The Singapore Convention

Settlements reached in cross border mediation will soon be enforceable internationally just like arbitral awards when UNCITAL’s Singapore Convention, the first UN treaty named after Singapore, comes into force in August next year provided sufficient countries ratify.

As a result, there is an expectation by Singaporean authorities that the city state’s most favoured status as an international mediation venue will be further confirmed.

Seen as mediation’s answer to the New York Convention that allows for the easy enforcement of arbitration awards, the Singapore Convention comes on top of much mediation activity in Singapore having last year also enacted a Mediation Act whereby mediated agreements can be recorded as orders of Singapore’s courts, allowing parties to enforce their terms more easily.

Key terms of the Singapore Convention include*;

Article 1 outlines the scope, applying the Convention to cross-border commercial disputes resolved through mediation where “at least two parties to the [written] settlement agreement have their places of business in different States” or in which parties “have their places of business different from either the State in which a substantial part of the obligations under the settlement agreement is performed or the State in which the subject matter of the settlement agreement is most closely connected.” Article 1 specifically excludes settlement agreements related to consumer, family, inheritance, and employment matters, as well as those enforceable as a judgment or as an arbitral award.

Article 2 defines key terms used in the Convention such as “place of business,” “in writing,” including in electronic form, and even “mediation.”

Article 3 summarizes the general principles and obligates member States that ratify the Convention and also permits a party subject of the Convention to invoke a defense and to subsequently prove that a particular dispute being raised was already previously resolved by a settlement agreement.

Article 4 provides a specific but broad checklist of what a party must supply for enforcement of the international settlement agreements that result from mediation. Article 4 includes submission of a “settlement agreement signed by the parties” and “evidence that the settlement agreement resulted from mediation.” Evidence includes items “such as” a “mediator’s signature on the settlement agreement,” or “a document signed by the mediator,” or “an attestation by the institution” administering the mediation. In the absence of such proof, Article 4 allows a party to submit “other evidence” acceptable or required by a competent authority of the member State where relief is sought. Article 4 also addresses key issues related to electronic communication, translation of settlement agreements, and calls for the competent authority of the member States enforcing the settlement agreements to “act expeditiously.”

Article 5 was vigorously debated and certain overlaps within the Article are intentional to accommodate the concerns of a member State’s domestic legal systems. Article 5 includes the grounds when a competent authority may refuse to grant enforcement. These circumstances include incapacity of a party, or where the settlement agreement a) is null and void, inoperative or incapable of being performed; b) not binding or not final; c) was subsequently modified; d) was performed; e) is not clear or comprehensible; or where granting relief would be contrary to terms of the settlement agreement or contrary to public policy, and subject matter is not capable of settlement by mediation under the law of that party. A competent authority may also refuse to grant relief where there is a serious breach by the mediation of standards applicable to the mediator or the failure by the mediator to disclose to the parties’ circumstances as to the mediator’s impartiality or independence.

Article 6 addresses issues of parallel applications or claims and draws inspiration from the New York Convention. It grants, to the competent authority of the member State where relief is being sought, wide discretion to adjourn its decision under the Convention where an application or claim relating to a settlement agreement was made in a court, an arbitral tribunal, or other competent authority.

Article 7 also draws inspiration from the New York Convention and allows member States flexibility to enact national legislation in their countries to expand the scope of settlement agreements excluded by Article 1, Paragraphs 2 and 3 of the Singapore Convention.

Article 8 allows for a tailored adoption of the Convention by each member State, allowing for two reservations when ratifying the Convention. The first reservation is one which relates to the member State or its own governmental agency. The second allows for a declaration that the Convention applies only where the parties to the settlement agreement resulting from mediation have agreed to the application of the Convention.

* Singapore Convention: A First Look by Deborah Masucci and M. Salman Ravala

Brick Court mediators are active in Singapore and Hong Kong and would be delighted to talk to you about mediating in Asia.

Brick Court Mediators In Asia

This week Geoff Sharp was appointed one of a handful of Senior International Mediators to the new Mainland China – Hong Kong Mediation Center.

Being the first joint mediation center in the region set up by two major mediation institutions in Mainland China and Hong Kong, the Center aims to provide an effective platform for resolving cross-border commercial disputes between Mainland China and Hong Kong, in particular with China’s “Belt and Road” initiative.
The Center is a joint venture between the China Chamber of International Commerce and the Hong Kong Mediation Centre, with the vigorous support of the Department of Justice.
The Belt and Road inititive together with the National 13th Five-Year Plan means cross-border trade is set to increase drastically and commercial disputes are expected to follow.

 

Mediation in Singapore

Singapore Guidemediation-in-singapore-dataLast week Thomson Reuters launched “Mediation in Singapore: A Practical Guide”  highlighting the growth of mediation in Singapore.

The publication provides an overview of both the development and current practice of mediation in Singapore. It includes discussions on aspects of mediation encompassing the psychological, cultural and legal aspects of the mediation process: how parties choose a mediator, mediation agreements, enforcement of mediation settlements, accreditation of mediators, mediation in family disputes, divorce, family estate disputes, and many other topics.

Editors include BCC mediators’ good friend and local commercial mediator George Lim S.C. and CEDR’s man in Asia, Danny McFadden.

Other contributors include well known Singaporeans in mediation circles; mediation academic from the National University of Singapore, Associate Professor Joel Lee, Gloria Lim from the Ministry of Law, Eunice Chua from Singapore International Mediation Centre, and Loong Seng Onn and Deborah Koh from Singapore Mediation Centre. Purchase information

Well done to all involved.

BCC mediators are active in Asia and a number belong to the invitation only panel of the Singapore International Mediation Centre and are available for mediations in Singapore.

Clever Thinking Out of Dubai

Dubai, February 2015: DIFC Courts Practice Direction No. 2 of 2015 – parties can now choose to refer their DIFC money judgments for enforcement through the DIFC-LCIA Arbitration Centre, effectively converting their judgement to an arbitral award.

Having done that, the arbitration award should be enforceable in all New York Convention countries thereby avoiding limitations of state court judgments that they are not normally enforceable outside of the home jurisdiction absent the usual and limited reciprocal enforcement mechanisms.

To some extent this mirrors the efforts by some in the mediation community, including the IBA, to find a mechanism to turn a cross border mediated settlement into an arbitral award which would then be enforceable internationally under the New York Convention.

For more, see two short Kluwer articles The Handbrake on Global Mediation and The Race towards a New York Convention for Cross-border Mediated Settlement Agreements: the Fable of the Tortoise and the Hare Revisited?

This lack of any coherent method of enforcement is widely seen as a major impediment to further globalisation of mediation, the argument being how can we expect parties involved in large international commercial disputes to embrace mediation if there is a risk that any outcome might be, to all intents and purposes, unenforceable.

DIFC’s innovative Practice Direction issued in February and subject of much discussion since late 2014, is the first of its kind globally – it offers parties the advantages of both litigation and arbitration since it allows the DIFC-LCIA Arbitration Centre to provide an additional remedy to the judgment creditor if the parties choose to submit any disputes they may have about the payment of money judgments to arbitration under the auspices of the DIFC-LCIA Arbitration Centre. In this way the judgment creditor obtains an arbitral award for their unpaid money judgment that can be enforced in the 150 plus New York Convention countries providing greater enforcement internationally.

As Michael Hwang, Chief Justice of the DIFC Courts, says

 we have developed an important tool to synthesize litigation and arbitration by giving concurrent remedies for enforcement and thereby resolve one of the great problems of international litigation

DIFC Courts Practice Direction No. 2 of 2015 – Referral of Judgment Payment Disputes to Arbitration

DIFC Courts – Chief Justice’s Explanatory Lecture on Referral of Judgment Payment Disputes to Arbitration – November 2014

International Mediation – A Comparative Table of Institutional Mediation Rules

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In the world of international mediation, global providers such as ICC, WIPO and AAA/ICDR dominate the landscape together with various more regionally based institutions such as HKIAC, SMC and CEDR.

Brick Court mediators belong to a number of these organisations’ panels including, the World Intellectual Property Organisation , CEDR, Singapore Mediation Centre and the new Singapore International Mediation Centre – and while the International Chamber of Commerce does not retain a mediation panel, Brick Court mediators have historically been selected as mediators for ICC matters.

Of course, parties who choose to resolve cross-border disputes by way of mediation are free to develop their own bespoke rules of engagement as they might in their domestic mediations via a comprehensive mediation agreement (ad hoc mediation) – however, and although there are cost implications, parties to international mediations usually perceive real benefits in adopting a tried and true process administered by a respected and often global ADR provider (administered mediation).

Many parties arrive at the door of their chosen ADR provider because their contract, about which they are now in dispute, contains a dispute resolution clause containing an agreed dispute process and names a particular institution to administer it. These clauses are well known, for instance the standard ICC multitiered clause requiring the parties to refer the dispute to the ICC mediation rules and if it does not settle, to ICC arbitration. Such clauses are inserted into thousands of contracts all around the world.

It is because of the complexity that often accompanies cross-border commercial disputes – usually of higher value and involving more participants in more places and time zones than their domestic counterparts as well as almost always involving cultural and language differences – that institutional administrative support is seen as a vital ingredient to international mediations.

This usually comes in the form of comprehensive case management which, in the case of the best institutions, does not stop when the case is transferred to the appointed neutral.

Institutions also tend to play an important role in the selection of the mediator, especially when the parties disagree over the appropriate person or, more usually, when they simply do not know how to find a suitably qualified neutral.

And there is no doubt that these global institutions are in competition with 2014 seeing a number of ADR providers enhancing their mediation rules to make them more relevant to business and more attractive to users. All of ICC, WIPO, ICDR and CEDR have made significant updates to their mediation rules this year, the highest profile being ICC’s ‘world tour’ taking its new rules on the road where they were unveiled to much applause in the great capitals of the world from Paris to Singapore to New York and Dubai and developing mediation markets including Brazil, Panama, Turkey São Paulo and the Philippines and translated into multiple languages for use in hundreds of countries.

So how do these rules shape up in the important areas of mediator appointment, process, mediator recommendations and decisions, confidentiality, parallel arbitration/litigation, costs and fees?

This Comparative Table looks at the recently updated mediation rules of:

  1. International Chamber of Commerce administered by the International Centre for ADR (ICC)
  2. World Intellectual Property Organisation (WIPO)
  3. American Arbitration Association’s International Centre for Dispute Resolution (ICDR)
  4. Singapore Mediation Centre (SMC)