INGENIEUR
INGENIEUR
“ institutional ”, or “ contractual ” types . Neither does any provision of the Mediation Act 2012 (“ MA 2012 ”) furnish any assistance for the enforceability by the courts of settlement agreements reached through such types of mediations which are on par with Section 14 ( 2 ) MA 2012 for CBMs . All that the MA 2012 vide Sections 13 ( 1 ) to ( 3 ) states is that upon the conclusion of the mediation and the reaching of an agreement by the parties regarding a dispute , the parties shall enter into a settlement agreement which shall be in writing , signed by the parties and authenticated by the mediator . Once the above is satisfactorily undertaken , then , by virtue of Section 14 ( 1 ), the settlement agreement shall be binding on the parties .
In practice , many a time , difficulties in the enforcement of such settlement agreements often arise notwithstanding the fact that these are recognised as “ binding ” under Section 14 ( 1 ) of the MA 2012 . The said difficulties may be due to a number of reasons , such as , where a party has a change of mind or an after-thought or has realised that it does not have the means to comply or external pressure from third parties bear on the party not to comply with the terms of the settlement agreement . These may lead a party to not honour the settlement agreement and / or breach its material terms . Under such circumstances , the only legal option available to the other party would be to commence an action against the non-compliant party in court for the breach of the terms of the settlement agreement , thereby rendering the entire mediation process futile and a sheer waste of effort , time and expense . Another significant setback often faced in international mediations is that there is a lack of cross-border enforceability of the settlement agreements , unlike arbitrations under the New York Convention 1958 ( NYC ).
For non-CBMs , the situation vis-à-vis the enforceability of settlement agreements , especially in the face of non-compliance and / or breaches of the material terms of the said agreement , seems dire . Repeated efforts have been made by the local mediation community to engage with and educate parties , in particular , the “ dominant ” or “ powerful ” ones , to honour settlement agreements so as to give effect to “ win-win ” solutions based on “ common interests ” instead of a “ zero-sum game ” premised on merely a “ rights-based ” approach which seems to be prevalent at this time . Notwithstanding the above , these efforts have shown little success in the face of a lack of interest and commitment on the part of the “ dominant / powerful ” parties who have exhibited a general reluctance to change their positions or mitigate the adverse culture of non-compliance . Under such circumstances , over and above such efforts , more immediate and effective approaches need to be formulated and implemented to ensure that the mediation process will be effective and , more importantly , that settlement agreements reached can be readily and effectively enforced . The good news is that there appears to be some light at the end of the tunnel .
In the case of the cross-border enforcement of international settlement agreements of a commercial nature resulting from mediations , this can be effected by the competent authority of a party state of the Singapore Convention on Mediation 2019 ( SCM ) under the rules of procedure and the conditions set out in the SCM . Although Malaysia is a signatory to the SCM , it has still not been ratified by Malaysia . It is earnestly hoped that ratification will be undertaken in the near future to ensure that local disputants can enjoy the benefits proffered by the SCM which encompass principally settlement agreements resulting from mediations undertaken both locally as well as internationally that could be enforced cross-border so long as these settlement agreements fall under Art . 1 ( 1 ) of the SCM and are not excluded vide Art . 1 ( 3 )( b ) and / or Art . 5 ( 1 ) of the SCM .
A further recent development has been the introduction on the local scene of the Med-Arb procedure for which there are rules provided by the Asian International Arbitration Centre ( AIAC ) and Borneo International Centre for Arbitration ( BICAM ). Under this procedure , a dispute is referred by the disputants to mediation first , and if the parties are able to achieve a settlement , the settlement agreement is recorded as a consent award . As a consent award , the settlement agreement achieves the status of an arbitration award which makes it enforceable by the local courts under the Arbitration Act 2005 , or crossborder in countries which are signatories to the NYC . For parties to take advantage of the Med-
22 VOL 98 APRIL - JUNE 2024