46 countries sign the new Singapore Convention on mediated settlements

The Singapore Convention, more formally known as the United Nations Convention on International Settlement Agreements Resulting from Mediation, was signed today in Singapore by 46 countries - a record number of first-day signatories for a UN trade convention.

While not including the UK or any EU countries, the signatories do include the world's two largest economies, China and the US. It will come into force six months after at least three signatory states have formally ratified it.

The aim of the Convention is to establish an international regime for the enforcement of settlement agreements reached through mediation, broadly akin to the 1958 New York Convention for the enforcement of arbitral awards. States who ratify it (and their courts) will recognise and enforce the terms of international mediated settlements where, for example, a party refuses to comply with the settlement or attempts to re-litigate the dispute before the courts.

The initiative stems from a concern that the use of mediation to resolve international disputes has been impeded by the fact that, unless a settlement reached via mediation is in the context of a pending arbitration and can be converted into an arbitral award,  parties can only enforce it in the same way as any other contract. In an international context, this can involve potentially difficult (and often lengthy) processes to obtain a court judgment and then enforce it in a foreign jurisdiction.

In practice, enforcement of mediated settlements is rarely an issue (at least compared to judgments and arbitral awards) given that the terms are the result of a negotiated resolution reached through a voluntary process.  Nevertheless, the reassurance that would be provided by a widely adopted global enforcement regime should greatly increase the attraction of mediation as a reliable option for resolving cross-border commercial disputes.   Many hope that it will achieve for mediation what the New York Convention has for international arbitration.

For more on the Convention (including a full list of the initial signatories), see the post on our ADR blog,  ADR Notes.