ReSolution Issue 21, June 2019 | Page 22

The Singapore Mediation Convention: a panacea for trade in the Trans-Pacific Region or just one piece of the puzzle?

By Catherine Green

Part One: An Introduction

The important correlation between private dispute resolution and cross-border trade and investment is not new to those engaged in either international law or international trade and commerce. However, recent developments in international law, with the United Nations Commission on International Trade Law (UNCITRAL) approving the final draft of the Convention on International Settlement Agreements Resulting from Mediation and its associated Model Law (the Singapore Convention), have brought this topic to the fore once again.
The Singapore Convention provides an effective mechanism for the enforcement of mediated settlement agreements in the international commercial arena, adopting the same approach as the highly successful New York Arbitration Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention), which was concluded in 1958. The New York Convention has been lauded as one of the most successful treaties in the area of commercial law to date.
Over the course of six articles, of which this is the first, I intend to provide an introduction to the Singapore Convention before exploring the question whether becoming signatories to the Singapore Convention would be a positive development for states located within the Trans-Pacific region – with a specific focus on Pacific Island nation states.
In overview, it is certainly more than arguable that accession to the Singapore Convention would promote and underpin greater cross-border trade, commerce, investment and sustainable economic development and growth in the region. It would do this by helping to address one of the significant barriers to foreign investment in the Trans-Pacific; namely, the perceived risk of any disputes arising out of commercial relations in the region being determined by local courts, with any judgment then to be enforced in the ordinary way which can be costly, time-consuming and uncertain.
However, it is my view that the Singapore Convention is only one piece of the puzzle. The non- binding nature of mediation does not provide enough certainty to potential investors looking to engage in commercial projects taking place within the Trans-Pacific Region; parties are under no obligation to conclude a binding settlement agreement as a result of electing to participate in mediation. Foreign investors’ needs can only fully be met when they can be satisfied that they can also achieve finality regarding any commercial dispute without recourse to litigation in the local courts. As such, arbitration (within the scheme of the New York Convention) needs to be available as a backstop where mediation fails to result in a legally binding (and enforceable) settlement agreement.
Nevertheless, the importance of the Singapore Convention to the overall picture is not diminished, as mediation provides access to additional and important benefits which arbitration under the New York Convention is simply unable to deliver, at least not as successfully as mediation might.
To look at this question in more detail, Part Two of this series will consider the ‘Trans-Pacific' experience and why the question of accession needs to be considered taking into account the specific characteristics of the constituent member states within that region. Parts Three to Five of this