What in-house lawyers need to know about the Singapore Convention

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The 2018 United Nations Convention on International Settlement Agreements Resulting from Mediation (“Singapore Convention”) is an important step in promoting mediation as an alternative method of dispute resolution in international trade.

The fact that the Singapore Convention has been signed by important countries, such as the two largest economies in the world (the United States and China), three of the largest and fastest growing Asian economies (Singapore, India and South Korea South), Australia and several countries in the Middle East, Eastern and African countries, will help promote mediation around the world.

Mediation can be used as an alternative dispute resolution method or as a preliminary step in a tiered dispute resolution mechanism. When considering mediation in one of the countries where the Singapore Convention is in force, businesses should keep in mind the basic requirements that the settlement agreement must be recognized and enforced under the Convention. from Singapore.

First, the settlement agreement must be in writing in any form, including electronic communications that are accessible and usable for future reference.

Second, the settlement agreement must be signed by the parties. The signature of the mediator or an attestation from the institution that administered the mediation can confirm that the settlement agreement is the result of the mediation. Other evidence of mediation may also be accepted by the competent authority.

A translation of the settlement agreement into the official language of the Party to the Agreement where enforcement is sought may be requested by the competent authority if the settlement agreement is not drawn up in that language.

In addition, to be recognized and enforced, the Settlement Agreement must be final and binding according to its terms and valid under the law to which the parties have subjected it or under any other applicable law.

The obligations contained in the settlement agreement must be clear and consistent, and its execution must not be contrary to the public policy of the country where the execution is sought.. Similarly, the subject of the dispute that has been settled must be capable of being settled by mediation under the law and the parties must not be incapacitated.

It is also important that the mediator respects ethical standards. In this regard, the impartiality and independence of the mediator are particularly important. Even if the mediator is not a judge or an arbitrator, it is essential that he maintain his independence and impartiality to ensure the integrity of the mediation process.

Failure by the mediator to comply with applicable standards or to disclose circumstances that could have given rise to legitimate doubts as to his impartiality or independence may result in the nullity of the settlement agreement and the refusal to perform it if Such circumstances had a material impact on a party and that party would not have entered into the Settlement Agreement if it had known of those circumstances.

In conclusion, although mediation is a faster and more informal procedure than litigation and even arbitration, there are some basic formal and substantive requirements that should always be borne in mind when parties consider mediation, in particular if the parties want to avail themselves of the advantages granted by the Singapore Convention.

By setting a uniform framework in precise and concise terms, the Singapore Convention makes the mediation process more reliable because it facilitates the enforcement of settlement agreements.

Time will tell whether the Singapore Convention will achieve the same level of success, both in terms of number of ratifications and widespread practical application, that the 1958 New York Convention achieved for arbitration in establishing uniform standards for recognition and enforcement of foreign rights. arbitration awards.

Lawrence Emailchionda is a local partner based in Dubai at BonelliErede.

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