The government's announcement on 2 March 2023 that it will seek to join the Singapore Convention on Mediation is welcome news.
Mediation is a well-established process for settling commercial disputes and is widely used. The parties appoint an independent mediator who acts as a facilitator helping the parties to find settlement terms, all carried out in a confidential environment and on a without prejudice basis. The success rates claimed for mediation are impressive, the Centre for Effective Dispute Resolution (CEDR) says 93% of commercial cases in 2020 settled on the day or shortly afterwards. The courts have long encouraged commercial parties to litigation to seek to settle their disputes in mediation, backed up with costs sanctions for unreasonable refusals to mediate.
The issue which the Singapore Convention (or United Nations Convention on International Settlement Agreements Resulting from Mediation, as it is formally known) addresses, is to provide a mechanism for the enforcement of agreements reached in mediation of international commercial disputes. If a settlement agreement meets certain criteria, then its terms will be as enforceable internationally as though it had resulted from a court judgment or arbitral award.
In practice, certainly in my experience, the need to enforce a mediated settlement agreement rarely arises but when it does, the ability to enforce under the Singapore Convention will be valuable. However, beyond the benefits in particular cases, the benefit of joining the Singapore Convention is the signal that it sends to businesses and investors here and abroad that the UK government is committed to supporting mediation and enhancing the position of the UK as a leader in international dispute resolution.
The government has indicated that it will not take advantage of the possible reservations available under the Convention, so that it will automatically apply to any commercial cross-border mediated settlement agreement and will apply to governmental or state parties.