Negotiations were underway for the United Nations Commission on International Trade Law (UNCITRAL) when the 2017 North American blizzard shut down the United Nations Headquarters, where delegates had been meeting.
But the delegates were determined to continue.
“We were on the cusp of a breakthrough, so we didn’t want to lose that momentum,” said Ms Sharon Ong, who was part of the Singapore delegation to UNCITRAL. “One of the delegates managed to get a law firm that was based in New York City, and then we all crammed into this conference room. It was very stuffy and very cramped … all the delegates who were interested were crammed in there.”
The snowstorm turned out to be a blessing in disguise.
“On that day, we resolved a lot of the issues that had been sticking points for many years. We all just came with a spirit of co-operation, so it was very collaborative and people were very open about things,” said Ms Ong. “It’s very special because that day was quite a breakthrough.”
Ms Ong was Singapore’s representative for the UNCITRAL Working Group on Dispute Settlement.
Three years of negotiations have successfully resulted in the United Nations Convention on International Settlement Agreements Resulting from Mediation.
The treaty will be signed in August 2019 in Singapore, and will thus be named the Singapore Convention on Mediation.
This is the first treaty under the UN to be named after Singapore.
There are three ways that businesses can seek legal recourse for commercial disputes – arbitration, litigation and mediation.
But a key difficulty in cross-border disputes – when a business in one country has a dispute with an entity in another country – is enforceability. In other words, there is no guarantee that either party will stick to their side of the outcome.
That is why countries must come to a multilateral agreement to mutually enforce the outcomes of such disputes, whether through arbitration, litigation, or mediation.
While the New York Convention exists for arbitration, and the Hague Convention for litigation, such a multilateral agreement did not exist for mediation.
As a result, mediation was not a useful tool for businesses to seek recourse for international disputes.
However, mediation gives all parties the most autonomy in deciding the outcome of a dispute, and seeks a win-win outcome for all sides, compared to the other two methods. It also tends to be cheaper, faster and more convenient.
“Cheaper not just because of the dispute resolution process itself, but a lot of the time today, the uncertainty of the outcome of a dispute resolution process is imputed in the costs upstream,” said Mrs Natalie Morris-Sharma. “So when you can ascertain with a bit more foresight how you think your dispute resolution process is going to go, it allows you to approach things with a lot more certainty. So that’s one avenue of the costs savings.”
Mrs Morris-Sharma chaired the UNCITRAL Working Group of Dispute Settlement and was also the vice-chairperson of the UNCITRAL Commission sessions in 2017 and 2018.
Her role was “shepherding” members from more than a hundred delegations into coming to a consensus while meeting the United Nation’s timeline targets.
Delegations came to the table with different experiences with mediation, and perspectives on how enforcement should be achieved.
“In any process that involves reaching a common understanding of how processes should be approached, delegations had to consider how this new system would fit in with their domestic processes,” said Mrs Morris-Sharma, who is also director of the international legal division at Singapore’s Ministry of Law. “Thankfully I think we managed to strike a balance between the divergent views through the Singapore Convention.”
When ratified by countries around the world, the Convention will encourage businesses around the world to resolve their commercial disputes peacefully, as opposed to seeking arbitration or litigation.
And the treaty will raise Singapore’s standing in the world as a location for dispute resolution.
Law Minister K Shanmugam said on Monday: “Anytime people talk about mediation, they will look up the international treaty and they will know there’s a Singapore Convention (on Mediation). So automatically Singapore will have mindshare amongst the profession, amongst the people who want to go for mediation.
“We must make sure we have the mediators, both local and international, and we have the lawyers who are capable of handling mediation and advising parties and be actively involved.”
In 2017, Singapore enacted a Mediation Act to allow parties to enforce mediated settlement agreements more easily.
It has also set up the Singapore Mediation Centre, the Singapore International Mediation Centre, the Singapore International Mediation Institute, and the Singapore International Dispute Resolution Academy.