Saudi Arabia is fourth country to ratify Singapore Mediation Convention

Out-Law News | 04 Jun 2020 | 3:45 pm | 1 min. read

Saudi Arabia has become the fourth country to ratify the Singapore Mediation Convention, an international agreement on cross-border mediation.

The country followed in the wake of Singapore, Fiji and Qatar which all ratified the Convention, formally known as the United Nations Convention on International Settlement Agreements Resulting from Mediation, earlier this year.

Qatar’s ratification triggered a six-month countdown to the Convention coming into force in September. Saudi Arabia ratified the Convention on 5 May and it will enter into force in the country on 5 November 2020.

Dispute resolution expert Seema Bono of Pinsent Masons, the law firm behind Out-Law, said the timing of the ratification was notable.

“The Covid-19 pandemic and increased pressure on funds will make mediation, which is currently under-used in the Middle East region, all the more important and relevant. Mediation is an efficient and attractive means to resolve disputes, particularly as it can allow parties to preserve commercial relationships. It can the avoid unnecessary cost, delay and management time associated with more formal methods of dispute resolution such as litigation and arbitration,” Bono said. 

Saudi Arabia is changing some of its regulatory and legal structures to meet its ambition of becoming an investment centre. “This particular development shows that Saudi Arabia is being progressive, quick and responsive to change as it looks for outside investment,” Bono said.

The Singapore Mediation Convention, which has been signed by 52 countries, aims to support international trade and encourages the use of mediation when dealing with the resolution of cross-border commercial disputes, addressing a problem whereby mediation was repeatedly turned down as an alternative dispute resolution option for the reason that a settlement might not be readily enforceable in a different jurisdiction. The Convention gives reassurance that a mediated outcome will have the same protection as international arbitration.

It defines mediation in broad terms, creating a presumption in favour of enforceability and setting out limited grounds on which enforcement may be validly declined.  Businesses will be able to seek to enforce the award in any signatory country without needing to launch substantive proceedings.