On 2 March 2023, the Ministry of Justice published the UK Government’s response (“Consultation Response”) to the consultation on the United Nations Convention on International Settlement Agreements Resulting from Mediation (New York, 2019) (the “Singapore Convention on Mediation”, or the “Convention”) concluding that “it is the right time for the UK to become a Party”.
In some measure, the Singapore Convention on Mediation seeks to replicate the success of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”).
The goal of the Singapore Convention on Mediation is to increase confidence in cross-border commercial activity by providing parties with a uniform and simple procedure for enforcing international commercial settlement agreements resulting from mediation. In the cross-border context, enforcing settlement agreements can be complex and expensive, deterring otherwise willing parties from choosing mediation to resolve their disputes: a uniform and streamlined enforcement mechanism is of critical importance in making international commercial mediation feasible. This is the need which the Convention seeks to supply.
The United Nations Commission on International Trade Law (“UNCITRAL”) negotiated and drafted the Convention and an accompanying Model Law (designed for adoption and adaptation by Signatory States wishing to implement the Convention in national law), which was subsequently adopted by the UN General Assembly under resolution 73/198 in December 2018. The following year, a signing ceremony was held in Singapore, where forty-six countries signed the Convention. To date fifty-five States have signed the Convention, of which ten countries have gone on to ratify it.
The Singapore Convention on Mediation enables a party to a settlement agreement resulting from mediation to apply to the courts of a State which is a Party to the Convention to enforce the terms of that settlement. Since Parties to the Convention are obliged to recognize and enforce such agreements, subject to specific grounds for non-enforcement, the Convention removes uncertainty from the enforcement stage and thereby makes mediation a more workable and cost-effective alternative form of dispute resolution.
The Convention does not cover settlement agreements which are enforceable as a court judgment, or those which are recorded in an arbitral award. Also outside the scope of the Convention are settlement agreements resulting from mediation in non-commercial matters such as those involving employment, inheritance, and family matters.
Due to the non-reciprocal nature of the Convention, mediated settlement agreements concluded anywhere in the world can be enforced in the courts of any one of the ten ratifying States (which subsequently become Parties to the Convention). For example, this means that as things stand a UK mediated settlement agreement could be enforced in the courts of Singapore, pursuant to its Singapore Convention on Mediation Act 2020, or those of Saudi Arabia, pursuant to its Royal Decree No (96) (2020) because both States have ratified the Convention.
Of course, practical considerations will inform whether enforcement action will be pursued in a given jurisdiction, such as whether the party against which enforcement action is being considered has assets in that jurisdiction.
The good reputation of the English courts, and its status as a world-class financial and commercial hub mean that if the UK signs and ratifies the Singapore Convention on Mediation, it is likely that English courts will enforce a good number of foreign mediated settlement agreements.
Signature and Ratification
Signatory States wishing to ratify the Convention are left to determine the procedure by which a party can seek recognition and enforcement of a covered settlement agreement before national courts (Convention Article 3(1)).
The legislative changes needed to modify UK law to comply with the conditions laid down in the Convention in its three distinct judicial jurisdictions (England and Wales, Scotland, and Northern Ireland), and modifications to civil procedure have yet to be determined. Even so, the Ministry of Justice has already indicated that the Singapore Convention on Mediation would be implemented in UK law under the terms of the Private International Law (Implementation of Agreements) Act 2020. This means that the Convention could be implemented by secondary legislation in the form of regulations in the three UK jurisdictions.
The practical implications of joining the Convention require further consideration as to the precise nature of the reforms to national laws needed to mirror the State’s international treaty commitments. Nonetheless, the decision reached in the Consultation Response is a significant step in itself.
Time will tell whether the Singapore Convention on Mediation will in fact emulate the success of the New York Convention in leading to the more widespread adoption of international commercial mediation and, separately, whether the UK Government’s objective of reinforcing the UK’s status as a hub for international commercial dispute resolution will be served by becoming a Party to the Convention.