Start of main content

The Singapore Mediation Convention: clear momentum of international obligation agreements

| News | Litigation

Iñigo Rodríguez-Sastre and María Antonia Pérez analyse the Convention that facilitates international trade and promotes mediation for the settlement of cross-border commercial disputes.

The United Nations Convention on International Mediation Settlement Agreements, approved by the United Nations General Assembly in New York in December 2018, was finally signed on 7 August, and called the Singapore Convention on Mediation as this is the place where it was signed.

According to the Note of the Secretary General of the United Nations, the Singapore Convention was born with the objective of facilitating international trade and promoting the use of mediation for the settlement of cross-border commercial disputes.

To date, the mediation did not have regulations that facilitated the recognition and execution of their international transactional agreements, which obliged the parties, in case of non-compliance, to resort to the eventual clause of resolution of controversies agreed in the respective agreement in order to obtain its implementation.

That is, after undergoing mediation, the injured party in the breach of the agreement had to resort to arbitration or ordinary jurisdiction to enforce the agreement reached, which, in addition to entailing additional costs, discouraged the use of mediation as a method of resolving international disputes.

Like its elder sister - the June 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards - the Singapore Convention provides the parties with a uniform and efficient framework for the enforcement of international settlement agreements resulting from mediation. In other words, it solves the executive problem of these agreements, giving them binding force and allowing them to be recognized and enforced through a relatively simple procedure.

As regards its scope of application, the Singapore Convention applies to any agreement resulting from mediation concluded in writing by the parties for the purpose of settling an international commercial dispute, excluding agreements entered into with consumers for personal, family or household purposes, as well as those relating to family law, inheritance and employment law.

In order to avoid overlaps, the Singapore Convention does not apply to international agreements either: (i) which have been approved by a judicial body or concluded in the course of proceedings before a judicial body; (ii) which can be enforced as a judgment in the State of that judicial body; or (iii) which have been incorporated into an arbitral award and are enforceable as such.

With respect to the formalities to be met in order to initiate the process, the party requesting executive measures must submit to the competent authority the settlement agreement signed by the parties and the mediator, as well as evidence that such agreement was reached as a result of a mediation process.

Likewise, when the Convention does not establish any requirement, the recognition and execution of the transactional agreements shall be carried out by each signatory Country in accordance with its own procedural rules.

Although the mechanism established by the Singapore Convention is articulated to encourage the granting of recognition and enforcement measures in a comprehensive manner, Article 5 contains a closed list of grounds based on which the competent authority may refuse to grant the requested measures.

In this sense, in addition to those related to its scope of application or the breach of public order, the grounds for refusing to grant measures can be grouped into three fundamental categories: (i) those relating to the parties and their incapacity; (ii) the settlement agreement; that it is invalid, not final nor binding, that it has subsequently been modified or that the obligations stipulated in it have been fulfilled, are not clear or understandable or that its granting is contrary to the terms of the settlement agreement; and, (iii) in relation to mediation, defects in the procedure or in the independence and impartiality of the mediator.

As of the date of this article, the Singapore Convention has a total of 46 signatories, including the United States and China.

The possibility of accession is open to all Sovereign States, as well as to regional economic integration organizations constituted by those States, the latter being required, at the time of signature, to make a declaration specifying the matters governed by the Convention in respect of which competence has been transferred to the organization by their member States.

Spain has not yet acceded to the Singapore Convention, but since it is an instrument that will undoubtedly favour the development of international commercial transactions, encouraging the non-contentious resolution of potential disagreements, it would not make sense to rule out its acceptance.

Time will tell if its success is as resounding as that of the 1958 New York Convention, which turned 60 last year. We believe it will.

You can see the article in Expansión.

End of main content