The United Nations Convention on International Settlement Agreements Resulting from Mediation, doubled “Singapore Convention”, as it was signed in Singapore, opened for signature on August 7, 2019, and so far, 46 Countries, including China, US and India, but not from Europe yet, have signed it. The Singapore Convention will enter into force six months after ratification by three countries, and it is intended to facilitate the enforcement of settlement agreements that have been entered into with the assistance of mediation.
Currently, mediated settlement agreements, apart from recorded within legal proceedings or arbitrations, can generally only be performed similar to any other contract. The Singapore Convention aims to make settlement agreements resulting from the mediation of international commercial disputes more easier enforceable. It will allow a party of a settlement agreement to resort directly to a court of a member state for enforcement, without first obtaining a default judgment, and the court must then enforce the settlement agreement in accordance with the civil procedural rules of that member state and the conditions set forth in the Singapore Convention.
However, the Singapore Convention only applies to international commercial disputes. Settlement agreements that have been recorded in court proceedings, and that are enforceable as a judgment in the jurisdiction of such court, or those that have been recorded and are enforceable as part of an arbitral award are excluded from the scope of applying the Singapore Convention. Settlement agreements which regard subject matters, such as family, inheritance or employment law, and disputes arising from transactions engaged in by a consumer for personal, family or household purposes – are excluded.
The settlement agreement may only be refused enforcement under one of the grounds listed in Article 5 of the Convention. These grounds include the incapacity of a party to the settlement agreement, the settlement agreement is null and void under its applicable law and breaches of mediation standards.
This Convention is indeed a positive development for enabling easier enforcement of international mediation settlement agreements of cross-border disputes. However, there is still a lot work to be done to ensure that the Convention can really act as a catalyst for the development of mediation worldwide.
We at Wintertaling are tightly monitoring the development of the Singapore Convention. If you have any questions on how this could affect your business, please reach out to us.
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