The Singapore Convention, formally the United Nations Convention on International Settlement Agreements Resulting from Mediation, entered into force on September 12, 2020. It offers parties the opportunity to enforce international agreements reached through mediation to settle disputes across borders. Up to now, the parties involved were dependent on voluntary compliance with the agreement reached and otherwise had to initiate enforcement through legal proceedings in the respective state of enforcement.
The Singapore Agreement has so far been signed by 53 states (as of November 2, 2020), including the economically significant USA, China, South Korea and India. A decision on the signing of European states and the question of whether the competence to sign lies with the EU or the individual member states is still pending.
The agreement concerns agreements reached through mediation in international commercial disputes in which either at least two parties are domiciled in different states, or the mediation result concerns a state that is different from the state in which the parties are domiciled. The term mediation presupposes the assistance of a third party to settle the dispute, wherein no specifications are made regarding the qualifications and powers of the mediator. Alternative dispute resolution procedures in which the third party can make non-binding proposals for a solution would be covered.
For enforcement, a settlement agreement signed by the parties and evidence that the mediation has taken place, e.g. the mediator’s signature, must be submitted. An agreement reached by electronic communication may also be used, if appropriate procedures are used to identify the parties and the mediator.
The enforcement agency may refuse enforcement if the respondent can prove that one or more of the grounds listed in the convention apply. These may, for example, be that the agreement is null and void, inoperative or incapable of being performed under the applicable law, or a breach of standards by the mediator. Furthermore, participating states may limit the application of the Convention in that it will only be applied if the participating parties have explicitly agreed to its application in the settlement agreement (opt-in).
Due to the Singapore Convention and the enforcement option it provides, international mediation can be a veritable and usually more cost-effective alternative to arbitration proceedings.
Matthias Vogt / Dr. Reta Schinkel