7 August 2019 – a turning point for international mediation?

The Singapore Convention on Mediation, as the United Nations Convention on International Settlement Agreements Resulting from Mediation will be known, was adopted by the United Nations General Assembly on 20 December 2018, and will be open for signature at a signing ceremony in Singapore to be held on 7 August 2019.

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The Singapore Convention (and corresponding UNCITRAL Model Law amending the UNCITRAL Model Law on International Commercial Conciliation of 2002) introduces a new international enforcement regime for settlements reached at mediation. It is designed to provide a uniform and efficient international framework for mediation, similar in nature to the framework introduced by the New York Convention on the recognition and enforcement of foreign arbitral awards. It came about because it was felt in some quarters that one of the limitations on the use of mediation was the lack of an efficient and harmonized framework for cross-border enforcement of settlements arrived at mediation. Indeed, a survey conducted by IMI (the International Mediation Institute) on a proposal for a UN Convention in this area, appeared to show that parties would be more inclined to mediate with parties from other countries, if those other countries had ratified a convention making it easier to enforce settlement agreements. But is there really an issue here? Not many practitioners have experienced too many problems with enforcement of settlement agreements resulting from mediation. If enforcement is a real concern, risk is usually mitigated in any settlement agreement – security is taken, obligations are asset-backed, guarantees are given etc. But the reality is, when parties voluntarily sign up to a deal that they themselves have negotiated (albeit with the help of a mediator) their appetite for compliance is usually absolute. The same cannot of course always be said for a party on the wrong end of an arbitral award or judgment imposed upon them.

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Needed or not however, the Singapore Convention should be applauded. If it helps to remove a perception amongst some, that enforcement is a problem for parties mediating their international disputes, then that can only be a good thing. If it generally raises the profile of mediation internationally, even better! In this regard, many commentators hope that the Singapore Convention will do for mediation what the New York Convention has done for arbitration, the latter being regarded as a cornerstone of international arbitration and crucial to its development.

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Plaudits aside however, there is one aspect of the Singapore Convention that has raised concern throughout its development. Article 5(1)(e) deals with grounds for refusing to grant relief against enforcement. It provides that enforcement of a settlement reached at mediation may be refused where “There was a serious breach by the mediator of standards applicable to the mediator or the mediation without which breach that party would not have entered into the settlement agreement”.

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Mediator standards usually require neutrals to act fairly and impartially. Obvious requirements and no great challenge for any decent mediator. But to provide a party resisting enforcement with an additional ground of defence, based on breach of highly subjective standards, may not be such a great idea.

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The lid is lifted on mediation in the UK in only exceptional cases, for instance, where there has been an allegation of unambiguous impropriety by a party (see my earlier post from February 2017 which looked at the decision in Ferster v Ferster [2016] EWCA Civ 717 ), or where economic duress is alleged against a party. Article 5(1)(e) however concerns mediator conduct as opposed to party conduct. Thus, it could be possible that a party facing an Article 5(1)(e) defence, is met with assertions based on facts of which he is entirely unaware (because, for instance, the alleged misconduct took place in a private or caucus session), even though attending the very same mediation with the very same mediator as the party relying on Article 5. Even if the complaint arose from actions or inactions of a mediator in joint or plenary session, so all parties were present at the time the alleged misconduct by the mediator took place, the party faced with an Article 5 defence may be equally perplexed. Each party will have their own unique experience of the same mediation and mediator. What seems fair to one party may seem unfair to another. Like anything so subjective – pain, creativity etc, perceptions of fairness and impartiality will often depend on a person’s background, personal views and preferences, outlook, past experiences etc. What is more, how a party views its experience of a mediation (and mediator) could be influenced by subsequent events – a bad case of buyer’s remorse, perhaps.

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And what if it all ended up before a judge? Objective measurement of anything so subjective as fairness or impartiality (if those are the mediator standards under review), is going to be an extremely tricky and inherently uncertain exercise.

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Whilst at first blush Article 5(1)(e) raises some worrying issues, the need for real concern is doubtful. International enforcement of settlement agreements under the Singapore Convention is likely to take place only rarely. When it does, it could just be that Article 5(1)(e) proves too tempting for a party seeking to avoid the consequences of an agreement they had voluntarily entered into. But Article 5(1)(e) is formulated in deliberately restrictive terms, particularly the requirement of a causal link between the “serious breach” of mediator standards (or standards applicable to the mediation) and the entering into of the settlement agreement. And of course, not only will the party resisting enforcement have to show that causal link, it will also have to show that the acts or omissions of the mediator complained of, do in fact amount to a serious breach of applicable standards.

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It is hoped that concerns around Article 5(1)(e) will prove academic and that the Singapore Convention will only enhance the profile of mediation internationally, particularly in areas where mediation is still in its infancy, and also encourage those who perceive the lack of an international enforcement framework to be a barrier to mediating, to use mediation more.

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Jon Lang

February 2019