The Singapore Law Gazette

What to Expect of the Singapore Convention on Mediation

I was thrilled when on 23 July 2018, the news first broke to the public that a new United Nations (UN) treaty on mediation will be named after Singapore, following the recommendation to sign the treaty in Singapore at the 51^st session of the UN Commission on International Trade Law¹The Commission Session took place on 25 June to 13 July 2018 in New York.!

Subsequently, on 20 December 2018, the deal was sealed when the 73^rd session of the UN General Assembly (UNGA) in New York passed a resolution to adopt the “UN Convention on International Settlement Agreements Resulting from Mediation” (ISARM) and to name it after Singapore. The signing ceremony of the “Singapore Convention on Mediation” (SCM) will take place in Singapore on 7 August 2019.

Impact of the Singapore Convention on Mediation

Even though Singapore has another international treaty named after it (the 2006 Singapore Treaty on the Law of Trademarks) under the framework of the World Intellectual Property Organisation, a UN specialised agency, the SCM is the first UN treaty named after Singapore. As Minister for Law and for Home Affairs, Mr K. Shanmugam, SC had put it, this “puts Singapore on the map for thought leadership in international trade laws”.

Among lawyers, it is not necessary for me to rehash the merits of mediation as a dispute resolution mechanism. However, I will liken the SCM to the 1958 New York Convention for the enforcement of arbitral awards as the SCM places international mediation on an equal playing field with international arbitration by facilitating the enforcement of international settlement agreements arising from mediation.

Currently, where an international dispute is settled through mediation, parties seeking to enforce the mediated settlement will have “to enforce that settlement agreement as it would any other contract: by bringing a brand new action in the contractual counter-party’s own country”. This deters parties from resolving cross-border disputes through mediation. Additionally, requiring an aggrieved party to commerce a separate legal action, obtain a judgement on the contract and then enforce the award²The Legal Intelligencer, “The Singapore Convention on Mediation: Good News for Businesses” (9 January 2019) <https://www.law.com/thelegalintelligencer/2019/01/09/the-singapore-convention-on-mediation-good-news-for-businesses> accessed 6 June 2019 is counterintuitive since mediation was “designed, at least in part, to avoid litigation in the first place.”³Ibid

The SCM will establish a common international understanding of how enforcement can take place across jurisdictions that are contracting parties to the SCM, thereby making it easier, cheaper and faster for businesses to enforce mediation settlement agreements. We expect that cross-border trade will be improved as a result and businesses will look to Singapore as a key destination for mediation.

The SCM is definitely a major step forward for Singapore.

Why Singapore?

The late Steve Jobs once said, “Overnight success stories take a long time.”

Singapore’s success as a leading dispute resolution hub in the region – and now, global – did not happen by chance. Many good things we have put in place and many right decisions we have been collectively making prepared us for this day. In other words, it has been brewing for some time – a long time! And if I may say that, apart from our local legal talent, our international success boils down to the following key reasons:

• As an economy, we are open, well-connected, and respected. Singapore has a long-established reputation as an excellent place to conduct international business in general.⁴http://www.mas.gov.sg/Singapore-Financial-Centre/Value-Propositions/Conducive-Pro-Business-Environment.aspx It has one of the most open economies in the world, currently being party to 23 Free Trade Agreements⁵<https://www.enterprisesg.gov.sg/non-financial-assistance/for-singapore-companies/free-trade-agreements/ftas/overview#> accessed 6 June 2019 including treaties with the United States of America,⁶<https://www.enterprisesg.gov.sg/non-financial-assistance/for-singapore-companies/free-trade-agreements/ftas/singapore-ftas/ussfta> accessed 6 June 2019 China,⁷<https://www.enterprisesg.gov.sg/non-financial-assistance/for-singapore-companies/free-trade-agreements/ftas/singapore-ftas/csfta> accessed 6 June 2019 and India.⁸https://www.enterprisesg.gov.sg/non-financial-assistance/for-singapore-companies/free-trade-agreements/ftas/singapore-ftas/aifta> accessed 6 June 2019Singapore also enjoys a stable political climate,⁹<https://www.theglobaleconomy.com/rankings/wb_political_stability/> accessed 6 June 2019 is well-connected via Changi Airport to over 400 cities in over 100 countries around the globe,¹⁰<http://www.changiairport.com/corporate/our-expertise/air-hub.html> accessed 6 June 2019 and is home to a highly skilled¹¹<https://weforum.ent.box.com/s/dari4dktg4jt2g9xo2o5pksjpatvawdb> accessed 6 June 2019 and competitive¹²<https://www.insead.edu/sites/default/files/assets/dept/globalindices/docs/GTCI-2019-Report.pdf> accessed 6 June 2019 workforce.
• As a legal jurisdiction, we are neutral, credible and have a strong rule of law. The integrity and reliability of the Singapore justice system has been confirmed by its consistently high rankings in international indices such as the Transparency International Corruption Perceptions Index¹³<https://www.transparency.org/country/SGP#> accessed 6 June 2019 and the World Justice Project Rule of Law Index.¹⁴<https://worldjusticeproject.org/sites/default/files/documents/WJP-ROLI-2018-June-Online-Edition_0.pdf> accessed 6 June 2019
• As an Alternative Dispute Resolution (ADR) hub, we have in place a robust framework. The presumption of ADR (Presumption) was introduced in an Amendment to the Practice Directions of the State Courts in 2012.¹⁵Subordinate Courts Practice Directions Amendment 2 of 2012 The introduction of the Presumption represented a culmination of a decade of court-led initiatives aimed at encouraging parties to consider ADR as early as possible and emphasizes that litigation should only be used as a last resort.¹⁶Singapore Law Gazette May 2012, page 22 Essentially, the Presumption “provides for automatic referral of all cases for ADR” ¹⁷Ibid, Page 24; parties may be eligible to opt out of ADR in some cases, but the courts have indicated that there would be cost implications if the reasons for doing so are considered unsatisfactory.¹⁸Singapore Law Gazette March 2016 In November 2017, the Mediation Act came into effect, providing a framework for the enforceability of mediated settlement agreements. Mediated agreements can be recorded as orders of Singapore’s courts, allowing parties to enforce their terms more easily.
• In terms of our legal infrastructure, we have a full suite. Our world-class institutions include the Singapore International Commercial Court¹⁹The SICC which was specifically designed to hear international commercial disputes, features an impressive line-up of international jurists, is empowered to make confidentiality orders on application of parties, and permits foreign lawyer representation should parties so choose., Singapore International Arbitration Centre²⁰The Centre is currently ranked the 3rd most preferred seat worldwide, just after London and Paris., Singapore Mediation Centre, the Singapore International Mediation Centre, the Singapore International Mediation Institute, and the Singapore International Dispute Resolution Academy.

Singapore Convention Week and the Law Society’s Involvement

In conjunction with the signing ceremony on 7 August 2019, there will be a week full of mediation-related events. As a key stakeholder, the Law Society of Singapore has been invited to be a part of the Singapore Convention Week.

We will kick-start the week of events on 5 August 2019 by co-organising a series of seminars on effective dispute management and business with the Singapore Academy of Law, Singapore Corporate Counsel Association, and Asian Business Law Institute.

Titled “The Big Deal: Managing Disputes”, and set against the context where the course of a deal rarely runs smooth, especially when big personalities, big reputations and big money is involved, we are coming together with a holistic take on what is being done so that businesses and legal industry stakeholders can work effectively to manage and resolve disputes before, during and after deals, with a view towards preserving relationships, lowering transaction costs, promoting certainty, and creating new commercial opportunities.

Given the waves that Singapore is making with the SCM and the huge impact it will have on the future of ADR in Singapore, we want you to be a part of this success and of the future. Click here to find out more about the event and to register.