There is plenty of fanfare over the fact that Singapore has a United Nations Convention named after it and among all the pretence that where a convention is signed is somehow relevant, you may be wondering what exactly this “Singapore Convention” actually does. As you guess from the title, the United Nations Convention on International Settlement Agreements Resulting from Mediation (“the Convention”) serves to codify and standardise the means by which mediated settlement agreements (“MSAs”) are enforced anywhere. Moving forward, if you have a commercial dispute with a foreign party, both of you agree to submit your dispute to mediation and you thereafter successfully reach a settlement, you will want to be able to enforce your MSA in the country where your counterparty has their assets.
ScopeLet’s first be clear about what the Convention applies to. If your MSA has been recorded as a court judgement or as an arbitral award, the Convention does not apply to your MSA; you should be looking to enforce a foreign judgement or a foreign arbitral award instead. Also, the Convention is meant to be applied to commercial disputes only, so if the transaction from which your dispute arises is not a commercial one, the Convention will not help you either. Lastly, MSAs are expressly defined in the Convention as settlements that have been reached “with the assistance of a third person or persons”. This means that you must have engaged a mediator to settle your dispute. As intuitive as this appears, this also means that settlements that were made through direct negotiation between parties are not included in the scope of the Convention either.
What you need to enforce the MSA?Suppose you are now looking to have an MSA enforced in court, in a contracting state to the Convention. Make sure you produce the following before the court:
- The MSA, with both your signature and the other party’s signature; and
- Something to demonstrate that the MSA resulted from mediation, such as:
Making sure your MSA will be enforcedThere are certain situations where the MSA will not be enforced by the court. To avoid such an outcome, be sure to check for the following:
- Make sure the MSA expressly states that it is final and binding on the parties. If an MSA is not final, or not binding, your counterparty cannot be reasonably be expected to perform any obligation contained in the MSA.
- If there are subsequent modifications to the MSA, make sure you are submitting the final version of the MSA.
- If your MSA happens to provide for conditional obligations, be sure that those obligations have actually arisen.
- The obligations stated in the MSA must be clear and comprehensible.
- Make sure the MSA can be performed under the law of the country to which you and your counterparty have subjected it to
- Be very sure that the person signing the MSA on behalf of the counterparty is authorised to do so, and that the counterparty has the capacity to enter the MSA with you. Incapacity is a common reason for courts refusing to enforce MSAs.