{"id":1123,"date":"2019-11-18T13:54:18","date_gmt":"2019-11-18T13:54:18","guid":{"rendered":"https:\/\/www.jurisasia.com\/?p=1123"},"modified":"2026-02-26T09:13:34","modified_gmt":"2026-02-26T09:13:34","slug":"singapore-convention","status":"publish","type":"post","link":"https:\/\/www.jurisasia.com\/en\/singapore-convention\/","title":{"rendered":"The Singapore Convention"},"content":{"rendered":"
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The Singapore Convention<\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t
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This letter is dedicated to the major event that took place in Asia in August<\/strong> and has global significance: the signing of the \"Singapore Convention\" (United Nations Convention on International Settlement Agreements Resulting from Mediation). As the Convention has already been the subject of numerous commentaries and theoretical analyses, this presentation will focus on the practical perspective of the professional and the specifically Asian angle<\/strong>. The opening of the signatures on August 7, 2019, of the \"Singapore Convention on Mediation<\/strong>,\" according to its official abbreviated title, attracted simultaneous signatures from 46 nations, a record for a United Nations convention in the field of international trade. With five additional countries having since joined the original signatories on September 25 and 26, the number of states committed to respecting the terms of the Convention already stands at 51. This is a positive indicator regarding its chances of entry into force, which could occur six months after ratification by three member states, a goal that seems anything but unrealistic.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Newsletter No. 3 - United Nations Convention on International Settlement Agreements Resulting from Mediation<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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A Convention for Emerging Countries?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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One point immediately catches the eye: among the signatories, there is not a single European state<\/strong>. And not a single \"Western\" country either, with the notable exception of the United States. However, the list is substantial among the \"Greater Asia-Oceania<\/strong>\" countries: Brunei Darussalam, China, Fiji, India, Malaysia, Maldives, Philippines, Republic of Korea, Laos, Samoa, Singapore, and Timor-Leste. It is also extensive with African and Near\/Middle Eastern countries, plus Ukraine and Kazakhstan. One might have expected greater interest from other countries, the very many member states that are signatories to the New York Convention (Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958). In the meantime, we are seeing the emergence of a potential bloc of legislation favourable to mediation, centered around Asia, South America, Africa, and the Gulf States. This should intensify trade relations within and between these regions, rather than between them and the West.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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But where France occupies a unique position<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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France's position, however, is not entirely similar to that of its Western partners or competitors. Indeed, it is the only European country<\/strong>, along with Belgium, Switzerland, Luxembourg, and Hungary, and the only Western country, along with two Canadian states (Nova Scotia and Ontario) and twelve US states (including the District of Columbia but not Delaware), to have adopted a domestic law inspired by the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Conciliation<\/strong>. This is an interesting observation to compare with the list of Asian countries that have done the same, which includes only one state: Malaysia<\/strong>. All that remains is for France to sign the Singapore Convention so that a link can be established between the two countries, with Paris and Kuala Lumpur<\/strong> thus becoming two privileged places<\/strong> for the conduct of commercial mediations<\/strong> between not only Malaysia and France but also all countries<\/strong> qualifying according to the two criteria. If we compare the 51 signatory countries of the Singapore Convention with the 33 countries that used the Model Law as a model, the result is as follows, pending new countries joining the Convention:<\/p>

Benin
Congo
Democratic Republic of the Congo
Gabon
Guinea-Bissau
Honduras
North Macedonia
Malaysia (for the record)
Chad<\/p>

Other countries influenced by the Model Law that are likely to accede to the Convention have some form of connection with France, particularly African countries<\/strong>:<\/p>

Burkina Faso
Cameroon
Guinea
Mali
Niger
Central African Republic
Senegal
Togo<\/p>

Considerable potential therefore lies ahead for France as a major center for international commercial<\/strong> mediation with Asia and Africa and between these continents.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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The benefits of mediation<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The \"Traditional\" Advantages of Mediation<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The most frequently cited advantages<\/strong> of mediation<\/strong> are well known: speed, flexibility, lower cost<\/strong> than arbitration, and, some might say, less risk of being bound by a decision that cannot be appealed and that may be of insufficient quality by one or both parties, even though formally irreproachable according to the criteria of the New York Convention.<\/p>

To this must be added a non-legal argument: a greater chance of preserving the continuity of commercial relations between the parties.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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An additional advantage: flexibility and\u2026<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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...the potential use of \"commercial imagination<\/strong>.\" Guided by a mediator experienced<\/strong> in the relevant industry or trade sector, the parties can agree on a mutually acceptable solution<\/strong> that is not simply the result of comparing the validity of each party's legal arguments, but also a direct path to a settlement that may involve elements external to the dispute<\/strong>, within the framework of a more comprehensive vision of their global commercial or industrial interests<\/strong>. This may involve, while respecting competition rules where applicable, market sharing, or legal instruments such as trademarks in the form of a coexistence agreement. Only mediation allows for this broader, pragmatic approach<\/strong>, and this less frequently cited advantage should not be overlooked. This requires, but is the very foundation of international commercial mediation, the intervention of a mediator familiar with the company<\/strong> in general and the relevant sector<\/strong>: a simple bilateral and head-on negotiation cannot achieve the same level of effectiveness.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

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A more neutral element of comparison than it appears: confidentiality<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Another frequently cited advantage in favour of arbitration over recourse to the courts is confidentiality<\/strong>. However, on the one hand, this is not always a requirement or even a desire of the parties, and on the other hand, it can be guaranteed contractually. Admittedly, in the latter case, a breach of the confidentiality agreement can only be the subject of a claim for compensation under the rules of common law, in a jurisdiction other than that of the settlement agreement if the mediation is international. However, the legislative and regulatory framework for mediation can contribute to respecting confidentiality in countries that have adopted the principles of the UNCITRAL Model Law on International Commercial Conciliation<\/strong> into their domestic law. The Model Law devotes two articles to this topic. Article 9, entitled \u201cConfidentiality<\/strong>,\u201d unequivocally establishes this principle: \u201cUnless otherwise agreed by the parties, all information relating to the conciliation proceedings shall remain confidential, except where disclosure is required by law or is necessary for the implementation or enforcement of the agreement resulting from the conciliation.\u201d Article 10, \u201cAdmissibility of Evidence in Other Proceedings,<\/strong>\u201d<\/p>

Prohibits a party, the \u201cconciliator\u201d (which includes the mediator in the Model Law\u2019s phraseology), and any person \u201cassociated with the administration of the conciliation proceedings\u201d or \u201cother third parties\u201d (who may be witnesses or experts) from relying on or presenting in any arbitral or judicial proceeding any information (according to a specific list) exchanged or disclosed during the mediation; Provides that disclosure cannot be ordered by an arbitral tribunal, a state court, or any other competent authority, and that such information, if presented in contradiction to this principle, is inadmissible.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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The weaknesses of International Commercial Mediation<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Mediation has two well-known drawbacks as a method of final dispute resolution.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

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A widely highlighted weakness\u2026<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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...is that it cannot be concluded without the agreement of both parties and that it is not binding. The parties, in fact, are under no obligation to adhere to the mediator's recommendation. This is exactly the opposite of the advantage\/disadvantage of arbitration. As such, it can be considered that both avenues are of equal value, and that the choice between the two depends on the informed preference (if possible) of the parties.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

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\nBut the obstacle remains\u2026\n<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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...of the enforcement of the transaction<\/strong>, which follows the rule of contract enforcement. This may not be a serious drawback in the case of domestic mediation, but it is different in international mediation, where the parties, and especially their assets, may be located in a jurisdiction different from that of the place where the transaction was concluded.<\/p>

As things currently stand, the party affected by the non-performance of a transaction in another state has no other recourse than to bring an action for breach of a contractual obligation<\/strong>, which requires obtaining a judgment in a jurisdiction other than their own and having it enforced.<\/p>

It is this flaw in the mediation mechanism that largely makes arbitration the default option in most international contracts.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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The Lack of Finality of Mediation<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Unlike an arbitration award, a settlement agreement does not necessarily mean the end of the conflict<\/strong>. The issue does not arise if the parties spontaneously execute the settlement agreement, which is not uncommon in business practice, where corporate managers are often \"relieved\" to no longer have to devote managerial time to a case (and pay legal fees). However, there remains the risk, and it is not merely theoretical, of the other party's unwillingness to comply with the settlement agreement. This can occur due to resistance from certain internal departments, organizational changes, etc., and even, in some cases, outright dishonesty. It is then that the additional step of enforcement in another jurisdiction based on an agreement whose sole value is that of any other contract becomes a real problem. In more complex situations, it may happen that a party having waived certain rights in a settlement agreement seeks recognition of those rights in separate arbitration or judicial proceedings in a jurisdiction<\/strong> other than the one where the agreement was entered into. This may be for the same reasons as above, or due to a change in business strategy. In such cases, the bona fide signatory to a settlement agreement cannot automatically refuse this action but must prove the validity<\/strong> of the settlement agreement before the jurisdiction where enforcement is sought, which is not necessarily their own but may be the one where they have significant assets.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

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The contribution of the Singapore Convention is decisive, and addresses both of these aspects.<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Under the Convention, the signatory countries and their courts undertake to recognise and enforce the settlement agreement<\/strong> (or \"settlement agreement\" in the Convention's phraseology) without any examination of the merits<\/strong> or, a fortiori, the requirement for a new action. Consequently, it is also possible to request any interim measures or specific performance<\/strong> of commitments before the courts of the place of enforcement.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

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The Singapore Convention allows:<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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