{"id":254101,"date":"2021-09-13T16:00:37","date_gmt":"2021-09-13T10:30:37","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=254101"},"modified":"2021-09-13T13:49:22","modified_gmt":"2021-09-13T08:19:22","slug":"the-singapore-mediation-convention","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2021\/09\/13\/the-singapore-mediation-convention\/","title":{"rendered":"The Singapore Mediation Convention: A Long Pending Catharsis for Mediation and an Urgent Need for India to Ratify"},"content":{"rendered":"

On 20-12-2018, the United Nations Convention on International Settlement Agreements Resulting from Mediation (Singapore Mediation Convention) was adopted by the United Nations General Assembly and opened for signature for various State parties on 7-8-2019.[1]<\/a> To date, the Singapore Mediation Convention has 54 signatories \u2014 including States such as India, the United States of America, and China \u2014 and out of these 54 signatories, 6 States have ratified the same.[2]<\/a> This Convention was drafted for facilitating international trade through standardising and unifying the rules for mediation in international commercial disputes.[3]<\/a> Despite the benefits provided by this Convention, India has not ratified it. Thus, in this article, firstly, the author shall briefly discuss the importance and purpose of the Singapore Mediation Convention. Secondly, the author shall analyse the challenges and implications for India for not ratifying this Convention. Thirdly and in finality, the author shall discuss whether a separate and exhaustive legislation is required for mediation in India.<\/p>\n

1. Introduction: Importance and purpose of the Singapore Mediation Convention<\/strong><\/span><\/h3>\n

In the Preamble of the Singapore Mediation Convention, we grasp that it has been lucidly acknowledged that mediation is an integral part of international commercial dispute settlement as it allows \u201camicable settlement\u201d of disputes. This amicable settlement through mediation comes in the backdrop of \u201c\u2026 reducing the instances where a dispute leads to the termination of a commercial relationship, facilitating the administration of international transactions by commercial parties and producing savings in the administration of justice by States.\u201d[4]<\/a> However, the general reason why international parties, States, and other stakeholders do not readily opt for mediation is that mediation has no legal force behind it. In other words, mediation is non-binding on the parties. The same conundrum was acknowledged by the General Assembly while adopting the Singapore Mediation Convention, wherein it also recognised the quintessential value of having an international legal framework for mediation.[5]<\/a> Therefore, we comprehend that the Singapore Mediation Convention was established as an international framework to give legal recognition to \u201cinternational settlement agreements\u201d that result from international commercial mediation. This establishment of an international framework boosts foreign investors\u2019 confidence and the host States\u2019 willingness to resort to mediation as a dispute settlement mechanism. However, considering that majority of the signatories (including India) are yet to ratify the Singapore Mediation Convention, the consequential effect of such non-ratification must be analysed.<\/p>\n

2. Challenges and implications: Consequential effect of non-ratification of the Singapore Mediation Convention on India<\/strong><\/span><\/h3>\n

Earlier, arbitration was seen as an appropriate alternative to litigation. However, with the changing dynamics of the commercial realm, new dispute settlement mechanisms gained traction, such as mediation.[6]<\/a> As mediation has no legally binding force, the Singapore Mediation Convention was introduced to resolve this decades long conundrum. However, to reap its full benefits and take full advantage of mediation, it is imperative for India to urgently ratify the Singapore Mediation Convention due to the following reasons.<\/p>\n

Firstly, before the Singapore Mediation Convention, the parties could bring legal force to the mediation proceedings by entering into a settlement agreement. However, the problem with this settlement agreement was its enforceability. For example, parties X and Y enter into a settlement agreement. Party X wishes to enforce the settlement agreement in party Y\u2019s State. To enforce this settlement agreement, party X must initiate domestic court proceedings in party Y\u2019s State, which can prove to be time taking, resources draining, and cumbersome because it is highly probable that the settlement agreement may be inconsistent with the laws of party Y\u2019s State. Alternatively, there can also be a situation where the Court may hold a different opinion towards the settlement agreement as the agreement may be against the public policy of party Y\u2019s State. Thus, this essentially means that the enforceability of settlement agreements resulting from international mediation was a significant conundrum before the Singapore Mediation Convention, especially in the absence of an international framework.<\/p>\n

However, presently, Article 3 of the Singapore Mediation Convention makes it mandatory for the parties to enforce a settlement agreement resulting from \u201cinternational commercial\u201d mediation.[7]<\/a> This means that if parties X and Y have signed and ratified this Convention, then their domestic laws are consistent with the Convention, which, in turn, resolves the enforceability conundrum. This is because now, all that will remain for party X or party Y is to initiate \u201cenforcement proceedings\u201d in the domestic courts of the other party\u2019s State. In such a situation, the probability of the settlement agreements being enforced is substantially higher as there is consistency between the domestic laws and the international standards. This increased and solidified probability of the settlement agreement being enforced is also evident from Article 5, which provides fixed grounds on which a court can deny the enforcement of a settlement agreement. These grounds essentially aim to minimise the hurdles that may arise during the enforcement proceedings.<\/p>\n

Thus, this reduces the costs and resources involved in enforcing the settlement agreements, which, in turn, acts as a motivator for the parties to resort to mediation as a dispute settlement mechanism. Further, the credibility of international commercial mediation also substantially increases. However, it is also imperative for us to note that, according to Article 1, two types of mediations are excluded from the application of the Singapore Mediation Convention \u2014 those mediations that are (1) to resolve a dispute by a consumer for \u201cpersonal, family, or household purposes\u201d; and (2) to resolve \u201cfamily, inheritance or employment law\u201d issues. Further, this Convention also does not apply to those settlement agreements \u2014 that are approved by a court; that have been concluded during the proceedings of a court; that is enforceable as a part of a court\u2019s judgment; or those settlement agreements that are \u201crecorded and are enforceable as an arbitral award\u201d.[8]<\/a><\/p>\n

Although considerable efforts have been invested in increasing the demand for mediation in India since 2002 through various statutes such as the Companies Act, 2013[9]<\/a>, the Real Estate (Regulation and Development) Act, 2016[10]<\/a>, the Commercial Courts Act, 2015[11]<\/a>, and the Consumer Protection Act, 2019[12]<\/a>, and through the establishment of the New Delhi International Arbitration Centre,[13]<\/a> the traction towards international mediation remains slow and insignificant in India. The reasons behind the same, as stated earlier, are due to the non-binding nature of mediation and the enforceability conundrum. Thus, if India does not urgently ratify the Singapore Mediation Convention, it will remain in the limbo of the pre-convention situation, which, in turn, is capable of hampering and severing investor and foreign relations. For instance, if we take the example of the Cairn <\/em>case,[14]<\/a> had the Singapore Mediation Convention existed back then and had India ratified the same, then the probability of the case going to arbitration would have significantly reduced as the parties may have seriously considered investor-State mediation as an option to resolve the dispute without jeopardising their resources.[15]<\/a> Therefore, there arises an urgent need for India to ratify the Singapore Mediation Convention to resolve its international commercial disputes \u2014 through mediation \u2014 effectively and efficiently while ensuring the sustainability and fostering of its international relations with foreign investors and other stakeholders.<\/p>\n

Secondly, Article 5(1)(e<\/em>) crystallises and puts into writing that the mediator(s) must follow specific \u201cstandards\u201d. Although these standards are not found in the Singapore Mediation Convention, the most proximate to these standards is the code of professional conduct by the International Mediation Institute.[16]<\/a> In a pre-convention situation, we comprehend that the usage of this professional code of conduct or any other code of conduct (which remain absent for mediators) is not widely known for mediation as compared to arbitration.[17]<\/a> However, presently, as these \u201cstandards\u201d have been crystallised in the Convention in a generalised form, we comprehend that the urgent need for India to ratify this Convention substantially intensifies. This is because, as international commercial mediation was not earlier standardised, in a uniform manner, accompanied by a dearth of professional ethics and training, there was no substantial impetus for India to resort to international commercial mediation. However, as now international commercial mediation has been uniformly standardised to a large extent, accompanied by the crystallisation of specific professional \u201cstandards\u201d for the mediators, through the Singapore Mediation Convention, the hesitancy towards international commercial mediation can be eradicated to a large extent. This hesitancy can now be overwritten by the newly found motivation (from the Singapore Mediation Convention) to seriously consider international commercial mediation a viable alternative to dispute settlement.<\/p>\n

Thirdly and in finality, considering the Covid-19 pandemic, it has been lucidly found that the foreign investors are negatively impacted due to the regulatory measures adopted by various States, including India.[18]<\/a> These regulatory measures are likely to act as a thorn in foreign investor relations, due to which the propensity of international commercial disputes arising exorbitantly rises. Further, other factors are likely to act as a catalyst in causing international commercial disputes in the Covid-19 pandemic, such as differences in political standings, significant disruption of the supply-demand chain, and other related factors. Therefore, considering how litigation and arbitration may result in severing foreign investor relations, India must focus on international commercial mediation by ratifying the Singapore Mediation Convention, which will, in turn, result in better fostering, development, and sustenance of commercial relations.<\/p>\n

3. Conclusion: Is ratification of the Singapore Mediation Convention and separate legislation for mediation, the future way forward for India<\/strong><\/span><\/h3>\n

Considering the arguments mentioned above, if hesitancy towards ratification of the Singapore Mediation Convention exists due to its potential limitations \u2014 such as lack of vivid distinction between conciliation and mediation, lack of definition for \u201ccommercial disputes,\u201d opt-out mechanism under Article 5(1)(d<\/em>), and other related limitations \u2014 then it is imperative to note that the Singapore Mediation Convention can be amended by way of Article 15, similar to how the UNCITRAL Model Law on International Commercial Conciliation, 2002 was effectively and efficiently amended and replaced with the UNCITRAL Model Law on International Commercial Mediation and International Settlement Agreements Resulting from Mediation, 2018. Further, suppose that mediation would be given priority, and the demand for arbitration would reduce. In that case, the same presumption is found on false premises because even in the contemporary scenario, we comprehend that mediation \u2014 being available in international institutions like the International Chamber of Commerce, Stockholm Chamber of Commerce, and London Court of International Arbitration \u2014 has not hampered the demand for arbitration.[19]<\/a> Thus, the potential hesitancies are resolved and outweighed by the potential advantages offered by the Singapore Mediation Convention and the track record of mediation in settling disputes.<\/p>\n

For India to ratify the Singapore Mediation Convention, the Indian Parliament must promulgate a legislation, under Article 253 of the Constitution[20]<\/a>, that gives effect to the Convention. In M.R.<\/em> Krishna Murthi <\/em>v. New India Assurance Co. Ltd.<\/strong><\/em>,[21]<\/a> the Supreme Court lucidly held that:<\/p>\n

    \n
  1. … Advantages of mediation are manifold. This stand recognised by the legislature as well as policymakers and needs no elaboration. Mediation is here to stay. It is here to evolve. It is because of the advantages of mediation as a method here to find new grounds. It is here to prosper, as its time has come. It is now finding statutory recognition and has been introduced in few statutes as well. Examples are the Companies Act, 2013[22]<\/a>, the Insolvency and Bankruptcy Code, 2016[23]<\/a>, the Commercial Courts Act, 2015[24]<\/a>, etc. In these enactments provisions are made even for pre-litigation mediation by making this process mandatory. There is, in any case, umbrella provisions in the form of Section 89 of the Code of Civil Procedure[25]<\/a> which, inter alia, provides for court annexed mediation as well.\u2026 In fact, the way mediation movement is catching up in this country, there is a dire need to enact the Mediation Act as well.<\/li>\n<\/ol>\n

    Further, the New Delhi International Arbitration Centre Act, 2019[26]<\/a>, was passed to institutionalise arbitration, mediation, and conciliation as dispute settlement mechanisms. Thus, this essentially shows a growing, substantial acceptance for mediation in India wherein parliamentary approval and ratification of the Singapore Mediation Convention should not be a hurdle.<\/p>\n

    However, the issue arises for creating a separate legislation on mediation, consequently to the ratification of the Singapore Mediation Convention. Thus, in such a scenario, three options are available for India \u2014 firstly, Parliament can amend the Arbitration and Conciliation Act, 1996[27]<\/a> (1996 Act), and add separate provisions for mediation; secondly, considering that in Afcons Infrastructure Ltd. <\/em>v. Cherian Varkey Construction Co. (P) Ltd.<\/em>[28]<\/a> the Supreme Court held that mediation and conciliation are synonymous to each other, the 1996 Act can be amended to include mediation under Part III of the 1996 Act i.e. conciliation-related statutory provisions; and thirdly, a separate, non-lengthy, and exhaustive legislation can be prepared that is directly consistent with the Singapore Mediation Convention.<\/p>\n

    Although the most viable option that may be chosen out of the three is subject to parliamentary deliberations and other related factors, incorporating mediation-related provisions in the 1996 Act seems to be the most efficient and effective way because if a separate mediation legislation is created, then it may create a problem of lack of uniformity in the alternative dispute resolution (ADR) law and may also lead to the creation of a complex structure for ADR law. This complex structure can, in turn, be problematic in statutory compliance. Further, it is quintessential to note that amending a legislation is relatively simpler and faster than creating a new legislation. Therefore, incorporating mediation-related provisions in the 1996 Act can weed the inefficiencies that a separate mediation legislation would have created.<\/p>\n

    \n

    \u2020<\/a> Executive Director Asia Pacific Centre for Arbitration and Mediation,<\/span>
    \nDirector IIAM, e-mail:     iram.majidadv@gmail.com<\/a>.<\/u><\/span><\/p>\n

    [1]<\/a> Status: United Nations Convention on International Settlement Agreements Resulting from Mediation, UNCITRAL, <https:\/\/uncitral.un.org\/en\/texts\/mediation\/conventions\/international_settlement_agreements\/status>.<\/p>\n

    [2]<\/a> Status: United Nations Convention on International Settlement Agreements Resulting from Mediation, UNCITRAL, <https:\/\/uncitral.un.org\/en\/texts\/mediation\/conventions\/international_settlement_agreements\/status>.<\/p>\n

    [3]<\/a> G.A. Res. A\/73\/198, Art. 1(1), United Nations Convention on International Settlement Agreements Resulting from Mediation (12-12-2018).<\/p>\n

    [4]<\/a> G.A. Res. A\/73\/198, Preamble, United Nations Convention on International Settlement Agreements Resulting from Mediation (12-12-2018).<\/p>\n

    [5]<\/a> G.A. Res. A\/73\/198, United Nations Convention on International Settlement Agreements Resulting from Mediation (12-12-2018).<\/p>\n

    [6]<\/a> Iris Ng, The Singapore Mediation Convention: What does it mean for Arbitration and the Future of Dispute Resolution?, Kluwer Arbitration Blog (31-8-2019),<\/p>\n

    <http:\/\/arbitrationblog.kluwerarbitration.com\/2019\/08\/31\/the-singapore-mediation-convention-what-does-it-mean-for-arbitration-and-the-future-of-dispute-resolution\/>.<\/p>\n

    [7]<\/a> G.A. Res. A\/73\/198, Art. 3, United Nations Convention on International Settlement Agreements Resulting from Mediation (12-12-2018).<\/p>\n

    [8]<\/a> G.A. Res. A\/73\/198, Art. 1(3)(b<\/em>), United Nations Convention on International Settlement Agreements Resulting from Mediation (12-12-2018).<\/p>\n

    [9]<\/a> <http:\/\/www.scconline.com\/DocumentLink\/A5aqjfDv<\/a>>.<\/p>\n

    [10]<\/a> <http:\/\/www.scconline.com\/DocumentLink\/u5bCT3Hd<\/a>>.<\/p>\n

    [11]<\/a> <http:\/\/www.scconline.com\/DocumentLink\/7566Y3w5<\/a>>.<\/p>\n

    [12]<\/a> <http:\/\/www.scconline.com\/DocumentLink\/P62rNTsE<\/a>>.<\/p>\n

    [13]<\/a> Laila Ollapally, India Signs the Singapore Mediation Convention, Mediate India! (April 2020) <https:\/\/www.mediate.com\/articles\/ollapally-india-singapore.cfm>.<\/p>\n

    [14]<\/a> Cairn Energy Plc<\/em> v. Union of India<\/em>, PCA Case No. 2016-17, https:\/\/www.italaw.com\/cases\/5709. (not found, pls check)<\/p>\n

    [15]<\/a> See also<\/em> Iram Majid, Cairn Energy Plc and Cairn UK Holdings Limited (CUHL) v. Government of India: A rising and burning need for investor-State mediation in investor-State tax and energy-related disputes, SCC OnLine Blog (8-3-2021), 2021 SCC OnLine Blog Exp 15,<\/p>\n

    <https:\/\/www.scconline.com\/blog\/post\/2021\/03\/08\/cairn-energy-plc-and-cairn-uk-holdings-limited-cuhl-v-government-of-india-a-rising-and-burning-need-for-investor-state-mediation-in-investor-state-tax-and-energy-related-disputes\/#_ftnref4>.<\/p>\n

    [16]<\/a> Code of Professional Conduct, International Mediation Institute, <https:\/\/imimediation.org\/practitioners\/code-professional-conduct\/>.<\/p>\n

    [17]<\/a> Alison G. FitzGerald, The Singapore Mediation Convention, Norton Rose Fulbright (September 2019), <https:\/\/www.nortonrosefulbright.com\/en-in\/knowledge\/publications\/b5906716\/the-singapore-mediation-convention>.<\/p>\n

    [18]<\/a> Prabhash Ranjan and Pushkar Anand, Covid-19, India, and Investor-State Dispute Settlement (ISDS): Will India be Able to Defend its Public Health Measures?, 28(1) Asia Pacific L. Rev. 225, 225-247 (2020), <https:\/\/www.tandfonline.com\/doi\/full\/10.1080\/10192557.2020.1812255>.<\/p>\n

    [19]<\/a> Iris Ng, The Singapore Mediation Convention: What does it mean for Arbitration and the Future of Dispute Resolution?, Kluwer Arbitration Blog (31-8-2019),<\/p>\n

    <http:\/\/arbitrationblog.kluwerarbitration.com\/2019\/08\/31\/the-singapore-mediation-convention-what-does-it-mean-for-arbitration-and-the-future-of-dispute-resolution\/>.<\/p>\n

    [20]<\/a> <http:\/\/www.scconline.com\/DocumentLink\/61pY4yl7<\/a>>.<\/p>\n

    [21]<\/a> (2020) 15 SCC 493<\/a> : 2019 SCC OnLine SC 315.<\/p>\n

    [22]<\/a> <http:\/\/www.scconline.com\/DocumentLink\/A5aqjfDv<\/a>>.<\/p>\n

    [23]<\/a> <http:\/\/www.scconline.com\/DocumentLink\/86F742km<\/a>>.<\/p>\n

    [24]<\/a> <http:\/\/www.scconline.com\/DocumentLink\/7566Y3w5<\/a>>.<\/p>\n

    [25]<\/a> <http:\/\/www.scconline.com\/DocumentLink\/3iU0MzIU<\/a>>.<\/p>\n

    [26]<\/a> <http:\/\/www.scconline.com\/DocumentLink\/XEk9RbiK<\/a>>.<\/p>\n

    [27]<\/a> <http:\/\/www.scconline.com\/DocumentLink\/QWdt5a4f<\/a>>.<\/p>\n

    [28]<\/a> (2010) 8 SCC 24<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

    by Iram Majid\u2020<\/p>\n","protected":false},"author":67011,"featured_media":254116,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[42503,1191],"tags":[29785,3740,45442],"class_list":["post-254101","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-legal-analysis","category-op-ed","tag-law","tag-mediation","tag-singapore-mediation-convention"],"yoast_head":"\nThe Singapore Mediation Convention: A Long Pending Catharsis for Mediation and an Urgent Need for India to Ratify | SCC Times<\/title>\n<meta name=\"description\" content=\"The Singapore Mediation Convention\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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