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SINGAPORE CONVENTION ON MEDIATION: RULES & CHALLENGES

Anwesh Patnaik

First Year, B.A. LLB (Hons.), National Law Institute University, Bhopal.

INTRODUCTION

The Singapore Convention formally known as the United Nation Convention on International Settlement Agreements Resulting from Mediation entered into force on 12 September 2020 with 53 signatories and 6 ratifications. It facilitates the enforcement of settlement agreements arrived through mediation in a manner that is similar to the Convention on Recognition and Enforcement of Foreign Arbitral Award,1958. Currently, negotiated mediation agreements are enforceable only as a contract and a civil suit is filed for its compliance, the Singapore Convention will authorise the court to enforce the mediated arrangement directly. This establishes a stable and harmonised procedural basis for the invocation and compliance of the settlement agreement. A settlement arrangement to be considered within the framework of the convention has to be reached by negotiations, should be agreed in writing, an international commercial dispute should be resolved and the mediator should not have the right to force a solution on the parties.

The convention can be seen as a game changer and will be instrumental in encouraging mediation and fostering cross-border trade. The International Dispute Resolution Survey 2020 undertaken by SIDRA points out that parties to a trade agreement are unlikely to use negotiations to resolve conflicts because of the uncertainties inherent in implementation. The Singapore Convention would reduce the confusion and reluctance on the part of the parties over the mediation of cross-border transactions. However, the convention is not without ambiguity and certain provisions have been considered as problematic by mediators.

APPLICATION AND EXCLUSION

Article 1 of the Convention states that the terms of the Convention shall apply to a written dispute settlement arrangement arising from mediation and concluded by the parties to resolve a corporate dispute. Article 1 also covers those subjects and agreements which fall beyond the scope of the Convention, including matters relating to labour, inheritance and family law and agreements concluded by the customer for personal or household purposes.[1] Settlement arrangements enforceable as decisions of court or arbitral awards are exempt from the application of the Convention in order to prevent any interference with current conventions. In addition, pursuant to Article 8(1)(a) the Member States may decide that the Convention may extend only to the degree that the parties to the negotiated settlement authorise it to be applicable.[2]

It is noteworthy to mention that, unlike most prior international conventions, the adoption of the Singapore Convention is not limited exclusively to Member States. There is no nationality in settlement agreements because they are enforceable as long as they are international and are the product of mediation. The location of the mediation or the point of origin is irrelevant.

ENFORCEMENT AND REFUSAL OF RELIEFS

Article 4 of the Convention provides that a party claiming relief must provide a signed mediated settlement agreement along with proof that the agreement was the product of mediation.[3] This clause is controversial because it means a change in the current nature of mediation. The essence of mediation is secrecy, which also ensures that the parties cannot rely in the mediator to become a witness in a case related to the mediation process. The incorporation of such a Clause in the convention could create apprehensions with respect to the objectivity of the mediator and his/her perceived role in the enforcement of the mediated settlement. It is reasonable that the Convention does not deem the mediator’s signature of the contract to be similar to the evidence offered in a court of law, but that the clause also creates an uncertainty with respect to a substantive question, in certain situations the parties do not agree to conclude the conflict on the day of mediation but may often settle the dispute in the time after mediation without the help of the mediator, but the Convention does not mention if such a post-mediation resolution will be enforced if the dispute has been settled in the mediation process, with only peripheral issues being considered on the following days. No clause has been provided in the Convention for creating a substantial relation between the settlement arrangement and the mediation.

The reasons for denial of relief are laid out in Article 5 and are classified into three groups.[4] In addition, the court can refuse to provide relief on the basis that the settlement agreement is contrary to public policy or that the subject matter cannot be resolved by mediation. As far as international agreements are concerned, the foreign court may have to consider the subject matter and the conditions explicitly and, depending on the legal regime of the implementation State, the court may accept the arrangement within a legal context that is different from the one under which the agreement is drawn up. Negotiating partners would also have to take into account the interpretation of international courts when drawing up a mediation deal. This requires the incorporation of greater information and explanation rather than the presumption of expertise on the part of the compliance authorities. It adds a new dimension of compliance on the parties.

FALLACIES AND AMBIGUITIES

Perhaps the most problematic provision in the Convention is Article 5.1(e) that provides that an authority can refuse to provide relief to a party if the other party is able to prove that there was a serious breach of conduct by the mediator.[5] This provision is of special interest for the counsels as they can relieve their client of the performance by focusing on the conduct of the mediator. The convention at the same time fails to provide what standards are applicable to the mediator, this combined with the confidentiality of the mediator would make ascertainment of unfairness difficult. The conduct of the mediator will be open to scrutiny and this could potentially hamper the process as the mediator might become over concerned with his own conduct or the process rather than help the parties resolve the dispute, any advice or suggestion by the mediator to a party might be seen as unfair by the other party. The fact that mediation is a voluntary process and the mediator cannot ask for any document makes partiality of the mediator a rare instance. This provision therefore creates unnecessary confusion and problems with the Convention.

Article 8 of the Convention contains the reservation provisions that can dilute the applicability and effectiveness to a significant extent.  It allows a signatory to declare that the convention will not apply in agreements in which it is a party or its entities are a party. This becomes problematic especially in the case of infrastructure agreements such as the BRI or the International North-South Transit Corridor where at least one of the parties is the Government or its entity. A declaration could potentially prevent the enforcement of the settlement against another state that is signatory to the convention, it possesses a risk to the enforceability of the mediated settlement agreement.

There exist apprehensions amongst the mediators to sign an agreement certifying that the mediation took place under his/her supervision. This is to avoid the possibility of being summoned as a witness in a court and to maintain confidentiality. In an English case, the mediator was a witness for a tax dispute, and the judge held the evidence of the mediator to be unreliable.[6] This showcases what will happen if the mediator is called as a witness and in the absence of any oversight institution governing the process of mediation, the parties may not be able to acquire a signed document from the mediator. This could withhold the relief that the party is entitled to get as the necessary ingredients of enforcement under Article 4 of the Convention will not be satisfied. The onus therefore falls on the parties to ensure that the mediator is willing to sign the settlement agreement and certify the process before appointing that person to oversee the mediation.

CONCLUSION

The Convention is a significant turning point in the practice of mediation and will go a long way in the promotion of cross-border mediation. The success of the convention, however, is dependent on the practice and implementation by the States and other stakeholders. The Convention is certainly not devoid of fallacies and ambiguities especially when it comes to enforcement of the settlement agreement, refusal to grant relief by the implementing state and the freedom of the signatory to reserve the application of the convention. The Convention changes the role of the mediator from an impartial facilitator to a witness of the process and this could result in a shift in the prevalent practices. Nevertheless, the Convention is a feasible risk control framework that is both flexible as well as affordable for the parties.


 

[1] United Nation Convention on International Settlement Agreements Resulting from Mediation, New York, 20 December 2018, p. 3, available from https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/EN/Texts/UNCITRAL/Arbitration/mediation_convention_v1900316_eng.pdf (hereinafter UNCISARM)

[2] Id. at 7.

[3] UNCISARM, Supra Note 1, at 5.

[4] Id. at 6.

[5] UNCISARM, supra note 2, at 6.

[6] The Serpentine Trust Limited v. HMRC., 535 UKFTT 412,481 (2018)

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