New Bill to boost Singapore's global role as mediation hub

It will give full suite of options for commercial parties to resolve their cross-border disputes

A new Bill that will boost Singapore's position as a leading global dispute resolution hub was introduced in Parliament on Monday, allowing parties in cross-border commercial disputes to seek various options to enforce or invoke their mediated settlement agreements.

The Singapore Convention on Mediation Bill, tabled for its first reading by the Ministry of Law (MinLaw), seeks to implement the country's obligations under the United Nations Convention on International Settlement Agreements Resulting from Mediation, also known as the Singapore Convention on Mediation. This international treaty, the first UN treaty to be named after Singapore, has been signed by 51 countries and aims to promote the use of mediation in settling cross-border commercial disputes.

When passed, the Bill will strengthen Singapore's offerings as a leading global dispute resolution hub, providing "a full suite of options for commercial parties to resolve their cross-border disputes, whether through litigation, arbitration or mediation", MinLaw said in a statement.

The use of mediation to resolve cross-border commercial disputes - instead of embarking on legal battles - reduces the risk of souring and termination of commercial relationships.

However, ensuring the other party complies with the mediated settlement agreement has often been cited as a challenge. This comes as such an agreement - unlike a court judgment or an arbitral award - is only binding contractually and, therefore, not directly enforceable in the courts.

The Singapore Convention puts in place a process for a company to more easily enforce or invoke the contract in a country which is a party to the convention.

The proposed Bill will allow a party such as an overseas company to apply to the Supreme Court here to enforce an international settlement agreement with its counterpart, or invoke the agreement to prove that a matter had already been resolved when defending court proceedings in Singapore.

An overseas firm can also apply to the Supreme Court here to enforce or invoke an international settlement agreement against its counterparts from other countries as well, as long as requirements under the Bill are fulfilled.

The Bill offers the parties different ways of making enforcement or invocation applications under the convention, such as applying to the High Court to record the agreement as a court order, said MinLaw. It noted that the availability of options offers "flexibility to parties to decide on the most appropriate mode for their circumstance, and saves them time and costs".

A version of this article appeared in the print edition of The Straits Times on January 08, 2020, with the headline 'New Bill to boost S'pore's global role as mediation hub'. Print Edition | Subscribe