The United Nations Convention on International Settlement Agreements Resulting from Mediation

This will provide for the enforcement of mediated settlement agreements across country borders. It is being seen as the counterpart to the New York Arbitration Convention.

Aims

Whilst in practice, non-compliance rates are low (given the nature of mediation, the resolving of a dispute through negotiation to reach a mutually-accepted agreement, parties are then unlikely to not follow through with an agreement that they themselves have put time and effort into), in a survey conducted in 2014 by the International Mediation Institute, 93% of respondents were found to be more likely to engage in mediation with parties from another country if there were a way of enforcing mediation settlement rights.

The Singapore Convention aims to lend more legitimacy to the process of mediation, but more importantly aims to make the process more efficient. Currently, if settlement of a mediation requires enforcement, this can involve court proceedings in one country which must then be enforced in another jurisdiction, if possible; or arbitration, followed by an arbitral award which then must be enforced in the country where the assets are located. All this is costly and time-consuming, and may discourage parties from engaging in a mediation process at the outset.

Key features:

The key feature of the Convention is that it refers only to international commercial disputes.

The Convention has been designed as a catch-all, covering all mediation-type resolutions regardless of whether it is titled specifically 'mediation' or not. Similarly, the mediation does not have to be carried out by an accredited mediator to count. As long as the proceedings fall within the Convention's broad definition of a mediation, the parties may apply for relief. Proof that the proceedings were a mediation may be given through signatures from both parties, or from the mediator.

One particular feature of the Singapore Convention is that signatory countries are able to specify that the Convention will only apply if both parties have agreed to it. This provides the option of opting out of the Convention.

How will it be enforced?

The courts of signatory countries are expected to handle enforcement of settlement agreements – there will be direct enforcement of cross border settlements.

When does it come into force?

The Singapore Convention will come into force six months after three countries have ratified, accepted or acceded to the Convention. Given that 46 countries, including the US and China, signed on the first day (Aug 7th) alone, this is extremely likely. Notable current absentees are the UK and European Union.