The Singapore Convention : Decisions, Decisions

Bill Wood discusses the choice between opt-in and opt-out systems under the Singapore Convention

There is no mistaking the general excitement that has surrounded the recent signing of the Singapore Convention[1]. It is seen as recognition that mediation has now achieved such maturity and acceptance internationally that it deserves the status that arbitration has enjoyed since the New York Convention of 1959.

The place of signing is significant too. Singapore has again enthusiastically grasped the opportunity to brand itself as a new and dynamic international dispute resolution centre.

The Convention has been supported by the signatures of 46  countries including China and the United States. The UK along with the rest of the EU has remained aloof thus far. Indeed the Times recently speculated as to whether our abstention will diminish London’s standing as a forum for international disputes and damage trade generally [2].

Of course it is important to remember that no country has yet ratified.  When the moment of ratification comes countries will have an important choice to make. Article 8 of the Convention allows ratifying countries either to bring the Convention into law as an opt-in regime (where the parties expressly elect to submit to  the enforcement rules when settling) or as an opt-out (where the default setting is that the enforcement rules do apply). Paragraph 1(b) runs as follows:

            “1.  A party to the Convention may declare that

                        … (b) it shall apply this Convention only to the extent that the parties to the settlement agreement have agreed to the application of the Convention.”

There was understandably lengthy discussion of this clause during the drafting of the Convention and it is going to be an absolutely critical choice. Many of us have wondered whether at the moment of concluding a settlement parties will find opting-in an easy matter to agree. One assumes that in the average money dispute the paying party may not be enthusiastic about agreeing to grant his opponent supercharged enforcement powers.

It is easy to forget that because of Article 6 of the EU Mediation Directive EU countries have had similar enforcement  processes available for cross-border mediation settlements for some years now. Where a settlement “results from mediation” the parties, if they all agree, can apply to the court for a Mediation Settlement  Enforcement Order or MSEO[3]. When granted by the court this gives the settlement the enforcement statues of a judgment. Like the Singapore Convention it copes with situation  where proceedings have not yet been started and the parties do not have the option of enshrining their settlement in a consent award or judgment . (Unlike the Singapore Convention an application to the court is needed.)

This provision passed into law in 2011  but, to the best of my knowledge at least, it has disappeared utterly without trace. I have not heard it raised as an issue or  discussed by lawyers or  colleagues at any point in the eight years of its life to date and as far as I am aware no application for an MSEO has ever been made[4]. So much for an opt-in system.

Is the lesson of the MSEO  experience  that  Singapore Convention countries should choose an opt-out  system?

Or is another possible lesson that enforcement is not actually a major consideration and that concerns about enforcement are not in fact a significant brake on the advance of international mediation at all.

Parties mediating disputes post-litigation in England and Wales routinely agree “Tomlin orders”, consent orders embodying the settlement.  Pre-litigation parties cannot do so. Parties should not feel they have to start proceedings to get an enforceable deal. All perfectly rational.

But  in the long list of reasons that over the years I have heard given for parties being reluctant to move to mediation (“I don’t wish to appear weak”, “I don’t know what mediation is”, “Can I trust the mediator/the opposition to respect confidentiality” , “I don’t wish to appear weak”) I have to say I cannot remember hearing  enforcement worries mentioned.

The vast majority of commercial disputes whether domestic or international end in settlement. There is nothing about a mediated settlement as distinct from a negotiated settlement that makes it intrinsically more vulnerable to being disregarded. Where the parties in the negotiations which I facilitate have concerns about the other side’s willingness or ability to perform  that can be policed in the agreement. For example if a party has spent the mediation complaining of poverty and arguing that the case should settle because “there will be nothing left at the end of a trial” then the solution may be to make performance a condition subsequent to the agreement. If the defendant doesn’t pay the claimant’s claim revives.

The Singapore Convention is a welcome celebration of the arrival of mediation as a mature participant on the world stage and a  welcome celebration of Singapore itself. But as one observer wittily  put it: “I’m a huge fan of the Singapore convention, it’s all the stuff about enforcement I am not sure about ”.

How much practical effect the Convention is going to have will clearly  depend on choices yet to be made by the countries who ratify and the choices subsequently made by the parties themselves.


[1] The UN Convention on International Settlement Agreements resulting from Mediation.

[2] “Could the UK’s absence from the Singapore convention harm its post-Brexit prospects?” Times, 5th September 2019.

[3] CPR 78.24.

[4] If you have a drawer full of MSEOs in your litigation department please let me know; I will be delighted to publish a correction.

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