Paper presented at the AfAA 2nd Annual International Arbitration Conference, 15th - 16th April 2021.
The challenge of mediation as a dispute resolution mechanism has always been in the inability to enforce the agreements that flow from the mediation process in the event of non-compliance by parties. In some circumstances, accepting to and engaging the process of mediation is confronted by this singular challenge from the outset. This concern is particularly heightened with respect to commercial mediation.
To address this challenge in the context of disputes within national borders, many countries, Nigeria in particular have addressed this challenge using the ADR Judge within the framework of the Multi-door courthouse. Thus, there exists a legal framework for enforcement of mediation agreements. Internationally however, prior to the Singapore convention, there was no legal regime or framework under international public or private law for enforcing mediation agreements.
The Singapore convention offers that opportunity and hopefully will embolden users to engage the process of mediation for their international commercial transactions. I intend to x-ray the provisions of the convention from the perspective of its operation in the light of the willingness of parties particularly state - parties to adopt the convention by signing on to the treaty and engage in the process.
This presentation shall also focus on the implications of the convention for nation states especially as it relates to the crossroads between this convention and the domestic framework for dispute resolution.
BACKGROUND TO 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 was 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 meant 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.
In December 2018, the United Nations General Assembly adopted, by consensus, the United Nations Convention on International Settlement of 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.
Until the introduction of the Singapore Convention, an often-cited challenge to the use of mediation in international trade and commerce 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 to promote mediation as a 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. This Convention is to Mediation what the New York Convention 1958 is to International Commercial Arbitration.
WHAT IS THE SINGAPORE CONVENTION?
The Convention is designed as an efficient and harmonized framework for the facilitation of international settlement agreements resulting from mediation, by ensuring that settlements reached by parties become binding and enforceable in accordance with a simplified and streamlined procedure. The mediated international agreements must be concluded “in writing”. The Convention however, 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; and
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 nature of Court judgments that specifically govern those types of settlement agreements.
The Singapore Convention will focus on circumstances where these other instruments are not applicable. It thereby contributes to strengthening access to justice and the rule of law, and provides an option, which speaks to the peculiar needs of disputing parties.
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 broad and deliberately encompassing to ensure that the flexibility that mediation is known for is safeguarded by the convention and its application. The import is this, any process fits this description, and even where not referred to as “mediation,” a settlement from such process will qualify as mediation for the purpose of the convention.
It is noteworthy that the convention does not provide any restrictions as to a person who may be a mediator, the qualification if any they must have, or whether it must be conducted under the auspices of an institution. This in my humble opinion is good as it safeguards the flexibility that mediation is popular for. The primary goals of the Convention are to facilitate international trade and promote the use of mediation for the resolution of cross-border commercial disputes.
The Convention provides flexibility and autonomy to the State Parties by listing conditions to be fulfilled in order for a State to enforce a settlement agreement under the Convention rather than prescribing a specific mode of enforcement. This flexibility and autonomy is demonstrated in the provision as follows:
- “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 –
a) The signed settlement agreement; and
b) Evidence that the settlement resulted from mediation.
The competent authority of the state is not defined in the convention, but it is presumed that the competent authority of the state in such a circumstance would be the national courts of the state. Thus, the national courts of the state have a very important role to play in the scheme of things. It is pertinent in that regard to ensure that Judges who man these national courts are provided the requisite training on the application of the convention.
To qualify as a settlement resulting from mediation, such settlement should include the mediator’s signature on the 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 deemed acceptable to the competent authority.
The convention grants the competent authority of the State Party the autonomy to decide what evidence of the conduct of mediation in keeping with the conditions prescribed is acceptable. The Courts of a State 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 last two grounds except the ground on public policy, relating to mediator conduct, align with Articles 5(4), 5(5) and 6(3) of the 2002 Model Law on International Commercial Conciliation. Of note or particular concern would be the standard by which the mediator’s conduct is assessed. In some countries, a particular behaviour may be acceptable whilst in others that may not be the case. This scenario supports my proposition that cultural nuances play a role in international mediation and more attention need be paid to such nuances.
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”.
This presents a challenge as it leaves the national courts with very wide discretion as to what amounts to public policy or subject not capable of resolution via mediation. In some countries, issues of title to land and declaration thereof are not subjectable to mediation or settlement agreements but must be resolved by the courts. This creates a basis for subjectivity in the application of an international convention.
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 states (Article 8).
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.
The Convention coming into effect holds great potential for us. The word ‘coming’ is used because 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.
Many African countries, Nigeria in particular have not managed their 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. This Convention no doubt provides for government and business entities out of Africa, an opportunity to engage in and utilize another mechanism for resolution of international commercial transactions without necessarily resorting to arbitration.
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, as 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).
The signing of the Singapore convention presents an opportunity that all practitioners should as a matter of urgency embrace. There is a 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.
Worthy of mention is 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 African 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, and indeed a game changer as it will set the stage for practitioners and users to deploy mediation more frequently. Africa as a continent must not only sign onto the convention, it must accept and ratify it, and incorporate it into the legal framework of nation states. This will boost confidence in would-be-investors that Africa 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.
*Managing Partner, Greenfield Chambers