Singapore: Singapore Convention - A Boost To Mediation, And Singapore As A Premier Dispute Resolution Destination

Last Updated: 27 August 2019
Article by Sharon Lin and Angus Neo

7 August 2019 was a historic moment for Singapore. 46 countries signed the Singapore Convention, more formally known as the United Nations Convention on International Settlement Agreements Resulting from Mediation –a record number of first-day signatories for a UN trade convention.

The signatories include the world's two largest economies, China and the US, as well as major Asian economies, India, South Korea and Saudi Arabia.

Better enforceability of the mediated agreement

The aim of the Singapore Convention is to provide an internationally uniform framework to recognise and enforce mediated settlement agreements, similar to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) for international arbitration awards. By providing a stronger enforcement mechanism for mediated settlement agreements, the Singapore Convention will elevate the importance and effectiveness of mediation globally and provide another attractive option for businesses in resolving international commercial disputes.

According to a 2019 study by Ipsos and Singapore Academy of Law, enforceability is the biggest factor for legal professionals in their choice of dispute resolution options. Without an effective enforcement mechanism, there is no assurance that either party will honour their side of the bargain or satisfy any judgment or award against them. Traditionally, settlement agreements are legally treated as contracts and a party must first sue for breach of contract in order to obtain an enforceable judgment/award. In Singapore, subject to the requirements under the Mediation Act, parties can convert their mediated agreement immediately into an enforceable court order.

The New York Convention coupled with decades of jurisprudence has greatly promulgated the usage of international arbitration worldwide. A large majority of arbitral awards are complied with little need to resort to enforcement measures since the straightforward resort to enforcement is simply there. The New York Convention started with 10 signatories in 1958 and now boasts 160 signatories. With the success of the New York Convention, the reception for the Singapore Convention certainly looks promising. The Singapore Convention will similarly grant a greater level of expectation and efficiency with regards to mediated settlement agreements.

Better for businesses and investments

With its non-adversarial and relationship-preserving process, mediation could very well be the alternative dispute resolution mechanism of choice for commercial parties. Considering the enabling legal framework put in place by the Singapore Convention, being a party to the Singapore Convention signifies a greater commitment to international trade and uniform best practices. A Singapore Convention signatory would be a good place to start for businesses looking to explore investment and business opportunities overseas.

A major issue for transnational businesses and investments is the unfamiliar and cumbersome cross-border dispute resolution process. The immediate problems include unpaid accounts, missed deadlines, and increased costs from rectification or changes. Unresolved disputes can also lead to the potential loss of profits from the breakdown of business relationships and the diversion of resources away from further business development. A cumbersome process would involve high legal costs and expenses. An unfamiliar dispute resolution system will also deter businesses and investors from entering the country. If the dispute resolution process can be simplified, streamlined and made uniform across borders, the reduced costs required to resolve disputes would create a robust and more attractive business climate.

The Singapore Convention also complements Singapore’s plans to accelerate business and infrastructure development in the region, such as through Enterprise Singapore’s initiative Infrastructure Asia. The Asian Development Bank estimates that Asia requires US$1.7 trillion in investment into infrastructure annually. The Belt and Road Initiative involves infrastructure development across 152 countries and has stemmed various projects in ports, railways, highways, aviation, power and telecommunications. To promote infrastructure and other projects in Asia, there is a need to put in place a business-friendly legal and regulatory framework for public-private partnerships.

With so many ambitious and promising Asian projects on the horizon, the private sector will definitely have plenty of opportunities to get involved. To those mindful of the past Asian financial crisis, a strong international dispute resolution mechanism can allay the risk-averse and rebuild trust in the system. Ideally this should lead to better private sector funding and usher in a new age of economic development in the region.

When will the Singapore Convention apply?

The Singapore Convention applies to settlement agreements that result from mediations to resolve international commercial disputes. The following criteria must be met for the purposes of recognition and enforcement of the settlement agreement between the signatory states:

  • The agreement is "international", meaning either (i) at least two parties have their place of business in different countries, or (ii) the country where the settlement agreement is to be performed or is most closely connected to the agreement, is different to the parties' place of business.
  • The agreement is signed by the parties and "resulted from mediation". Mediation is defined broadly as a process whereby parties attempt to reach an amicable settlement of their dispute with the assistance of a third-party (mediator) lacking the authority to impose a solution upon either party to the dispute.
  • The agreement does not fall within the list of excluded agreements:
    (i) arising from transactions engaged by one of the parties for personal, family or household purposes;
    (ii) relating to family, inheritance or employment law;
    (iii) which have been approved by a court or concluded in the course of proceedings before a court and are enforceable as a judgment in a court; and
    (iv) recorded and enforceable as an arbitral award.
  • None of the exhaustive list of grounds for refusing relief applies:
    (i) A party to the agreement was under incapacity;
    (ii) Granting relief is contrary to public policy;
    (iii) Subject matter of dispute is not capable of settlement by mediation;
    (iv) Settlement agreement is null and void, inoperative, incapable of being performed, not binding, not final, not clear or comprehensible;
    (v) Serious breach by the mediator of standards applicable to the mediator or the mediation;
    (vi) Failure by the mediator to disclose circumstances relevant to the mediator's impartiality or independence.

What's next?

Countries that have signed will have to go through a domestic process to ratify the Convention. The Convention will only formally come into effect after the ratification process has been completed by at least three signatory states. This is likely to be achieved, given that 46 countries signed on the first day it opened for signatures.

While its full impact, particularly whether it will be as significant as the New York Convention, remains to be seen, but strong early uptake is a very promising indicator.

Consistently ranked amongst the top least corrupt country in the Corruption Perceptions Index and the only Asian country within the top ten, Singapore is well-poised to service businesses in the Asian region and beyond. Singapore law is well-established, commercially-sensitive, has its roots in English law, and will be familiar to any common law practitioner. Singapore’s unique position as the crossroads between the East and West, and its proficient dispute resolution institutions, make it the ideal location to base businesses and resolve disputes. The Singapore Convention will further reinforce Singapore as the premier hub for dispute resolution in Asia.

A version of this article first appeared in The Business Times on 30 July 2019

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions