Singapore convention could ‘enhance UK position’ as global mediation hub

Out-Law News | 03 Mar 2022 | 9:59 am | 2 min. read

Signing up to a United Nations convention on cross-border mediation, could help the UK “to maintain and enhance its position as a global hub for dispute resolution,” according to litigation specialists.

Michael Fletcher, litigation expert at Pinsent Masons, said that endorsing the ‘UN convention on international settlement agreements resulting from mediation’ – known as the ‘Singapore convention’ - would be “consistent with the UK’s status as a leading dispute resolution forum.”

Mediation is designed to provide a flexible and cost-effective method for resolving commercial disputes through an interactive, consensual process involving assistance from an impartial third party mediator. Mediation differs from arbitration, under which disputes are resolved by way of a binding ruling from an independent third party arbitrator. Mediation can be used to resolve disputes which would otherwise proceed to a determination, either by an arbitrator or by a judge in court.

The Singapore convention, which opened for signature in August 2019, currently has 55 international signatories and nine ratifications. It aims to provide reassurance that cross-border mediation outcomes will be recognised and enforced outside of the host jurisdiction. Parties to a settlement agreement which has been signed in one country will be able to enforce or invoke it in another country - provided the country in which enforcement is sought is a member of the convention and the settlement agreement is within the convention’s scope. Convention member states may establish new expedited procedures to give effect to this.

Without the convention, a party wishing to enforce a mediated agreement overseas would first need to obtain a court judgment for breach of that agreement, as they would for any other contract.  Whether they could do that in the intended jurisdiction for enforcement, or would have to first obtain a judgment in the host jurisdiction of the mediation and then seek to enforce it overseas, would depend on the applicable rules of court jurisdiction.

“China, India, the US and Australia are all signatories to the convention already and are strategically important countries for the UK from a trade perspective. Facilitating the swifter, more efficient resolution of disputes may help underpin the UK’s trading relations with those jurisdictions,” Fletcher said.

He added: “On one hand, the immediate practical impact of the UK signing up to the convention is likely to be fairly minimal. The convention does not require reciprocity between states – meaning all in-scope settlements resulting from UK mediations would already be enforceable in states which have ratified the convention.”

“Mediation is also a well-established form of dispute resolution in the UK and it is already possible, albeit probably more time-consuming and expensive than the convention envisages, to enforce a mediated agreement here,” Fletcher said. “But when viewed within the wider context of dispute resolution developments, the UK’s endorsement of the convention would be symbolic. By adding its signature, the UK would be demonstrating its commitment to – and raising awareness amongst businesses of – mediation as a form of cross-border dispute resolution.”

Last month, the Ministry of Justice launched a public consultation on whether the UK should ratify the Singapore convention. It comes amid an increase in support in the UK for more compulsory ‘negotiated dispute resolution’ (NDR) – as it is now described in the latest edition of the English Commercial Court Guide, in place of the previous term ’alternative dispute resolution‘. The permissibility of the court requiring parties to mediate their disputes was also backed by a 2021 Civil Justice Council report.

Litigation expert Beth Pendock of Pinsent Masons said the international scope of many commercial agreements and disputes would mean “any shift towards a more integrated system of NDR in the UK” would have a cross-border impact. “Not only is there a growing appetite for NDR more generally, but the introduction of online mediations during the Covid-19 pandemic has also made the process an even more attractive method for resolving cross-border disputes,” she said.

Pendock added: “International commercial parties are likely to embrace the shift towards remote mediation as a permanent option given the savings to time and cost that moving online can offer, as well as providing a more climate-friendly route to dispute resolution.”