Out-Law / Your Daily Need-To-Know

Out-Law Analysis 1 min. read

Qatar sparks Singapore Mediation Convention countdown

Businesses in Qatar will find it easier to enforce decisions reached following mediation with other parties after the Singapore Mediation Convention was ratified in the country last month.

The Singapore Mediation Convention seeks to address the problem that sometimes arises following mediation – a losing party's unwillingness to honour the outcome of the process.

That outcome is recorded in a settlement agreement, and if the losing party refuses to pay, businesses are often forced to initiative expensive litigation or arbitration proceedings to compel payment in line with the agreement, commonly along the lines of a claim for breach of contract.

The introduction of the Singapore Mediation Convention means businesses will be able to seek to enforce the award in any signatory country without needing to launch substantive proceedings.

Qatar is one of 47 countries to have signed the Singapore Mediation Convention, having done so last year. It became only the third country, after Fiji and Singapore, to formally ratify the Convention on 12 March this year. This was a significant development as the Convention requires at least three countries to have ratified it before the treaty can come into force. Qatar's ratification therefore triggered the start of a six month countdown to when the Convention comes into force on 12 September 2020.

Many international investors in Qatar have sought the certainty that the Singapore Mediation Convention offers. Now, rather than bypassing mediation agreements contained in contracts, the opportunity to mediate – a quicker and cheaper alternative to court or arbitration – is likely to be seen as a compelling alternative for parties, whilst still retaining certainty of outcome.

Whilst the Convention applies to settlement agreements involving international parties, Qatar's acknowledgement of the commercial drivers behind the Convention is also likely to influence businesses in dispute domestically in the country. The option of mediating settlement agreements, and alternative dispute resolution more generally, is likely to be seen as more an attractive option.

To be truly effective, the Convention needs more countries to sign up and buy into its vision, of giving settlement agreements that are the product of a mediation enforceability status akin to a judgment or arbitral award, to the benefit of business. More signatories would increase the availability of cross-border enforceability in locations where assets are located around the world.

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