The UK government has announced its intention to sign the United Nations Convention on International Settlement Agreements Resulting from Mediation1 (the "Singapore Convention"), a convention that aims to establish a consistent and effective system for recognizing and enforcing mediated settlement agreements in cross-border disputes. As businesses prepare for the practical implications of the Singapore Convention, they can expect a more streamlined process for cross-border recognition and enforcement of mediated settlement agreements. This will further promote mediation as an internationally recognized dispute resolution mechanism2.
- The Singapore Convention will provide the UK with a more efficient process for cross-border recognition and enforcement of mediated settlement agreements, which will facilitate international trade and commerce between signatory nations. Other signatories include (for example) the USA, China, India, and Singapore, and a full list may be found here. It will increase confidence in commercial mediation and encourage other countries to follow suit. For more details of the Singapore Convention's key provisions, see our earlier post3.
- The Singapore Convention will also integrate mediation as a mandatory step within the court process for civil claims in England and Wales, which is expected to further boost the mediation sector and strengthen the UK's position as a mediation hub.
How does the Singapore Convention apply to the UK?
- The UK Courts will be able to directly enforce global mediation settlements, including those held within the UK, as long as the dispute is considered "international" under the Singapore Convention. "International " is defined as where at least two of the parties have their place of business in different states; or if the parties' business locations are not in the state where most of the settlement agreement's obligations are to be carried out or which is most relevant to the agreement's subject matter.
- In a similar way to the New York Convention4 for arbitral awards, mediated settlements reached by parties who mediate their disputes in the UK will be enforceable in other signatory states under the Singapore Convention.
- In the UK, the Singapore Convention will apply generally and without limitations, as the UK government has not invoked either of the Singapore Convention's two permissible reservations. Those reservations are that the Singapore Convention (1) shall not apply to settlement agreements involving Governmental or state parties; and (2) shall only apply to the extent that parties to the settlement agreement agree to apply it. This is said to demonstrate UK's commitment to maximise the Singapore Convention's effectiveness.
Potential Benefits for Businesses
- Encourages a cost-effective and efficient way to resolve disputes with international counterparts, with useful mechanisms for expedited enforcement of mediated settlement agreements.
- Reduces the need for time-consuming traditional litigation.
- Adapts to the digital era by allowing flexible formality requirements. Settlement agreements may be concluded "in any form".
Overall UK Impact
The impact of the Singapore Convention on the UK's legal system is expected to be limited, as mediated settlements are usually readily enforced by the UK courts. However, it is hoped that the UK's accession to the Convention will further promote mediation in particular as a means to resolve cross-border disputes.
Importantly, as a signatory state, the UK can contribute to how the Convention's provisions are, or should be, interpreted and applied internationally.
Current Situation & Next Steps
The UK government has committed to signing the Singapore Convention on mediation as soon as possible. While many parties have signed the Singapore Convention without immediate ratification (a process which can be drawn out or in some cases postponed indefinitely), the UK government as indicated that it will ratify the Singapore Convention once all necessary implementing legislation and rules have been established to facilitate its coming into force. The Singapore Convention is expected to come into effect in the UK six months after ratification, and the UK government has also indicated that it will promote the Singapore Convention internationally to encourage more ratifications5.
1 United Nations Convention on International Settlement Agreements Resulting from Mediation (New York, 2018) (the "Singapore Convention on Mediation"), United Nations Commission On International Trade Law.
2 See Consultation outcome, Government response to the Consultation on the United Nations Convention on International Settlement Agreements Resulting from Mediation (New York, 2018), Updated 2 March 2023, https://www.gov.uk/government/consultations/the-singapore-convention-on-mediation/outcome/government-response-to-the-consultation-on-the-united-nations-convention-on-international-settlement-agreements-resulting-from-mediation-new-york-20
3 The Singapore Convention on Mediation: A Further Dispute Resolution Option for Businesses, Yu-Jin Tay, 18 September 2019, https://www.mayerbrown.com/en/perspectives-events/publications/2019/09/the-singapore-convention-on-mediation-a-further-dispute-resolution-option-for-businesses
4 The New York Arbitration Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10 June 1958, https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/new-york-convention-e.pdf