S'pore and Japan launch mediation service to settle business disputes

Under joint protocol, firms will have access to mediation at lower fees starting from $6,500

Under the joint protocol between the Japan and Singapore international mediation centres, companies will have access to a mediation service starting at $6,500 and capped at $16,000 per party, regardless of the value in dispute. PHOTOS: AFP, KUA CHEE SIONG

Businesses involved in disputes with Japanese companies during the coronavirus pandemic can resolve them more cost effectively and quickly through a new mediation service started by the Singapore International Mediation Centre (SIMC) and its counterpart in Japan.

Under the joint protocol launched last Saturday, companies will have access to mediation at fees starting from $6,500 and capped at $16,000 per party, regardless of the value in dispute.

This costs less than other forms of dispute resolution - such as arbitration and litigation - which typically run to six figures.

The mediation will also be organised within 10 days, with SIMC and the Japan International Mediation Centre (JIMC) each providing a mediator to bridge the legal and cultural differences between the parties.

Settlement agreements arising from the mediation may be enforced under the Singapore Convention on Mediation, which came into force last Saturday in Singapore.

The United Nations treaty has also been ratified by five other countries - Fiji, Qatar, Saudi Arabia, Belarus and Ecuador.

The joint protocol comes on the back of concerns that disputes arising from disruptions related to Covid-19 should be resolved quickly in the interests of business and economic recovery.

It follows a similar protocol launched in Singapore by SIMC earlier this year, the SIMC Covid-19 Protocol.

SIMC said it is also working with partners around the world on similar protocols that will be customised to the needs of the specific jurisdictions.

With Japan and Singapore among each other's largest investors, the two countries share extensive business ties.

In a statement, SIMC said the protocol was the first tie-up of its kind between two international centres.

SIMC chairman George Lim said: "The joint protocol offers parties the best of both worlds as they can discuss their disputes with mediators who understand the unique aspects of their respective cultures and jurisdictions."

Meanwhile, chief director of JIMC Haruo Okada said the pandemic has caused "disruptions and conflicts all over the world that no one has ever experienced" and for which there are no applicable rules and precedents, making such disputes particularly suitable for mediation.

Join ST's Telegram channel and get the latest breaking news delivered to you.

A version of this article appeared in the print edition of The Straits Times on September 15, 2020, with the headline S'pore and Japan launch mediation service to settle business disputes. Subscribe