Singapore's Second Minister for Law Edwin Tong on the Singapore Convention on Mediation coming into force

The Singapore Convention on Mediation, which seeks to give cross-border mediation settlements the force of law, came into force on September 12 this year.

The signing of the Convention in August last year marked the strengthening of the international dispute resolution framework with a view to easing trade and commerce among countries.

More than a year since India, China, the United States and a host of other nations signed the Convention, Bar & Bench spoke to Edwin Tong, Singapore's Second Minister for Law, to get a better idea of what the Convention seeks to achieve.

In this interview, Minister Tong, who was formerly a Partner at Allen & Gledhill LLP, speaks about how the Convention can help with contractual disputes during the COVID-19 pandemic, the role of lawyers in ensuring that mediation becomes a more accepted form of dispute resolution, and more.

What are the barriers to the success of the Singapore Convention on Mediation?

We recognised early on that widespread adoption would be key to the success of the Singapore Convention on Mediation. Our overarching challenge was to ensure that a wide range of signatories was involved, and who represented a broad global reach.

46 countries signed the Convention the day it opened for signature. Since then, seven other countries have signed the Convention, bringing the total number of signatories to 53. This includes three of the four largest economies in Asia: China, India and South Korea.

The Convention entered into force on September 12, just over a year after it opened for signature. There are currently 6 parties to the Convention – Singapore, Fiji, Qatar, Saudi Arabia, Belarus and Ecuador. We look forward to more countries coming on board in the near future.

With the legal framework of the Convention now in place, it is also important for a strong dispute resolution ecosystem to be supported by various pillars – the Government, Judiciary, legal profession, mediation institutions, and academia. All stakeholders have to be on board to fully realise the benefits and utility of the Convention and of mediation.

With countries around the world increasingly favouring unilateralism, can we expect more countries to end up signing the Convention?

The Convention had among the highest number of first-day signatories for a UN trade convention. 46 countries signed the Convention when it opened for signature on August 7, 2019, and since then, seven more countries have signed the Convention, bringing the total number of signatories to 53.

This strong show of support for the Convention bears testament to multilateralism and countries’ continued commitment to a rules-based international order.

We expect more countries to sign and ratify the Convention. For some countries, going through their domestic processes for signature or ratification may take some time. We hope States see value in the benefits the Convention will bring for mediation and international commerce, and look forward to welcoming more countries on board in the near future.

How will the signing of the Convention help India achieve its aim of increasing its Ease of Doing Business index?

The signing of the Convention is particularly important – when India becomes a party to the Convention, businesses will have a more effective way for enforcing mediated settlement agreements on commercial cross-border disputes. It will also increase investor confidence, as it provides a positive signal to foreign investors about India's commitment to adhere to international practice on Alternative Dispute Resolution. These are likely to have a positive impact on India’s business environment.

Several businesses have taken a hit during the COVID-19 pandemic. How will the terms of the Convention help businesses navigate through these times of uncertainty?

The COVID-19 pandemic has brought about much disruption and uncertainty for businesses worldwide, caused by weakened financial markets, disruption to supply chains, workplace operations, and business pipelines. In these challenging times, more companies may face financial difficulties and cash flow issues. Inevitably, disputes may arise as parties have difficulties fulfilling their contractual obligations.

The entry into force of the Singapore Convention on Mediation during this time is timely. With the Convention, businesses can rely on mediation as a cost and time effective option for dispute resolution for their cross-border transactions. Mediation may be particularly beneficial for businesses during these times of uncertainty. Businesses may not have the capacity or resources to engage in protracted legal proceedings. They may also wish to preserve their business relationships, particularly if the disputes arising are peculiar to the challenges brought about by COVID-19.

To leverage on mediation and the Convention in these difficult times, the Singapore International Mediation Centre (SIMC) has launched the SIMC COVID-19 protocol to support businesses that are disrupted in this pandemic period. The protocol allows international parties to resolve disputes online in an expeditious manner. Mediated settlement agreements reached using the protocol can be enforced using the Convention.

What role do lawyers play in ensuring that mediation becomes a more accepted and used form of dispute resolution?

First, lawyers play an important role as they advise clients on the most appropriate process to resolve their dispute at hand. In order to do so, lawyers will need to ensure that they are familiar with the various dispute resolution processes, including mediation. This will help them to recommend mediation when it is in the client’s interests to try mediation, for example, when the client wishes to preserve their long-term business relations with the other party.

Second, lawyers who are involved in the mediation to guide their clients through the mediation process (“mediation advocate”) have a key part to play in ensuring the success of the mediation. A good mediation advocate will be able to put the client’s case as persuasively as possible to the other side and to the mediator, in a non-adversarial manner, and ensure his or her client arrives at a settlement which meets their needs and interests. The mediation advocate can also consider and devise creative solutions that both parties will be satisfied with. If the mediation advocate is able to help his or her client realise the benefits of mediation and reach a satisfactory outcome, this will also help mediation become a more accepted and used form of dispute resolution.

With the facilitation of cross-border enforcement of settlement agreements via the Singapore Convention, there is now more reason for lawyers and their clients to consider mediation as a first port of call.

As one of the pillars of a strong dispute resolution ecosystem, it is important for lawyers to build expertise and familiarity with mediation processes, keep up with developments in the field, and maintain high standards and professionalism, including developing and keeping to strong codes of ethics in mediation.

Is there a mechanism in place to ensure that courts in the relevant jurisdictions recognize and enforce settlement agreements directly, without the need for litigation to enforce them?

The competent authority of a party to the Convention is expected to handle applications:

• To enforce a settlement agreement in accordance with its rules of procedure and under the conditions laid down in the Convention.

• To allow a party to invoke the settlement agreement in accordance with its rules of procedure and under the conditions laid down in the Convention, in order to prove that the matter was already resolved by the settlement agreement.

It is up to the Party to decide whether the courts should take on the role of the competent authority. Parties to the Convention will have to undertake the necessary domestic processes to ensure that the Convention can be implemented domestically, according to their own rules of procedure.

What are the characteristics that make Singapore the hub for international arbitration in Asia? What lessons do you think India and other countries can take?

Singapore’s moves to develop our legal and international dispute resolution framework are business-centric, and stem from our desire to ensure that international businesses based here, and operating within our part of the world, have easy access to the full suite of dispute resolution options and legal services for their cross border disputes and transactions.

From Singapore’s own experience, a strong dispute resolution ecosystem should feature various pillars, including the Government, judiciary, legal profession, dispute resolution institutions, and academia. Singapore’s dispute resolution ecosystem is supported by a strong pool of legal talent, including trained legal professionals as well as specialist arbitrators and mediators.

We have also observed that the formal legal infrastructure, neutrality and impartiality of the legal system and enforcement, are important factors that are often taken into account by parties considering arbitration. As with other business decisions, connectivity, cost and efficiency are also important factors.