Singapore Convention on Mediation comes into force

In News:

• The Singapore Convention on Mediation came into force on 12th September, which marks a significant development in international commercial dispute resolution through mediation.

 

About: Mediation as a tool for dispute resolution

• Mediation has always been recognised as a tool for dispute resolution. It is a way to resolve disagreements by minimising conflicts, as it encourages the two parties to reach an agreement by finding common solutions.
• Often, corporates find themselves in a situation where they have multiple dealings with one another, and do not want to spoil the relationship due to a disagreement in a particular transaction.
• In such situations mediation is the best tool for dispute resolutions, as it helps to preserve business relationships.
• In commercial disputes, mediation often proves to be the cheapest, quickest and the most confidential mode for dispute resolution.
• It also gives the parties greater control over the outcome, leading to a commercially balanced resolution.

 

About: Singapore Convention on Mediation

Background:

• Until the introduction of the Singapore Convention a challenge to the use of mediation was the lack of an efficient framework for cross-border enforcement of settlement agreements resulting from mediation.
• It was in response to this need that the Singapore Convention was developed and adopted by the United Nations.

Evolution:

• Also known as the United Nations Convention on International Settlement Agreements Resulting from Mediation, this is the first UN treaty to be named after Singapore.
• The United Nations General Assembly had adopted the Convention in December 2018, and the Convention opened for signature in August, 2019. As on September 1, 2020, the Convention has 53 signatories, including India, China and the U.S.
• Six countries have ratified the Convention till now, which include, Ecuador, Singapore, Fiji, Qatar, Saudi Arabia and Belarus.

Singapore Convention on Mediation:

• The Singapore Convention on Mediation applies to international settlement agreements resulting from mediation, concluded by parties to resolve a commercial dispute.
• The primary goals of the Convention are:
  • To facilitate international trade; and
  • To promote the use of mediation for the resolution of cross-border commercial disputes.
• It ensures that a settlement reached by parties through mediation becomes binding and allows for direct enforcement of mediated settlement agreements.
• With the Convention in force, businesses seeking enforcement of a mediated settlement agreement across borders can do so by applying directly to the courts of countries that have signed and ratified the treaty.
• The Singapore Convention can only be applicable in cases of an international commercial dispute, and specifically excludes disputes arising from personal, family, inheritance or employment matters.
• The convention also does not apply to settlement agreements that have been approved by a court or concluded in the course of court proceedings, and are to be enforced as a judgment.

 

News Summary:

• The Singapore Convention on Mediation has come into force.

Impact

• Businesses in India and around the world will now have greater certainty in resolving cross-border disputes through mediation.
• Thus, the Convention significantly strengthens the international dispute resolution enforcement framework.
• The simplified enforcement framework under the Convention will lead to savings in time and legal costs, which is important for businesses in times of uncertainty, such as during the current COVID-19 pandemic.
• The relative peaceful nature of mediation as a process of dispute resolution will also help to preserve commercial relationships despite the disputes.
• It will boost India’s ease of doing business status and facilitate international trade and commerce.