THE GIST with DRC!
THE SINGAPORE CONVENTION ON MEDIATION: LESSONS AND PROSPECTS
A Paper Presented BY:
AGADA ELACHI Ph.D. FICMC, FCIArb (UK)
At the Institute of Chartered Mediators and Conciliators (ICMC) ADR Conference held in Abuja on 3rd December 2019.
PROTOCOLS AND INTRODUCTION
Let me adopt the protocols as set out by the Master of Ceremonies. I will like to place on record my gratitude to the leadership of the Institute and the planning committee for this conference, for the opportunity to speak on this very topical issue at such an auspicious occasion as this one. It is my sincere hope that this brief exposé on the subject will contribute to the knowledge out there and that it will incentivize this distinguished assembly of practitioners and stakeholders to promote mediation across the region and globally.
In December 2018, the United Nations General Assembly adopted, by consensus, the United Nations Convention on International Settlement Agreements Resulting from Mediation, and recommended that the Convention be known as the “Singapore Convention on Mediation” (the “Singapore Convention” or “Convention”), and authorized the signing ceremony of the Convention to be held in Singapore on 7 August 2019.
The essence of the Singapore Convention is to promote mediation as mechanism for resolution of commercial disputes, and facilitate international trade and commerce by enabling disputing parties to easily enforce and invoke settlement agreements across borders. Businesses will benefit from mediation as an additional dispute resolution option to litigation and arbitration in settling cross-border disputes.
Definition of mediation under the Convention
The convention defines mediation in Article 2(3) as a process: “to reach amicable settlement of their dispute with the assistance of a third person or persons (‘the mediator’) lacking the authority to impose a solution upon the parties”. This definition is very broad and all encompassing and deliberately so. The intention is to ensure that the flexibility that mediation is known for is safeguarded in the convention and its application. Thus, where a process fits this description, even if it is not referred to, as “mediation” a settlement from such process will qualify. It is also worthy of note that the convention does not provide any restrictions as to who may be mediator or whether it must be conducted under the auspices of an institution.
Pre-Advent of the Singapore convention
UNCITRAL developed the Model Law on International Commercial Conciliation (2002 Model Law) in 2002. The 2018 Model Law sought to revise this, primarily by replacing the term “conciliation” with “mediation”. It is recognized that the terms ‘mediation’ and ‘mediator’ were more widely used and changing the terminology would make it easier to promote and enhance the visibility of the Convention and Model Law. This simply means that the only substantive change between the Model Law of International Commercial Conciliation (2002) and the 2018 Model law, which is now known as the Singapore convention, is a change of nomenclature that prefers Mediation to Conciliation because it is of wider acceptance and usage.
Mediation Agreement Enforcement Experience Before Singapore Convention
Until the introduction of the Singapore Convention, an often-cited challenge to the use of mediation was the lack of an efficient and harmonized framework for cross- border enforcement of settlement agreements resulting from mediation. It was in response to this need that the Singapore Convention was developed and adopted by the United Nations. The convention is to mediation what the New York Convention 1958 is to International Commercial Arbitration. It is pertinent to point out that even in domestic mediation practice, the issue of enforcement of agreements has always been a challenge. The establishment of multi-door houses and the process of endorsing agreements by the ADR Judge, giving it the force of a court judgment has to a large extent gone a long way to promote the use of mediation domestically.
The Primary Goals of the Convention
• Facilitate international trade; and
• Promote the use of mediation for the resolution of cross-border commercial
What is the Singapore Convention on Mediation?
The Singapore Convention applies to international settlement agreements resulting from mediation, concluded by parties to resolve a commercial dispute. It provides an efficient and harmonized framework for the enforcement of international settlement agreements resulting from mediation and for allowing parties to invoke such agreements.
The Singapore Convention has been designed to become an essential instrument in the facilitation of international trade and in the promotion of mediation as an alternative and effective method of resolving trade disputes. It ensures that a settlement reached by parties becomes binding and enforceable in accordance with a simplified and streamlined procedure. It thereby contributes to strengthening access to justice and the rule of law.
When will it come into effect?
According to Article 14 of the United Nations Convention on International Settlement Agreements Resulting from Mediation, the convention comes into effect six months after 3 countries have ratified, approved, or acceded to the convention. It is worthy of note that 46 countries were signatories to the convention on the day signing ceremony held.
The Convention applies to “international agreements that result from mediation”
and are concluded “in writing” by parties to resolve a “commercial dispute”. The Convention excludes settlement agreements which:
a) have been approved by a court or have been concluded in the course of court proceedings;
b) are enforceable as a judgment in a court of that state;
c) that have been recorded and are enforceable as an arbitral award.
The rationale for these exceptions lie in the fact that there are other widely accepted international instruments such as the New York Convention and the Hague Convention on the Choice of Court Agreements that specifically govern those types of settlement agreements.
The Singapore Convention will focus on circumstances where these other instruments are not applicable.
Mode of Enforcement
The Convention provides flexibility and autonomy to the State Parties in not prescribing a specific mode of enforcement. Instead it lists conditions to be fulfilled in order for a State to enforce a settlement agreement under the Convention. i.e.
– “in accordance with its rules of procedure, and – under the conditions laid down in this Convention, in order to prove that the matter has been already resolved”.
According to Article 4, a party relying on a settlement agreement shall supply to the competent authority of the State where relief is sought, the following:
(a) The signed settlement agreement; and
(b) Evidence that the settlement resulted from mediation.
To qualify as a settlement resulting from mediation, it should include the mediator’s signature on the settlement agreement, or document signed by the mediator confirming the mediation was carried out, or an attestation by the institution administering the mediation or any other evidence acceptable to the competent authority. The convention grants the competent authority of the State Party the autonomy to decide what evidence is acceptable.
Exceptions to enforcement/Grounds for refusing enforcement.
The courts of a Party to the Convention may refuse to grant relief on the grounds laid down in the Convention, including:
• If a party to the settlement agreement was under incapacity (bankruptcy, economic recession?).
• The settlement agreement is not clear or comprehensible
• If the settlement agreement is not binding, null and void, inoperative or
incapable of being performed under the law, which it is subjected to.
• If there were serious breaches by the mediator of standards applicable to the mediator, without which breach that party would not have entered into the settlement agreement.
• Failure by the mediator to disclose circumstances relevant to the mediator’s impartiality or independence.
• If granting relief would be contrary to the public policy of that Party.
The penultimate and last grounds, relating to mediator conduct, align with Articles 5(4), 5(5) and 6(3) of the 2002 Model Law on International Commercial Conciliation.
In addition, pursuant to Article 5(2), relief may be refused where it is “contrary to the public policy” of the State in which enforcement is sought or the “subject matter of the dispute is not capable of settlement by mediation under the law of that State”.
Unlike the New York Convention (which does not specifically address reservations), the Singapore Convention expressly permits a number of reservations including in relation to whether or not the Convention would apply to the government of signatory state (Article 8).
Parties may expressly opt-out or opt-in.
Another exception to enforcement is the ability for parties to opt-out. Article 5 (1)(d) provides for this. The rationale here is in keeping with the right of parties to protest against a settlement agreement that does not express their clear wishes or that the relief sought is contrary to the terms of the settlement agreement.
A key distinctive feature of the Convention is the ability of a state party who is a signatory to make a reservation that the Convention will apply only to the extent that the parties to the settlement agreement have agreed to apply it. The consequence of such reservation is that parties of the signatory state may exercise the option to opt-in with respect to the enforceability or otherwise of the settlement agreement. The convention is not explicit on what the procedure for opt-in will be. It is my humble view that certain standards of practice will develop with time.
How does it affect Trade conflict & improve investments in Nigeria & Africa
As a nation state, this convention coming into effect holds great potentials for us. It provides for government and business entities out of Nigeria, an opportunity to engage in and utilize another mechanism for resolution of international commercial transactions without necessarily resorting to arbitration.
Nigeria has not managed its international disputes well and it would appear that we are always holding the wrong end of the stick. The resort to arbitration has many times led to awards that are not only punitive in nature but which threaten our financial well being. Mediation as mechanism for resolution of such disputes will set the stage for a greater say in the resolutions arrived at by all parties and also lead to greater compliance.
Where enforcement becomes necessary under the convention, there are safety nets that avail the disputing parties, which are not apparent within the framework of public or private international law (opt-out or opt-in).
How will it promote the Professional practice of Mediation in Nigeria & Internationally?
The signing of the Singapore convention presents an opportunity that all practitioners should as a matter of urgency embrace. There is lot of international trade being currently promoted and nation states are looking to expand their horizons. Our own dear country Nigeria is not left out as we see from the efforts being put into wooing investors by the current government.
A fall out of such heightened commercial activities will be trade disputes. The Ajaokuta Steel Company dispute and the related arbitration and court processes is a case in point. I dare say that mediation would be a more effective way of resolving that impasse. Thus, the Nigerian mediator must be ready to sharpen their skills and take on the world. Opportunity knocks. Please take time to familiarize yourself with the convention.
The Convention is significant as it facilitates, for the first time, the enforcement of international commercial settlement agreements resulting from mediation. It is a welcome development, as it will set the stage for practitioners and users to deploy mediation more frequently. Nigeria as a nation must not only sign onto the convention, but we must accept and ratify it, and incorporate it into our legal framework as this will boost confidence in would-be-investors that Nigeria is a safe destination to engage in commercial transactions.
The success of the convention will depend on how many countries sign on to it and ratify and accept it into their legal framework. A direct consequence as stated earlier will be the growth of commerce due to confidence that where a party to a mediated settlement fails to comply, enforcement can be achieved in an efficient and effective manner under the convention by going after the assets of the defaulting party in a convention country.
Another major consequence will be the raising of ethical standards. There will emerge a body of guidelines, which will seek to regulate mediator’s conduct and guide against misconduct. We must not be found wanting. This will boost great confidence in the process of mediation, in our institute, and our country.
Thank you for your kind attention.