But what does that mean for those settling disputes in the UK and under English law? The UK has not signed the Convention so surely it has no effect?
It may do. This is because the Convention applies where two parties based in Europe mediate and the place
(i) where the settlement agreement is to be performed; or
(ii) where the subject matter of the settlement agreement is most closely connected
is in a State that has signed the Convention.
Therefore, the Singapore Convention, unlike for example the New York Convention on Enforcement of Arbitral Awards, is not based on reciprocity and can be availed by UK disputants in some circumstances even though the UK has not signed or ratified it.
Should the UK sign and ratify the Singapore Convention?
From many dispute resolution lawyers’ and mediators’ perspectives it would be a good idea if the UK were to do so. It would give enhanced rights of enforcement of a wide range of UK-related mediated settlement agreements. It would also enhance the perception of the UK as a major mediation and ADR jurisdiction.
Which countries have signed/ ratified it?
The UN Convention on International Settlement Agreements Resulting from Mediation (known as the Singapore Convention on Mediation) opened for signature on 7 August 2019 and was signed by a record breaking 46 States. As of 1 September, it has 53 signatories. The Convention came into effect six months after ratification by at least three contracting states (Singapore, Fiji, Qatar, Saudi Arabia Ecuador and Belarus have done so to date).
46 States signed the Singapore Mediation Convention, including importantly the US, China, India, Malaysia, the Philippines, Singapore and South Korea. Notably, the UK, the European Union and Australia have not yet signed the Convention. It seems that the reason why the EU has not yet signed is because a question of process as to whether individual countries or the European Union will sign remains to be resolved. In any event given Brexit the UK would now need to sign separately. There has been a short consultation by the UK government as to whether it should sign but no results issued yet…the government probably has more pressing problems on its hands…
What does the Convention provide?
The Convention’s aim is to formulate and implement an international framework for the enforcement of mediated settlements. It provides a process for the direct enforcement of cross-border settlement agreements between parties resulting from mediation. This allows the party seeking enforcement to apply directly to the courts of the State where the assets are located. The relevant authority may refuse to enforce the settlement agreement in limited circumstances.
When does it apply?
The Convention will only apply where the settlement agreement:
- is in writing;
- results from a mediation;
- is an agreement between two or more parties who have their place of business in different States; or
- the place of business of the parties to the agreement is different from either:
i. the State in which a substantial part of the obligations of the settlement agreement is performed; or
ii. the State with which the subject matter of the settlement agreement is most closely connected.
When does it not apply?
The Convention does not apply to settlement agreements:
- relating to consumer transactions nor to family, inheritance or employment law;
- that have been approved by a court or concluded in the course of proceedings before a court and that are enforceable as a judgment in the State of that court; or
- that have been recorded and are enforceable as an arbitral award.
Any tips for a lawyer going with a client to a mediation to which the Convention may apply?
Consider whether the Singapore Convention may apply to any settlement agreement that may result. If so:
- The mediator should sign the settlement agreement or a separate document to confirm that the settlement was reached through mediation;
- If a settlement is reached shortly after the main mediation session, consider reciting in the agreement it was entered into following a mediation.
This is because under the Convention the enforcing court must be satisfied the settlement agreement arose from a mediation.
- Take particular care to draft the settlement agreement so it will be easily understood by any overseas court. Make sure statutory references are made in full, for example. Spell out in detail the meaning of any legal concepts particular to English law or the common law. For example, the concept of a trust is not easily understood by a civil law jurisdiction. Also bear in mind rules on legal costs recovery vary enormously from one jurisdiction to another.
- Consider whether any aspect of the settlement agreement may not be capable of being enforced in the relevant country due to conflict with local public policy or other overriding provision. For example, an agreement under English law that is not Shariah compliant (say where interest is payable) may not be able to be enforced in a Shariah based jurisdiction. The deal may be re-structured in such a way that a similar, Shariah compliant outcome is achieved.
Does the Convention serve any broader function?
Some say the success of the Convention will largely depend on the extent to which it is accepted and ratified by States. It does in any case serve to raise the profile of mediation as a credible method of alternative dispute resolution for cross-border disputes. Has the Convention increased confidence in international mediation? Probably, although only one year in, it is probably too early to say for sure, especially given the impact of Covid-19.
How may UK Mediation Agreements be enforced internationally at the moment?
Currently, many settlement agreements can be recognised and enforced across the EU under the EU Mediation Directive. This will end on 31 December 2020 from the UK perspective when the Brexit withdrawal period finishes, unless specific legislation is negotiated (that is looking increasingly unlikely).
The use of Med Arb can according to some jurisdictions (notably Singapore and New South Wales, Australia) create a settlement in the form of an arbitral award enforceable under the New York Convention on the Recognition and Enforceability of Arbitral Awards. Med Arb is a process whereby it is agreed from the outset either
- if a mediation does not settle, the dispute is immediately determined by arbitration or
- that the settlement reached at mediation will be handed down as an arbitral award.
This approach is not considered mainstream from a UK perspective and has a number of drawbacks that are beyond the scope of this article to consider.
At the time of writing, some 160 States have signed the New York Convention.
International Mediation – what is the way forward?
A positive consequence of the pandemic is the increase in online mediations, and peoples’ appetite to use them to settle disputes. These are particularly suited to international mediations given they can be set up quickly and easily at a relatively low cost. Parties and their advisers can attend from their offices/ home or even car. All they need is a computer/ tablet or a phone and an internet connection.
International Conventions such as the Singapore Convention are a welcome adjunct further to increase confidence in international mediations. Whether the UK government signs it or not, the take up for international mediation is exponential.
As an important aside perhaps mediation communication skills could be put to good use in the UK to agree how best to deal with Covid-19 and obtain “buy in” from the British public to them. They could also come in handy in the negotiation of the UK’s Brexit from Europe. But then perhaps this purist mediator who would like mediation skills to change the world should narrow her ambitions and be content with simply carrying on with the eminently satisfying day job of assisting parties to find a solution to disputes satisfactory to all.
Rebecca Attree 6 Oct 2020