Mediation is a powerful process – and is a valuable mechanism for resolving disputes, particularly international disputes. But what happens when parties fall out after the mediation, and enforcement becomes an issue. At the moment the parties are left to enforce their mediation agreement through the national courts, with all the challenges that that brings. Discussions and negotiation have been going on for a long time to try and resolve this issue.

In December 2018 the United Nations General Assembly passed a resolution to adopt the United Nations Convention on International Settlement Agreements Resulting from Mediation, and authorised a signing ceremony for the Convention to be held in Singapore. The Convention, known as the "Singapore Convention on Mediation", is open for signature on 7 August 2019, in Singapore.

The Convention on Mediation seeks to facilitate international trade by allowing the enforcement of cross-border mediated settlement agreements in signatory countries.

What does it apply to?

The Singapore Convention on Mediation applies to international settlement agreements resulting from mediation, concluded by parties to resolve a commercial dispute. It provides a uniform and efficient framework for the enforcement of international settlement agreements resulting from mediation and for allowing parties to invoke such agreements.

Mediation is defined in Article 3. It states:

"3. "Mediation" means a process, irrespective of the expression used or the basis upon which the process is carried out, whereby parties attempt to reach an amicable settlement of their dispute with the assistance of a third person or persons ("the mediator") lacking the authority to impose a solution upon the parties to the dispute."

This is an important definition as it looks at substance rather than form. Even if there is no mediation agreement, on the face of it a settlement reached with the assistance of a third party could be enforced under the convention.

Promoting mediation

As well as facilitating international trade, the Singapore Convention was designed to promote mediation as an alternative and effective method of resolving trade disputes. Fundamental to the Convention is that it ensures that a settlement becomes binding and enforceable in accordance with a simplified and streamlined procedure, similar to arbitration.

Arbitration is an attractive process for resolving international disputes, not least due to the relatively straightforward mechanisms for enforcing arbitral awards. By contrast settlement agreements, concluded after mediation, can face complex and difficult enforcement processes. The introduction of the Singapore Convention addresses that deficit.

Challenging enforcement

Similar to the limited grounds for refusal to enforce an arbitral award under the New York Convention, there are limited grounds for refusing to grant relief under the Singapore Convention. Article 5 provides that relief might be refused if:

"(a) A party to the settlement agreement was under some incapacity;
(b) The settlement agreement sought to be relied upon:
(i) Is null and void, inoperative or incapable of being performed under the law to which the parties have validly subjected it ...;
(ii) Is not binding, or is not final, according to its terms;
(iii) Has been subsequently modified;
(c) The obligations in the settlement agreement:
(i) Have been performed; or
(ii) Are not clear or comprehensible;
(d) Granting relief would be contrary to the terms of the settlement agreement;
(e) There was a serious breach by the mediator of standards applicable to the mediator or the mediation without which breach that party would not have entered into the settlement agreement; or
(f) There was a failure by the mediator to disclose to the parties circumstances that raise justifiable doubts as to the mediator's impartiality or independence and such failure to disclose had a material impact or undue influence on a party without which failure that party would not have entered into the settlement agreement."

Grounds (e) and (f) could give rise to interesting debate about the role of the mediator and how the mediator should conduct him or herself. Some mediators are relatively passive, some are interventionist. Some press the parties to see the challenges in their case and so might be suspected of advocating the other side's position. Those grounds of challenge also raise the prospect of something that all mediators do their very best to avoid – being drawn into court proceedings about the mediation. It will be interesting to see how the courts, and mediators, deal with that issue.

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.