New Convention to give effect to settlements reached through Mediation

New Convention to give effect to settlements reached through Mediation | BDM Blog | BDM Law

The United Nations (UN) Convention on International Settlement Agreements Resulting from Mediation (Singapore Convention) was signed on 7 August 2019 by 46 countries including the economic power houses of China and the USA. However, so far neither the UK nor any of the other EU nations have signed-up. The Convention will come into force 6 months after it has been signed and thereafter ratified by three signatories.

The aim of the Convention is to encourage the use of mediation in cross-border disputes rather than heading straight to arbitration or the courts. The Convention will provide a mechanism to give parties the confidence that, where a cross-border dispute is settled through mediation, any resulting agreement will be enforceable by its terms.

The Convention will apply where the settlement agreement:

  • is between at least two parties who have their place of business in different Convention states; and
  • is signed by the parties; and
  • resulted from mediation;

It is important to note that relief may not be granted under the Convention where the parties expressly opt out of the Convention in the settlement agreement and that the Convention allows Signatory States to make a reservation that the Convention will only apply where the parties have expressly agreed for it to apply. In our opinion, it will be important for parties to take careful consideration whether it is desirable to expressly opt-in or out of the Convention within the terms of any settlement agreement.

In practice we will have to wait and see how quickly other nations sign up to the Convention and how many of those choose to make the opt-in reservation. The New York Convention, which provides a similar mechanism for the enforceability of arbitral awards, was only signed by 10 nations upon its launch and now, just over 60 years later, has been signed by 160 signatories. There does not seem to be any logical reason why the Singapore Convention will not be as successful as the New York Convention.

A full copy of the Convention can be read here

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