Economy

Singapore Convention on Mediation enters into force

Our Bureau New Delhi | Updated on September 12, 2020 Published on September 12, 2020

Convention to boost India’s ‘ease of doing business’ credentials by enabling swift mediated settlements of corporate disputes

Singapore Convention on Mediation (Convention) has entered into force, marking a significant development in international commercial dispute resolution.

Businesses in India and around the world will now have greater certainty in resolving cross-border disputes through mediation, as the Convention provides a more effective means for mediated outcomes to be enforced.

The Convention, also known as the United Nations (UN) Convention on International Settlement Agreements Resulting from Mediation, is the first UN treaty to be named after Singapore.

As of September 1, 2020, the Convention has 53 signatories, including India, China, and the United States. Ecuador is the most recent country to ratify the Convention, joining Singapore, Fiji, Qatar, Saudi Arabia and Belarus, and bringing the number of countries who have ratified the Convention to six.

With the Convention, businesses can rely on mediation as a dispute resolution option for their cross-border transactions, with greater certainty and assurance that their mediated outcomes are enforceable. The conciliatory nature of mediation also helps to preserve commercial relationships despite the disputes.

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, instead of having to enforce the settlement agreement as a contract in accordance with each country’s domestic process.

The harmonised and simplified enforcement framework under the Convention translates to savings in time and legal costs, which is especially important for businesses in times of uncertainty, such as during the current COVID-19 pandemic.

Minister for Home Affairs and Law, Singapore K Shanmugam said, “The Convention’s entry into force is a significant milestone, as it further strengthens the international dispute resolution enforcement framework. This benefits businesses by providing greater certainty in resolving cross-border commercial disputes, ultimately facilitating international trade and commerce.”

Anna Joubin-Bret, Secretary of the United Nations Commission on International Trade Law, says, “With the Convention successfully entered into force, we look forward to it bringing certainty and stability to the international framework on mediation, and contributing to the Sustainable Development Goals, including the goal of promoting peaceful and inclusive societies for sustainable development.”

As adoption of the Convention becomes more prevalent globally, it will also strengthen Singapore’s position as an international dispute resolution centre and better serve the needs of international businesses that use Singapore as a base for their international commercial transactions.

Over the years, Singapore has set up various institutions, including the Singapore International Arbitration Centre, Singapore International Mediation Centre, and Singapore International Commercial Court to provide a full suite of dispute resolution services for international commercial parties to resolve their disputes in Singapore.

The Convention opened for signature at a signing ceremony on August 7, 2019, and 46 countries signed the Convention. The number of first-day signatories was among the highest for any UN trade convention, reflecting international recognition and support of the Convention’s benefits.

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Published on September 12, 2020
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