So-called 'alternative' dispute resolution procedures, such as mediation, are increasingly becoming less 'alternative'. We have previously blogged on the proposed Mediation (Scotland) Bill, the consultation on which has recently closed. In addition to increasing use domestically, it is often used as a means of settling international disputes.
In light of its increasing use, and use internationally, on 7 August 2019 state delegates met in Singapore for The United Nations Convention of International Settlement Agreements Resulting from Mediation ("the Singapore Convention").
What does the Singapore Convention provide for?
The Convention provides the mediation equivalent to The New York Convention, which has been in force since 1958. It seeks to allow settlements reached through mediation to be directly enforced across borders.
Prior to the Singapore Convention, and still for those states not party to the Convention, a mediated settlement agreement is enforced as a contract. This requires parties to go through the courts, obtain a judgment and enforce that judgment. Under the Convention, parties can go directly to the court in the country where the enforcement is sought and the court must enforce the settlement.
What is the UK's position?
Despite the Convention having the highest number of first-day signatories of any UN trade agreement to date, with 46 states currently signed up, the UK, along with the rest of the EU, was absent from the Singapore signing ceremony.
The reason for this is not, per se, that the Convention is not supported by these states - indeed the UK played a role in drafting its provisions - but that the EU has not determined if signing the Convention is a matter for it or for the individual states of which it is made up.
Currently, the UK mediation agreements are supported by the EU Mediation Directive (Directive 2008/52/EC). This provides for the recognition and enforcement of mediated settlements within the EU - meaning if an agreement is recognised and enforced in one country, it will be recognised and enforced in any other Member State. However, following Brexit (either immediately in a 'no deal' scenario or after a transition period) this reciprocity would no longer apply unless there was an agreement to continue it.
What does the UK's absence from the Singapore Convention mean?
The UK's absence from the Singapore Convention may affect UK companies doing business internationally, with businesses potentially considering the UK less inviting as a place to do business due to a potential lack of efficiency in enforcing any mediation settlement. It may also lead to a move away from London's current status as the preferred seat for international dispute resolution.
Nonetheless, the fact the UK did not sign at this stage is a result of decisions to be made at EU level, so the UK could potentially sign the Singapore Convention shortly after Brexit (or after a transition period) on the basis that the EU's decision on whether or not to sign will no longer be relevant to the UK. If both the UK and the EU (or its individual member states) were to sign then the Convention may serve as a substitute for the current intra-EU arrangements, smoothing out one potential consequence of Brexit, The Ministry of Justice has announced that it will keep the decision on whether to join the Convention under review.
What does this mean for mediation?
The Singapore Convention is a positive move for supporters of alternative dispute resolution. The large number of states that signed up to the Convention on the first day signifies international support for mediation.
In reality, a party failing to honour a negotiated, mediated settlement agreement is rare. By their very nature they are agreed, and therefore, generally accepted. It may therefore be that a lack of an enforcement mechanism has less effect in reality. However, states are obviously seeing mediation as an important means of dispute resolution. It is hoped that the Convention provides confidence in the mediation process, as well as putting it on the world stage, once and for all.
