time will tell whether the mechanism provided by the Convention can meet the needs of modern realities.
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