A REVIEW OF THE UNITED NATIONS CONVENTION ON INTERNATIONAL SETTLEMENT AGREEMENTS RESULTING FROM MEDIATION

A. INTRODUCTION

On 7 August 2019, forty-six (46) countries met in Singapore and signed up to the United Nations Convention on International Settlement Agreements Resulting from Mediation ("Singapore Convention on Mediation" or the "Convention").

The Singapore Convention on Mediation seeks to facilitates the cross-border enforcement of international commercial settlement agreement reached through mediation. The Convention establishes a more efficient, harmonized settlement of commercial disputes through mediation that is acceptable to States with different legal, social and economic systems thus contributing to the development of harmonious international economic relations. This new international instrument will complement existing international dispute resolution treaties like the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the Hague Convention on Choice of Court Agreement and the Hague Convention on the Recognition and Enforcement of Foreign Judgment in Civil or Commercial Matters.

A commendable feat by this Convention is that it has global and regional leading economies such as the United States of America, China, Israel, Singapore, Nigeria, South Korea and India as signatories.

B. SALIENT PROVISIONS

1. Scope of Application[1]

The Convention applies to an agreement resulting from mediation and concluded in writing by parties to resolve a commercial dispute ("settlement agreement") which, at the time of its conclusion is international. The internationality of the settlement agreement is to be determined by a conflict of law analysis of the parties and their places of business which must be in different countries subject to a consideration of two factors -

(i) the state in which a substantial part of the obligations under the settlement agreement is performed; or

(ii) the state with which the subject matter of the settlement agreement is most closely connected.

The Convention does not apply to settlement agreements concluded to resolve a dispute arising from transactions engaged in by one of the parties (a consumer) for personal, family or household purposes or employment law. It also does not apply to settlement agreements that have been approved by a court or concluded in the course of proceedings before a court; and that are enforceable as a judgment in the state of that court as well as settlement agreements that have been recorded and are enforceable as an arbitral award.

2. Definitions and General Principles[2]

For purposes of the Convention "mediation" means a process, irrespective of the expression used or the basis upon which the process is carried out, whereby parties attempt to reach an 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 to the dispute.

For the purpose of evaluating if a settlement agreement is within the scope of the Convention, if a party has more than one place of business, the relevant one is that which has the closest relationship to the dispute and if a party does not have a place of business, reference is to be made to the party's habitual residence.

Each Party to the Convention is required to enforce a settlement agreement in accordance with its rules of procedure and under the conditions laid down in the Convention

3. Requirement for Reliance on Settlement Agreements[3]

A party relying on a settlement agreement under this Convention shall supply to the competent authority of the Party to the Convention where relief is sought:

(a) The settlement agreement signed by the parties;

(b) Evidence that the settlement agreement resulted from mediation, such as:

(i) The mediator's signature on the settlement agreement;

(ii) A document signed by the mediator indicating that the mediation was carried out;

(iii) An attestation by the institution that administered the mediation; or

(iv) In the absence of (i), (ii) or (iii) any other evidence acceptable to the competent authority.

The writing and signing requirement of a settlement agreement shall be met in relation to electronic communication, if amongst others, the method is reliable as appropriate for the purpose for which the electronic communication was generated or communicated, in the light of all the circumstances, including any relevant agreement.

There is also a language consideration that if the settlement agreement is not in an official language of the Party to the Convention where relief is sought, the competent authority may request a translation thereof into such language.

The request for relief shall be considered expeditiously by the competent authority.[4]

4. Grounds for refusing to grant relief [5]

The competent authority of the Party to the Convention where relief is sought under article 4 (5) may refuse to grant relief at the request of the party whom the relief is sought only if the party furnishes to the competent authority proof that (a) a party to the settlement agreement was under some incapacity; (b) the settlement agreement sought to be relied upon: - is null and void, inoperative or incapable of being performed under the governing law; is not binding, or is not final, according to its terms; has been subsequently modified; (c) The obligations in the settlement agreement - have been performed; or are not clear or comprehensible; (d) granting relief would be contrary to the terms of the settlement agreement (e) there was a serious breach by the mediator of standards applicable to the mediator or the mediation without which breach that party would not enter the agreement or (f) there was failure by the mediator to disclose to the parties circumstances that raise justifiable doubts as to the mediator's impartiality or independence.

Relief from enforcement may also be refused on grounds of public policy; or the subject matter of the dispute is not capable of settlement by mediation under the law of that Party.

5. Parallel Claims and other treaties[6]

The Convention provides for the adjournment of a decision of the competent authority of the Party to the Convention in application for a relief if such an application or a claim has been made to a court, an arbitral tribunal or any other competent authority.

It should be noted that the Convention will not deprive any interested party of any right it may have to avail itself of a settlement agreement in the manner and to the extent allowed by the law or the treaties of the Party to the Convention where such settlement agreement is sought to be relied upon.

6. Reservations and Effect[7]

A Party to the Convention is free to declare or make reservations that can be withdrawn at any time. The Party's reservation may only include that it will not apply the Convention to settlement agreements to which it is a party or to which any government agencies or any person acting on behalf of a governmental agency and/or it shall apply the Convention only to the extent that the parties to the settlement agreement have agreed to the application of the Convention. Reservations made at the time of signature shall be subject to confirmation upon ratification, acceptance or approval and this shall take effect simultaneously with the entry into force of the Convention in respect of the Party to the Convention.

Any reservation or withdrawal from the Convention shall apply only to settlement agreements concluded after the date when the Convention, reservation or withdrawal thereof enters into force for the Party to the Convention concerned.

7. Participation by Regional Economic Integration Organisations

The Convention allows regional economic integration organization that is constituted by sovereign states and has competence over certain matters governed by the Convention to similarly sign, ratify accept, approve or accede to the Convention and enjoy all the rights and obligations of a Party to the Convention.

8. Other Provisions[8]

There are provisions for a Party to the Convention with two or more territorial units under different legal systems to at the time of signature declare that the Convention is to extend to all of its territorial units or only to one or more.

The Convention also provides for the procedure to be adopted for the amendment of any of its articles. A Party to the Convention is also entitled to denounce the Convention which shall become effective 12 months after the notification is received.

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*Author - Mr. Ikemefuna Stephen Nwoye

                   Principal Chief Counsel - NWOYE (Barrister and Solicitor)

Disclaimer: This paper should not in any way be used as a substitute for legal advice or opinion. The views expressed are personal to the author and do not necessarily reflect the views of any organisation or person that the author is or might have been affiliated to. 

[1] Article 1.

[2] Articles 2 and 3.

[3] Article 4.

[4] Article 4 (5).

[5] Article 5.

[6] Articles 6 and 7.

[7] Article 8.

[8] Articles 13, 15 and 16.