Mediation faster, cheaper, preserves business ties better than other options: Edwin Tong

The Singapore Convention on Mediation makes it easier for businesses in a dispute to have their mediated agreements enforced. PHOTO: PIXABAY

SINGAPORE - While reaching an agreement through mediation is a good first step in a business dispute, many might worry that the other party may not fulfil his end of the deal, said Second Minister for Law Edwin Tong.

It is therefore important that the mediation process carries an assurance that both parties will comply with any agreement that is reached, he added.

"The Singapore Convention on Mediation, which facilitates the enforcement of mediated settlement of an international commercial dispute, offers this assurance," he said.

Mr Tong, who is also the Minister for Culture, Community and Youth, was speaking at the first India-Singapore Mediation Summit (ISMS) on Saturday (July 17).

The Singapore Convention on Mediation is a United Nations international trade dispute treaty that came into force last year. Mr Tong said 54 countries have now signed the convention, and six have ratified it.

Mediation in the legal context is a form of settling disputes while avoiding what the law says about the rights and wrongs of the situation. The other options - litigation and arbitration - involve a judge or an arbitrator deciding on who is legally right or wrong in the dispute.

Mediation instead focuses on arriving at an agreed solution between the parties without the mediator making a judgment.

The Singapore Convention on Mediation makes it easier for businesses in a dispute to have their mediated agreements enforced.

Without the treaty, a settlement agreement made in one country has no legal force in another, meaning that those seeking to enforce a mediated settlement agreement in another country will have to go to court.

The first ISMS was held online instead of in-person in India as was planned, because of the ongoing Covid-19 pandemic.

It involved speeches from Chief Justice N.V. Ramana of India and Singapore's Chief Justice Sundaresh Menon as the joint guests of honour, as well as a Q&A session with legal professionals and civil servants from both countries.

CJ Menon said the growth of mediation as a way to deal with disputes has been being fuelled by economic fallout and logistical problems brought on by the Covid-19 pandemic.

He said: "Entire industries have been left grappling with the uncertainties arising from disrupted supply chains, delayed payments and operational difficulties."

He added that other forms of conflict resolution are more expensive and carry the risk of damaging long-term relationships between business partners.

CJ Menon also said he was confident that the Singapore Mediation Convention would in time grow to be as influential and widely accepted as the New York Convention, which governs arbitration in more than 160 countries.

He added: "Mediation offers considerable advantages as a means of helping businesses steer through the uncertainties brought about by the pandemic. We have therefore made a concerted effort to encourage even greater reliance on mediation during this period."

(Top row, from right) Second Minister for Law Edwin Tong, Singapore's Chief Justice Sundaresh Menon and Chief Justice N.V. Ramana of India. PHOTO: SINGAPORE INTERNATIONAL MEDIATION CENTRE

Mr Tong also said Singapore and India have potential for more collaboration on mediation. He cited the two countries' close economic ties - with Singapore being the biggest contributor to foreign domestic investment into India from April 2020 to March 2021, and Indian companies forming the largest overseas contingent to have invested into Singapore.

He added that the two countries have good reasons to collaborate more closely.

"It's a dispute resolution mechanism that has been historically practised by both our societies," he said.

"And more importantly, it is a means of resolving disputes in a manner which gives parties the best chance of maintaining what could very often be hard-won, longstanding commercial relationships."

Mr Tong added that mediation is generally faster, more cost-effective and also familiar to both Singaporean and Indian companies.

Join ST's WhatsApp Channel and get the latest news and must-reads.