Key Features of the Singapore Convention on Mediation (The United Nations Convention on International Settlement Agreements Resulting from Mediation)
Background of the SCM
The United Nations Convention on International Settlement Agreements Resulting from Mediation, (also known as the Singapore Convention on Mediation (SCM)), opened for signature in Singapore on 7 August. The SCM seeks to facilitate international trade by furthering the promotion of mediation as a fast, cost-efficient and effective way of resolving international disputes.
At its opening, the SCM was signed by 46 countries, including three of the world’s largest economies – China, India, and the United States of America.
The SCM came into force on 12 September 2020 when Singapore, Fiji, and Qatar became the first three states to ratify. Since then, it has also been ratified by Saudi Arabia, Belarus, and Ecuador.
The SCM seeks to provide a way for international mediated settlement agreements to be easily be recognized and enforced internationally. Under the SCM, parties will be able to apply directly to the courts of other ratifying party states to enforce settlement agreements resulting from mediation, without the need to initiate new proceedings. The United Nations Commission on International Trade Law’s (UNCITRAL), which promulgated the SCM, hopes that it will make settlements resulting from mediation much easier to enforce, akin to the New York Convention for arbitral awards, thereby promoting mediation as a mechanism for international dispute resolution.
What mediation settlements are covered?
The SCM applies to international settlement agreements resulting from mediation, concluded in writing by parties to resolve a commercial dispute.
Under the SCM, the definition of mediation is a process “whereby the parties attempt to reach an amicable settlement of their dispute with the assistance of a third person or persons lacking the authority to impose a solution upon [them]”. Provided certain conditions are satisfied (see Section B below), agreements to resolve international commercial disputes resulting from a mediation, and which are concluded in writing, will be enforceable in the courts of any signatory state. The SCM, however, does not spell out who qualifies as a mediator for the purpose of the convention.
The SCM applies to commercial disputes. The UNCITRAL Working Group II made the early decision to limit the scope of the Convention to only disputes of a commercial nature but left the term undefined so as to capture a broad scope of disputes, including investor-state disputes. What is clear however, is that settlement agreements relating to family, inheritance, or employment law or those where one party is a consumer are excluded from the SCM.
The SCM also does not apply to settlement agreements that have been approved by a court or concluded during court proceedings (and which are therefore already enforceable as a judgment) and to settlement agreements that have been recorded and are enforceable as an arbitral award.
It is possible for signatory states to declare that the SCM will not apply to public contracts involving the government or any of its agencies. States may also stipulate that the parties to the settlement agreement to be enforced have to have agreed to the application of the SCM.
Conditions for Recognition / Enforcement
In order for an international mediated settlement agreement to be recognized and enforced, the settlement agreement must have been:
- concluded after the Convention entered into force for the state concerned,
- result from mediation,
- be concluded in writing.
The dispute must also be international in nature. Whether the dispute is considered “international” is largely dependent on the identities of the parties involved. The SCM stipulates that the settlement agreement is considered “international” where
- at least two parties to the settlement agreement have a place of business in different States; or
- the State in which the parties to the settlement agreement have their places of business is different from either:
- the State in which a substantial part of the obligations under the settlement agreement is performed; or
- the State with which the subject matter of the settlement agreement is closely connected.
Additionally, and unlike arbitration, the SCM does not adhere to the concept of a mediation seat. Accordingly, it does not need to meet domestic legislative requirements of any State as a prerequisite to fall within the scope of the SCM.
Parties seeking to have their settlement agreement recognized under the SCM must apply to the competent authority of the state in which they are seeking enforcement and provide supporting documents including the settlement agreement signed by the parties and the mediator, and evidence that the settlement agreement resulted from mediation. Of course, each state will have their specific processes by which such an application is to be made.
Upon receiving an application and the receipt of all required documents, the competent authority of that state is obligated, subject to certain grounds for refusal (see Section C below) to enforce the mediated settlement as a binding agreement.
Grounds for Refusal
The competent authority may refuse enforcement of the mediated settlement as a binding agreement under the SCM. Grounds for refusing relief include:
- A party to the settlement was under some form of incapacity;
- The settlement agreement is null and void, is not binding or not final, or has been subsequently modified;
- The obligations in the settlement agreement have been performed or contain incomprehensible and ambiguous terms;
- Granting relief would run contrary to the terms of the settlement agreement itself;.
- There was a breach by the mediator of standards applicable to the mediator or to the mediation, without which breach that party would not have entered into the settlement agreement;
- There was a failure by the mediator to disclose relevant information that raise justifiable doubts as to the mediator's impartiality or independence, and that failure to disclose had a material impact or undue influence on a party which would not otherwise have entered into the settlement agreement;
- It would be contrary to the public policy of the state where enforcement is sought;.
- The subject matter of the dispute is not capable of settlement by mediation under the law of the state where enforcement is sought.
In relation to (v) and (vi), there must be a causal link between the breach by the mediator and the decision of that party to enter into the settlement agreement. The breach must also be of a serious or significant nature. The “serious breach” test is objective and must show the mediator’s misconduct vitiated the consent of the party opposing relief. The Convention’s drafting history suggests that applicable standards could be based on the mediator’s licensing regime, the mediation’s location, or the parties’ agreement. However, if there is a lack of such standards applied at the time of mediation then the competent authority in the state where enforcement is sought cannot apply additional standards on a post-hoc basis.
It is important to note that the grounds for refusing relief under the SCM are permissive i.e. the competent authority has discretion to impose such grounds depending on the specific circumstances of each case. However, the competent authority cannot impose additional requirements that have been specified in the SCM.
1 Article 1 (1).
2 Article 2 (3).
3 See, e.g., interventions of Colombia, Argentina, Israel, and Germany, in UNCITRAL Audio Recordings: Working Group II (Dispute Settlement), 65th Session, Sept. 14, 2016, 14:00-17:00.
4Belarus and Iran application of Article 8(1)(a).
5 Iran application of Article 8(1)(b).
7 Timothy Schnabel, “The Singapore Convention on Mediation: A Framework for the Cross-Border Recognition and Enforcement of Mediated Settlements” (2019) 19 Pepp. Disp. Resol. L.J. 1.
11 Timothy Schnabel, “The Singapore Convention on Mediation: A Framework for the Cross-Border Recognition and Enforcement of Mediated Settlements” (2019) 19 Pepp. Disp. Resol. L.J. 1.