As the Singapore Mediation Convention Enters Into Force This Week, It Is Wait-and-Watch on Its Use

By Yixian Sun

It’s a historic ADR beginning.

The 46 countries—including the United States, China, India, Japan, Israel, and Switzerland—that last year signed the United Nations Convention on International Settlement Agreements Resulting from Mediation, known best as the Singapore Mediation Convention, have been joined by seven more since August 2019.

And now, the treaty is set to go into effect.

That group of 53 will preside over the treaty’s official effectiveness date, this week, on Sept. 12.  Under the treaty’s Art. 14, when Qatar became the third nation to ratify the treaty on March 12, effectiveness takes place automatically six months afterward.

The backers will commemorate the effectiveness with an “Entry into Force Celebration” which will stream live here on Saturday: www.singaporeconvention.org/events/scm2020.

The original group signed on last September in Singapore, providing the treaty’s name, and setting the stage for ratifications and effectiveness. 

Official acceptance happened fast. The treaty, which ensures that mediation parties can take their agreements across borders and get them enforced, automatically takes effect upon ratification by three countries. 

Fiji and Singapore had signed the treaty into law in their nations on Feb. 25, which Qatar followed six months ago.  Saudi Arabia, Belarus and Ecuador also ratified the treaty this year.

For an updated status of the Convention, see at https://bit.ly/3bc4Ww3.  

The interest demonstrated with the initial signings is an impressive number compared to, for example, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, well-known in the alternative dispute resolution community as the New York Convention. That 1958 treaty had 24 signatories when it came into force.

Indeed, the world’s view toward ADR has changed fundamentally since 1958.

The Singapore Convention applies to international settlement agreements resulting from mediation and concluded in writing by parties to resolve a commercial dispute. State parties to the Convention undertake to enforce such settlement agreements. The new Convention seeks to establish a streamlined and harmonized framework for cross-border enforcement of commercial settlement agreements, thereby promoting the use of mediation for the resolution of disputes arising from international business and trade.

Find a brief introduction and the full text of Singapore Mediation Convention are at the official website at www.singaporeconvention.org.

Within the past year in the CPR Institute’s Alternatives to the High Cost of Litigation newsletter, Piotr Wójtowicz and Franco Gevaerd provided an overview of some key features of the Convention, with a focus on the basic requirements for the treaty’s application to a specific settlement agreement.  See the authors’ analysis at “A New Global ADR Star is Born: The Singapore Convention on Mediation,” 37 Alternatives 141 (October 2019) (available at https://bit.ly/3gJf7JI) and also their discussion of the grounds for States’ or parties’ refusal of enforcement, “How the Singapore Convention Will Enforce Mediated Settlement Agreements Across Borders,” 1 Alternatives 9 (January 2020) https://bit.ly/3jAMdNL).

Some treaty features already have proven to be of great importance in the age of Covid-19. For example, in the face of increasing acceptance of, or at least acquiescence to, online ADR, the Singapore Convention does not incorporate the concept of a “mediation seat.” According to the United Nations Commission on International Trade Law, best known as UNCITRAL, while an arbitral award usually has a place of issuance to help determine its “foreign” nature, it can be difficult to connect a settlement agreement to a specific place or legal seat due to mediation’s inherently flexible nature. Report of Working Group II, UN Doc. A/CN.9/861 (2015) (available at https://bit.ly/2QIgopO).

The treaty also will not just be concerned with the differences between mediation and arbitration, but also about how business disputes are resolved in the 21st century. Negotiations are conducted in video conferences; agreements are developed and reached via emails, and multiple jurisdictions can be involved in one cross-border mediation.

The COVID-19 pandemic is accelerating these activities, since parties likely can’t travel to mediate, and at least some mediation sessions have to take place remotely even for those who prefer in-person meetings.

Wherever or however the mediation is conducted, the resulting agreement will qualify as “international” under Article 1 of the Convention (i) as long as  at least two parties to the settlement agreements have their places of business in different States; or (ii) when the parties have places of business in the same State, that State “is different from either [S]tate where the obligations of the mediated settlement agreement are to be performed, or the [S]tate with which the subject matter of the mediated settlement is most closely connected.” Timothy Schnabel, “The Singapore Convention on Mediation: A Framework for the Cross-Border Recognition and Enforcement of Mediated Settlements,” 19 Pepperdine Disp. Resol. L.J. 1, 21 (2019) (available at https://bit.ly/2GIGtmQ). The settlement agreement itself, however, is essentially “a stateless instrument.” Id. at 22.

Indeed, many have found mediation the most appropriate and least cumbersome commercial dispute resolution forum during the pandemic. It serves as an efficient and manageable process where parties are encouraged to sit together and come up with creative solutions to preserve both sides’ economic interests and long-term partnership. See, for example, Ivana Nincic, “The Impact and Lessons of the Covid-19 Crisis as Regards the Efficiency of Justice and the Functioning of the Judiciary–a View from the Mediator’s Lens,” International Mediation Institute (available at https://bit.ly/2YQmNDw).

One may even question if international mediation will become the “new normal” for many disputes. Nadja Alexander, “International Mediation and COVID-19–The New Normal?” Kluwer Mediation Blog (May 21, 2020) (available at  https://bit.ly/352B30f). See generally the CPR Institute’s web page ADR in the Time of Covid-19 at www.cpradr.org/resource-center/adr-in-the-time-of-covid-19.

Yet it is one thing to celebrate mediation’s increasing prevalence, but another to predict how successful the Singapore Mediation Convention is going to be. To be more specific, it remains to be seen whether and to what extent the potential users of the new treaty, namely multinational corporations, will be willing to invoke this brand-new framework and make necessary adjustments to their business and legal arrangement accordingly.

Here is an example raised in a panel discussion by Mark Califano, Chief Legal Officer at Nardello & Co., a New York-based international consulting firm that conducts investigations for corporations,  at this year’s American Society of International Law’s Annual Meeting. Under Convention Article 4(1)(b), mediators are expected to sign off on the settlement agreement or use other methods to indicate their involvement. Under Article 5(1)(e), serious misconduct by the mediator is a ground for refusing to grant relief.

While this design may be a reasonable requirement for the purpose of transboundary enforcement, it is, to certain extent, inconsistent with the common practice in places like the United States, where the process of mediation is highly confidential and the behavior of mediators is rarely subject to litigation.

Therefore, parties may want to draft a contract clause beforehand to make sure that whatever settlement agreement that comes out of the mediation process fulfills the requirements imposed by Singapore Convention. The Singapore Convention on Mediation and the Future of Appropriate Dispute Resolution, ASIL 2020 Virtual Annual Meeting (June 25, 2020) (available at https://bit.ly/34PHKT3).

In addition, the Singapore Convention’s limited application scope may prevent it from breaking the hegemony of the powerful, “all-encompassing” New York Convention.

Settlement agreements attained via mediation and negotiation and confirmed by the arbitral tribunal are enforceable under the New York Convention. On the contrary, Article 1(3) of the Singapore Convention excludes settlement agreements that have been approved and are enforceable as judgments or as arbitral awards from its scope of application.

As a result, cross-border businesses used to hybrid dispute resolution procedures might prefer to keep mediation as part of the arbitration proceeding, where “the success or failure of mediation will not affect the enforceability of the final award rendered by the arbitral tribunal.” Ashutosh Ray, Is Singapore Convention to Mediation what New York Convention is to Arbitration? Kluwer Mediation Blog (Aug. 31, 2019) (available at https://bit.ly/32FEjf7).

Aside from international treaties, the Singapore Convention may need to compete with the pre-existing domestic or regional legal regimes in different jurisdictions. Under Article 12(4), the Convention should not prevail over conflicting rules of a regional economic integration organization if relief is sought in a member State of that organization.

Thus, if the European Union adopted the Convention, practitioners would need to explore how to reconcile the Convention with the EU Directive on Mediation, which does not authorize direct enforcement of settlement agreement. Iris Ng, The Singapore Mediation Convention: What Does it Mean for Arbitration and the Future of Dispute Resolution? Kluwer Mediation Blog (Aug. 31, 2019) (available at https://bit.ly/34Sdw1U).

In Singapore, parties to international mediated settlement agreements are allowed to pick and choose between mechanisms of the Singapore Mediation Act 2017 and the Singapore Convention according to their needs and features of individual cases. Nadja Alexander & Shou Yu Chong, Singapore Convention Series: Bill to Ratify before Singapore Parliament, Kluwer Mediation Blog (Feb. 4, 2020) (available at https://bit.ly/3bbGlYf).

Despite all of this, we should agree with Piotr Wójtowicz and Franco Gevaerd who noted with their Alternatives articles linked above that the Singapore Mediation Convention is another milestone in international dispute resolution. The fact that the Convention was drafted and finalized in fewer than five years is itself an encouraging indication that “joint international effort is still viable,” the authors noted in their second article in January.

International businesses and lawyers will not refuse to diversify and expand their toolkit with a simplified enforcement framework. What the ADR world needs now is more practical experience and some legal precedents for the Convention to mature.

The author, a student at Harvard Law School in Cambridge, Mass., was a 2020 Summer Intern at the CPR Institute, which publishes CPR Speaks.

Committee Q&A: A Conversation with Mediation Committee Co-Chair, Marjorie Berman 

marjorieberman

As part of our continuing “Committee Q&A” series, we sat down recently with Mediation Committee Co-Chair, Marjorie Berman of Krantz & Berman (pictured), to learn more about what this committee has been up to and has planned for the future.

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The Mediation Committee consists of CPR members throughout the world and aims to enhance the quality and effectiveness of corporate mediation practice, both domestically and internationally.  The Mediation Committee recently released Mediation Best Practices Guide for In-House Counsel: Make Mediation Work for You, a CPR members-only guide with insider tips from in-house counsel on how to navigate every step of the mediation process (digital copies available to CPR members at no cost).  The Mediation Committee meets quarterly to collaborate and share best practices and put on programs of interest.   In addition, the Committee works to identify qualified neutrals to serve on CPR’s Panels of Distinguished Neutrals. You may find online, CPR’s Mediation ProcedureFast Track Rules for Mediation, and International Mediation Procedure (2017), as well as other industry-specific protocols.

Q. What are some of the specific issues that the Mediation Committee has focused on recently, and how?

A. I am a relatively new add to the committee but, looking back at just the past two meetings we’ve held, the first was on the Singapore Convention. We worked to fashion a program that would be meaningful – and useful – to people at all levels, including some who may not be as familiar with international law.  And at our most recent meeting, we focused on the very timely topic of confidentiality in mediation.

There has been a recent vintage of challenges to the confidentiality of mediation in the courts. Eugene Farber and Professor Nancy Rogers of the Ohio State University Moritz College of Law spoke, and the meeting was super lively and chock full of information. The event also inspired a very strong dialogue among the participants with respect to both knowledge and practice tips on anticipating that such issues could arise.

Q. Can you give us a preview of some of the important issues the Mediation Committee will be focusing on in the coming year?  

A. One long-term focus of the committee is an even closer look at this issue of confidentiality in mediation. Because candor between a mediator and parties is essential, mediation depends upon the privileges and confidentiality that protect those communications. The law protecting mediation communications is a patchwork of federal and individual case statutes, case law and rules of conduct that vary across jurisdictions.

This project will inform practitioners of the law and rules governing mediation confidentiality by jurisdiction so they can prepare themselves in the event they need to mediate in an unfamiliar locale. In fact, as people are reading this, and they have personal experiences with challenges to confidentiality and being put in the spotlight in a litigation – not where mediators wish to be! – I encourage them to share those stories with the committee.  

Q. What have you personally gotten out of participating in CPR’s committee structure, and what would you say to busy CPR members about why they should become more involved?

A. Even in the short term in which I’ve been intensely involved, participation in the committee has given me exposure to a wide variety of mediators working in many different contexts, and to a breadth of mediation practices. We can all so easily develop a narrow focus in our work, so it is especially valuable to get perspective from all angles – including from inside and outside litigators using mediation, mediators doing mediation, mediators working both in the US and around the world and academics studying mediation.

Q. Why would you encourage people to join CPR’s Mediation Committee in particular?

A. To some degree mediators tend to be in a bit of a closed world. They mediate cases and its often just them, in a room as a mediator. Being a part of such a dynamic and interactive group expands your view and allows you to process and grow both your perspective and your practice. This is valuable whether you’re a mediator trying to develop your own practice, or a litigator from a corporation or a law firm who is involved as a participant, trying to get a perspective of where mediators are coming from – because you can’t have that kind of conversation with your own mediator.

Committee participation also provides the broader opportunity to act as a thought leader, helping to improve the effectiveness of mediation and to shape best practices. Mediation is a very dynamic area where small changes can produce big results in terms of outcomes, and this committee offers an opportunity to become a meaningful part of that.

Marjorie Berman of Krantz & Berman LLP represents civil litigants in business disputes, employers and employees in employment conflicts, and individuals in white-collar criminal matters.

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CPR committees are always looking to increase membership and participation, and there are no extra fees or costs associated with joining. Learn more about CPR’s other industry and subject matter committees here. To become a committee member, log in and join the committee(s) of your choice or email a note of interest to Richard Murphy at rmurphy@cpradr.org.

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Ready to Sign: The Singapore Convention, An International Mediation Treaty, Opens for Ratification

By Hew Zhan Tze

After years of negotiations, the Singapore Convention on Mediation last week reached the signature phase.

That means that countries around the globe can sign on, and ratify, a treaty designed to boost the use and support for mediation in cross-border transactions.

The convention is officially known as the United Nations Convention on International Settlement Agreements Resulting from Mediation, and is available at https://bit.ly/2YWbHKN.

On Aug. 7, more than 1,500 international delegates from 70 countries attended a Singapore signing ceremony.

A total of 46 countries–including the United States and China–signed the convention on the first day. (The full list is available from the United Nations at http://bit.ly/2ZPFGFl.)

The convention is a product of the efforts of the United Nations Commission on International Trade Law Working Group II to alleviate the difficulties of enforcing a cross-border settlement agreement reached from mediation. It can only come into effect after six months, and after three signatory countries ratify the treaty. See Article 14(1) of the Singapore Convention at the first link above.

Ratification is a signatory country’s domestic procedure where treaty approval is sought, and necessary legislation is enacted to give effect to the convention.

Generally, in the United States, a treaty can only be ratified by the president after receiving the advice and consent of the U.S. Senate. The Senate must pass a ratification resolution, requiring a two-thirds approval.  See U. S. Const. Art. II, § 2 (available at https://bit.ly/2zBgoge).

The Singapore Convention’s goals have been likened to a mediation version of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, best known as the New York Convention. (Available at http://bit.ly/2KHaa5W.)

The large number of initial signatories to the Singapore Convention appears to show a positive reception toward easing enforcement of a settlement agreement obtained from other similarly bound jurisdictions. This is in comparison to the 10 signatures received at the launch of the New York Convention six decades ago. The increase in numbers likely reflects an increased recognition of the effectiveness of ADR methods.

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More analysis on the Singapore Convention on Mediation will appear in the September Alternatives to the High Cost of Litigation, available soon at altnewsletter.com.

The author was a CPR Institute Summer 2019 intern.

 

International Commercial Mediation Update: UNCITRAL Finalizes Convention and Model Law Drafts on International Settlement Agreements Resulting from Mediation

By Erin Gleason Alvarez

erinEarlier this year, we reported on the United Nations Commission on International Trade Law (UNCITRAL) Working Group II’s progress towards finalizing a convention on the enforcement of international commercial settlement agreements resulting from mediation. On June 25, 2018, UNCITRAL finalized the draft Convention on International Settlement Agreements Resulting from Mediation, to be known as the Singapore Convention, as well as finalizing the draft Model Law.

By way of background, Working Group II was initiated by UNCITRAL in 2014 in order to explore whether it might be feasible to develop mechanisms for the enforcement of mediated agreements in international commercial disputes. The need for this Working Group grew out of concern that parties to mediated agreements may not be afforded the same protections as those available in international commercial arbitration.

The achievements of Working Group II were extolled at an UNCITRAL conference at the United Nations on June 27, held in celebration of the 60th anniversary of the New York Convention. Representatives from Israel and Australia, who participated in the Working Group, led a discussion on the drafting process. Consideration over an international mediation convention lasted nearly four years, and it seems that a few mediations took place in finalizing the documents.

The Convention and Model Law drafts outline the requirements for a settlement agreement, process for enforcing an agreement and grounds for refusing to grant relief.  The documents are seen as completing the ADR framework for international disputes.

States that have participated in this process include Argentina, Australia, Austria, Bulgaria, Cameroon, Canada, Chile, China, Colombia, Czechia, Denmark, Ecuador, El Salvador, France, Germany, Greece, Hungary, India, Indonesia, Israel, Italy, Japan, Kuwait, Lebanon, Libya, Malaysia, Mexico, Namibia, Nigeria, Philippines, Republic of Korea, Romania, Russian Federation, Sierra Leone, Singapore, Spain, Switzerland, Thailand, Turkey, United Kingdom of Great Britain and Northern Ireland, United States of America and Venezuela (Bolivarian Republic of). The session was also attended by observers from Algeria, Belgium, Benin, Cyprus, Democratic Republic of the Congo, Dominican Republic, Finland, Iraq, Morocco, Nepal, Netherlands, Norway, Saudi Arabia, Syrian Arab Republic and Viet Nam, in addition to observers from the European Union and the Holy See.

From here the Convention and Model Law must be approved by the General Assembly, which will likely happen later this year. In August 2019, a signing ceremony will be held for the Convention in Singapore and thus the Convention will be known as the “Singapore Convention.”

At the June 27 United Nations event, hope was expressed that the Singapore Convention would do for mediation what the New York Convention has done for arbitration.

 

Erin Gleason Alvarez serves as mediator and arbitrator in commercial and insurance disputes.  She is a member of the CPR Institute Panel of Distinguished Neutrals and co-chairs the CPR Institute Mediation Committee.  Erin may be reached at erin@gleasonadr.com