UN members yesterday signed the Singapore Convention on Mediation, an agreement that it hopes will make it easier to settle cross-border commercial disputes and stabilize trade relationships.
The UN Convention on International Settlement Agreements Resulting from Mediation, its official title, was signed in Singapore by 46 UN members, including the US and China.
The aim is to have a global framework that would give businesses greater confidence to settle international disputes through mediation rather than taking them to court, which can be obstructively time consuming and expensive.
“This will help advance international trade, commerce and investment,” Singaporean Prime Minister Lee Hsien Loong (李顯龍) said at the signing ceremony. “Today, a group of states have come together to recommit ourselves to multilateralism and to declare that we remain open for business.”
Mediation is already used to settle commercial disputes in jurisdictions like the US and the UK, but it is not globally accepted.
It is hoped that the convention will improve the credibility of mediation.
“Uncertainty surrounding the enforcement of settlement agreements had been the main obstacle of the greater use of mediation,” UN Assistant Secretary-General for Legal Affairs Stephen Mathias said.
“The convention sets the standards for enforcing and invoking settlement agreements, the requirements for reliance on settlement agreements and the grounds for refusing to grant relief,” he said.
The naming of the convention was a coup for tiny Singapore, a city-state home to more than 130 foreign law firms that is vying to be an international legal hub as the number of commercial cross-border disputes rise.