Introduction
On 7 August 2019, Singapore hosted the signing of the United Nations (UN) Convention on International Settlement Agreements Resulting from Mediation. Known as the Singapore Convention (or the Singapore Mediation Convention), it aims to facilitate a harmonised and orderly system by which mediated settlement agreements can be enforced across borders. In our modern inter-connected world, this offers another way to ensure that what is settled, or to be settled, amicably, has real teeth.
In this article, we discuss the significance of the Singapore Convention in terms of its practical impact on our dispute resolution practice, as well as its place in Singapore's aspiration to establish itself as an international dispute resolution hub.
Developing the Mediation Scene in Singapore
Mediation is not new-fangled "disruption" technology. For as long as there were village and feudal elders, there was mediation. That said, mediation as a form of alternate dispute resolution (ADR) in Singapore has developed considerably since the 1990s. Supported by the Singapore government and judiciary, Singapore embarked on efforts to revitalise mediation and make it easily accessible. Mediation has since been institutionalised in Court processes, such as through compulsory mediation schemes in the Family Justice Courts and the introduction of the Alternative Dispute Resolution process in the State Courts. Parties litigating in the Singapore High Court will be very familiar with the usual letter from the Singapore Mediation Centre (SMC).
Singapore has also established key mediation institutes in the process: first by launching the SMC on 8 August 1997, and then the Singapore International Mediation Centre (SIMC) and Singapore International Mediation Institute (SIMI) in 2014. The panel of mediators for both SMC and SIMC include Singapore and international luminaries in the dispute space.
The law in Singapore has also developed to accommodate the mediation process – one clear example is the introduction of the Mediation Act and its subsidiary legislation, which entered into force on 1 November 2017, even before the inaugural signing of the Singapore Mediation Convention in 2019. Further, judicial attitudes are positive towards the recognition and enforcement of multi-tiered dispute resolution clauses which usually include mediation as a pre-condition before arbitration or litigation can be commenced. Consider, for instance, the case of International Research Corp PLC v Lufthansa Systems Asia Pacific Pte Ltd and another [2014] 1 SLR 130 (CA), in which the Court of Appeal definitively held that "where the parties have clearly contracted for a specific set of dispute resolution procedures as preconditions for arbitration, those preconditions must be fulfilled" (emphasis in underline added).
Mediation: not as popular?
The above being said, mediation does not receive quite as much attention as it should, compared to litigation (the traditional route) or arbitration (another form of ADR). Undoubtedly, mediation is beneficial for various reasons: it is a practical option for those who wish to save time and costs, and also for those who wish to resolve their disputes privately and amicably; and to move forward with a common interest and to preserve relationships.
However, some may perceive mediation as less effective, binding, and enforceable compared to litigation or arbitration.
The Singapore Mediation Act deals with this to some extent by (i) permitting parties to apply to court to stay proceedings relating to a mediation agreement so long as certain requirements are satisfied; and (ii) allowing a mediated settlement agreement to be, by consent, recorded as an order of court. The same rules relating to the enforcement of Singapore court judgments would then apply – potentially, the mediation agreement would then be enforceable by way of the Reciprocal Enforcement of Foreign Judgments (Amendment) Act, (REFJA (Amendment) Act) which came into operation on 3 October 2019 (the Reciprocal Enforcement of Commonwealth Judgments (Repeal) Act was gazetted on 1 October 2019 and is awaiting to come into force) (RECJA (Repeal) Act). Similarly applicable would be the Hague Convention on Choice of Court Agreements, which was ratified on 2 June 2016 and came into force on 1 October 2016 with the Singapore Parliament's passing of the Choice of Court Agreements Act.
The Singapore Convention
The Singapore Convention was first adopted by consensus by the United Nations General Assembly in December 2018, in response to the need for a framework which could handle the cross-border enforcement of international settlement agreements resulting from mediation.
The Convention, which applies to international settlement agreements resulting from mediation concluded by parties to resolve a commercial dispute, allows a party seeking enforcement of a settlement agreement to apply directly to the courts of the State where the assets are located to seek relief. To avoid overlap, the Convention does not apply to agreements which have been made enforceable as a court judgment or arbitral award. The Convention is further inapplicable to agreements concluded for personal, family or household purposes, or relating to family, inheritance or employment law.
Forty six (46) States signed the Singapore Convention on 7 August 2019 when the convention first opened for signatures, indicating their intention to ratify. On the same date, Singapore also signed a Memorandum of Understanding with the UN for the setting up of the UNCITRAL Academy which will organize future instalments of the Singapore Convention Conference. Since then, five more nations – Armenia, Chad, Ecuador, Gabon and Guinea-Bissau – have signed up to the Singapore Convention, and the next Singapore Mediation Conference has been scheduled to take place on 1 September 2020.
As Singapore looks to become one of the first to ratify the Convention, it has taken yet another step forward by introducing the Singapore Convention on Mediation Bill, which was tabled for its first reading by the Ministry of Law on 6 January 2020 and read a second time on 3 February 2020. The Bill seeks to implement the nation's obligations under the Singapore Convention by providing the mechanisms by which parties may take out enforcement applications.
Practical Impact of the Singapore Convention
The Singapore Convention is the first of its kind to provide a binding mechanism by which settlement agreements in mediation may be directly enforced across borders. As such, the Singapore Convention, when ratified, would provide greater certainty and give mediated settlement agreements more teeth.
The existence of a direct enforcement mechanism will hopefully encourage a shift in perspective on mediation and an acceptance of mediation as an equally viable and effective form of ADR. To this extent, the Singapore Convention is also a welcome development for businesses/businessmen, who would be free to selecting the most appropriate resolution method for their disputes without having to concern themselves with potential difficulties with enforcement, as may previously have been the case for mediation.
Singapore in particular stands to benefit, on a surface level at least, from being recognised as the host nation of the Convention. However, the effects of the Convention go beyond naming rights. Singapore, which has spent recent years building up its infrastructure to facilitate a larger and higher quality international mediation practice, is now well positioned to welcome any developments that the Convention shall bring, and shall be in a favourable position to be involved in the mediation of future disputes.
Complementing the Picture for ADR in Singapore
The emergence of the Singapore Convention ties in with Singapore's ambition to be a leading global dispute resolution hub.
Before 2018, Singapore set up various institutions to accommodate international dispute resolution practices: the Singapore International Arbitration Centre (SIAC) has been in existence since 1991, the SIMC was launched in 2014, and the Singapore International Commercial Court, a division of the High Court (SICC), joined the mix soon after on 5 January 2015.
Neutral Evaluation (NE), where an independent third party (the Neutral) hears and provides one's opinion on the case, allowing parties to understand the strengths and weaknesses of their case and to provide a binding (or non-binding) determination, depending on what the parties agree on, is another available avenue to resolve disputes in a cost- and time-efficient manner. NE is offered by the SMC, SIMC, and the Law Society of Singapore.
These different modes of dispute resolution are complementary, and the various institutions support each other to create a streamlined and cost-effective system; a sort of "fitness for purpose" to resolve disputes and manage relationships. For instance, SIAC and SIMC jointly offer the hybrid Arbitration-Mediation-Arbitration Protocol, which allows a mediated settlement agreement to be recorded as a consent arbitral award and thus be enforceable as an arbitral award in any jurisdiction that has adopted the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the 1958 New York Convention).
Singapore's preparations also included the expansion of Maxwell Chambers to include Maxwell Chambers Suites – which officially opened on 8 August 2019, and now houses INSOL International's Asia Hub as well as the Asia headquarters and case management centre of the American Arbitration Association International Centre for Dispute Resolution (AAA-ICDR).
The above "hardware" developments tie in with recent legal developments, which include amending the REFJA, repealing the RECJA, and introducing the Singapore Convention on Mediation Bill. This is to consolidate and streamline the legislative framework of enforcing foreign judgments, which is reinforced by existing Acts including the Mediation Act and International Arbitration Act. The Singapore Convention certainly complements the existing dispute resolution landscape.
Conclusion
We are quietly confident that the Singapore Convention will be a welcome development to the international community. Singapore has developed infrastructure to support what it hopes will be a healthy volume of international dispute resolution work. The ecosystem is here in Singapore with the various expert disciplines to support complex disputes, e.g. infrastructure disputes. With good fortune, Singapore is well poised to be an international dispute resolution hub.
Dentons Rodyk thanks and acknowledges Associate Nicolette Lee for her contributions to this article.
About Dentons
Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
