In a move that reflects the ongoing intention of the United Kingdom’s Government to strengthen the country’s status as a hub for commercial dispute resolution, the UK signed the United Nations Convention on International Settlement Agreements Resulting from Mediation (the “Singapore Convention”) on May 3, 2023. This is an important development for companies considering mediation as a means of resolving international disputes in the UK or with UK-based counterparties.
International Mediation and the Need for Harmonization
Mediation is a form of alternative dispute resolution (ADR) that is facilitated by a neutral third-party mediator. The outcome of mediation is non-binding, unless the parties agree to memorialize the terms of the settlement in a mediation settlement agreement (MSA).
Generally, MSAs are enforced like any other contract. When the parties to an MSA are located in different countries, enforcing the MSA through cross-border claims for breach of contract can be difficult, expensive, and time-consuming. This has impeded the use of mediation as a means of resolving international disputes.
The Singapore Convention is intended to resolve this problem by making MSAs directly enforceable by the courts of States that ratify the convention (“States”). In this regard, the Singapore Convention does for mediation what the New York Convention has done for arbitration, i.e., it creates a harmonized framework for cross-border ADR enforcement.
Scope of the Convention
The Singapore Convention applies to any written settlement agreement that results from mediation, resolves a commercial dispute, and is international in nature.
For an MSA to be “international” for purposes of the Singapore Convention:
The Singapore Convention’s scope expressly excludes:
MSA Enforcement Under the Convention
As a State party to the Singapore Convention, the UK will have a duty to recognize and enforce an MSA from any jurisdiction, provided the MSA is within the Singapore Convention’s scope.
To enforce an MSA under the Singapore Convention, a party must deliver a copy of the signed MSA to the court and provide evidence that the MSA resulted from mediation. The court is required to act expeditiously on a party’s claim.
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