A new United Nations (UN) treaty on mediation is to be named after Singapore, a move that legal experts say will boost the country's status as an international hub for resolving business disputes.
Called the Singapore Convention on Mediation, the prospective treaty will improve cross-border trade by making it easier to enforce mediated settlements.
This is the first UN treaty to be named after Singapore, which had secured a bid to host its signing ceremony here next year.
Explaining the significance of the naming yesterday, Law and Home Affairs Minister K. Shanmugam said: "We played a key role in the negotiations, the drafting of the treaty. The countries all agreed for it to be called the Singapore Convention, and they all agreed to Singapore hosting the signing ceremony."
Also, the decision "puts Singapore on the map for thought leadership in international trade laws", he told reporters during a media interview at the Law Ministry (MinLaw).
The recommendation for Singapore to host the signing was made by the UN Commission on International Trade Law when it met in New York from June 25 to July 13.
Singapore has another international treaty named after it - the 2006 Singapore Treaty on the Law of Trademarks. However, it was not concluded under the auspices of the UN organisation, but under the framework of the World Intellectual Property Organisation, which is a UN specialised agency.
The UN treaty naming is not without benefit to Singapore.
"Of course, the treaty applies to all countries, but we will be among the places where people will come to for mediation," Mr Shanmugam noted. "We are top quality in arbitration, and now we have a mediation product as well," he added.
Mr George Lim, chairman of the Singapore International Mediation Centre, said: "Having Singapore's name associated with such a ground-breaking agreement will boost our status as an international dispute resolution hub."
He added the treaty is a game-changer that will encourage more businesses worldwide to resolve their disputes peacefully.
Disputes can be settled via other methods, like arbitration. But mediation is less antagonistic as it encourages parties to reach an agreement by finding common ground.
Businesses, however, may not automatically consider it for cross-border disputes "because there is no teeth and no guarantee their settlement would be easily enforced", said Ms Sharon Ong, director of MinLaw's policy advisory division.
With greater certainty of enforcement under the new treaty, Ms Natalie Morris-Sharma, MinLaw's international legal division director, foresees mediation being a cheaper and faster option than before.
The UN treaty is Singapore's latest move in recent years to strengthen the use of mediation for dispute resolution.
Last year, it enacted a Mediation Act that lets agreements reached be recorded as orders of Singapore's courts, allowing parties to enforce their terms more easily.
The new treaty will also benefit businesses, Mr Shanmugam said.
With infrastructure work and trade flows in the region growing exponentially, there needs to be a variety of methods to resolve disagreement, he said, adding that many companies try to keep their relationships going even when disputes arise.
Law firm WongPartnership's chairman Alvin Yeo expects interest in mediation to grow, as businesses find it costly to engage in a long-running arbitration.
He also sees it as part of Singapore's positioning as a leading financial hub. "In financial transactions, you have the possibility of disputes. If Singapore can offer a full suite of dispute resolution services, that is an intangible benefit to its branding," he said.