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Knowledge Highlights 26 July 2024
On 4 February 2020, the Singapore Convention on Mediation Bill (“Bill”) was passed in Parliament. Its provisions have yet to come into effect.
The Bill implements the United Nations Convention on International Settlement Agreements Resulting from Mediation (also known as the Singapore Convention on Mediation) (“Convention”). The Convention, which is reproduced in the Schedule of the Bill, is an international treaty on mediation that addresses the need for an effective means to enforce cross-border commercial mediated settlement agreements. The Convention was opened for signature in Singapore on 7 August 2019.
Senior Minister of State for Law, Edwin Tong, SC (“SMS Tong”) noted in his second reading speech that as part of Singapore’s efforts to strengthen its dispute resolution ecosystem, the country has invested in the development of international commercial mediation by building up institutions, developing capabilities and updating laws.
The ability to enforce a settlement agreement will promote mediation as a method of settling cross-border disputes, as it addresses a key hindrance to mediation. Mediation is rising in popularity as a means to resolve cross-border commercial disputes but its growth has been hampered by the difficulty a party can face in ensuring compliance with a mediated settlement agreement. The Convention, in enabling the enforcement of such settlement agreements, provides the “missing piece” in the international dispute resolution enforcement framework, which includes the Hague Convention on Choice of Court Agreements for litigation, and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards for arbitration.
Key features of the Bill
The Bill relates to the cross-border enforcement of mediated settlement agreements and the invocation of such agreements as a defence. In other words, as SMS Tong explained, if a party chooses to act and bring a claim in breach of a prior mediated settlement agreement to which the claim applies, then the agreement can also be invoked as a defence.
Scope of the Bill
The Bill applies to international settlement agreements resulting from mediation and concluded by parties to resolve a commercial dispute. A settlement agreement is considered “international” where:
The Bill does not apply to settlement agreements that have been approved by a court or concluded in the course of court proceedings and are enforceable as judgments. It also does not apply to settlement agreements that have been recorded and are enforceable as an arbitral award. Also excluded from the remit of the Bill are agreements relating to certain subject matters such as family, inheritance and employment law.
Enforcing or invoking settlement agreements
The Bill provides a range of options for parties seeking to enforce or invoke their settlement agreements in Singapore under the Convention.
Parties can apply to the High Court to record a settlement agreement as an order of court which can be used for enforcement or as a defence. SMS Tong notes that this procedure and framework is similar to the enforcement of awards under the International Arbitration Act. The court order does not extinguish the underlying mediated settlement agreement, leaving it open to parties to use it to seek enforcement or invocation in another country party to the Convention. Parties’ legal rights and remedies existing outside the Convention will also be preserved (for example, reliance on contractual principles to enforce or invoke the settlement agreement).
Refusal to grant relief
The court may refuse to grant relief under the following circumstances:
Where a settlement agreement has been recorded as an order of court, a party is also able to apply to set aside the court order under grounds set out in the Bill.
Reference materials
The following materials are available on the Parliament website www.parliament.gov.sg and the Ministry of Law website www.mlaw.gov.sg: