On 7 August 2019, the United Nations Convention on International Settlement Agreements Resulting from Mediation (the “Singapore Convention”) was signed by 46 countries, including the USA and China. The Singapore Convention will enable courts in acceding states to directly enforce international settlement agreements arising out of mediation, in a manner similar to that which the New York Convention provides for arbitration. It will, therefore, potentially address one of the main concerns that has historically deterred parties to cross-border agreements from engaging in mediation to resolve their disputes.
Mediation in international disputes
While mediation is a well-utilized means of settling domestic disputes, it is less commonly used in the context of international dispute resolution. According to a 2014 survey conducted by the International Mediation Institute, this reluctance is partly due to a perception that, should enforcement proceedings arise from a settlement agreement between entities in two or more countries, the enforcement process will be costly, time-consuming and difficult to navigate. This is largely because the parties will first have to obtain a judgment or arbitral award in accordance with the terms of the dispute resolution clause in the settlement agreement, and then seek to enforce that judgment or award in the jurisdiction in which the paying party has assets.
The United Nations has sought to address those concerns by providing a clear-cut, harmonized legal framework through which acceding states may invoke and directly enforce settlement agreements arising from mediation in the event of non-compliance. The expectation is that this will promote both international trade and the use of mediation to resolve international trade disputes.