A total of 46 countries, including the United States, China, India and South Korea have signed the United Nations (UN) Convention on International Settlement Agreements Resulting from Mediation after it opened for signatures on Aug. 7.

Adopted by the United Nations General Assembly on December 2018, the treaty will provide for the enforcement of mediated settlement agreements across countries. Singapore was the first country to sign it.

The Singapore Convention on Mediation seeks to ensure that international commercial settlement agreements will be recognised by the courts of the signatory countries. Courts will either enforce or allow a party to invoke the agreement to prove that the matter has already been resolved. 

According to a statement by Singapore’s Ministry of Law, the Singapore Convention on Mediation will strengthen the international dispute resolution framework, provide businesses greater certainty and assurance and help facilitate international trade and commerce. It is the first UN treaty to be named after Singapore.

Lawyers applauded the signing of the treaty as a sign that mediation is here to stay.

“The ratification of the Singapore Convention on Mediation is undoubtedly an exciting development in the international commercial dispute resolution space, and marks the growing popularity of more practical, faster and cost-effective alternatives to the often costly and protracted procedures of arbitration and court litigation,” said Paul Aston, a partner at HFW. “It is also a testament to the hard work and resources that Singapore has put in to developing itself as a global hub for commercial dispute resolution.”

“It is recognised that mediation will only flourish where there is both judicial and governmental support, and Singapore has the support of both. Mediation has long been popular in jurisdictions such as the UK and the U.S., but it is only recently that it has garnered popularity elsewhere, particularly in Asia. A historic lack of institutional support has led to the development of a wide disparity in approaches to mediation throughout the region (and indeed, globally),” Aston added.

Kohe Hasan, a partner at Reed Smith, said that being a signatory to the Singapore Convention on Mediation would be of benefit to Southeast Asian countries such as Indonesia. “By guaranteeing the enforceability of mediated settlement agreements, foreign businesses interested in getting into business with their Indonesian counterparts would be provided with the assurance that, in the event of dispute, they would be able to resolve the matter amicably by way of mediation and that the results of the mediation would be respected by all involved,” she noted. 

“Being a signatory to the Convention would also encourage more Indonesian businesses to utilise mediation as a mode of dispute resolution and this is in line with Indonesian/Javanese values and culture,” Hasan noted.

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